March 23, 2006 | Read Time: 2 minutes
TAX WATCH
The pending departure of a powerful House lawmaker with oversight over nonprofit organizations could be good news for charities that opposed his efforts to raise questions about whether all charities deserve their tax-exempt status.
Rep. Bill Thomas, chairman of the House Ways and Means Committee, says he will not seek reelection to Congress this fall. During his tenure, the California Republican resisted tax incentives aimed at stimulating charitable giving, and began a wide-ranging inquiry into whether to rewrite the laws by which nonprofit groups are created, including redefining how groups qualify for tax-exempt status.
The committee has held six hearings on nonprofit organizations over the past several years, looking into the tax-exempt status of credit unions and charity hospitals, among other topics.
In addition, the committee is raising questions about the tax-exempt status of college athletic activities.
Over the past three months, staff members of the Ways and Means Committee have questioned several college officials about potential tax abuses in college sports, according to The Chronicle of Higher Education.
Among the committee’s questions, the officials said: whether some of the money generated by college sports programs and the National Collegiate Athletic Association should be subject to unrelated-business income tax. Nonprofit groups must pay the tax on commercial operations not related to their tax-exempt purposes.
Who will succeed Mr. Thomas as chairman of the Ways and Means Committee is uncertain, but charities may find that lawmaker to be more open to their concerns than was Mr. Thomas, says Bruce R. Hopkins, a lawyer in Kansas City, Mo., who has testified at Congressional hearings on several issues related to charities.
Congressional interest in continuing Mr. Thomas’s investigations of nonprofit groups is limited, Mr. Hopkins says. The new leader also may be more supportive of charitable tax incentives, he says.
