Three members of Congress have shot a cannon at the American Association of Retired Persons (AARP). Republicans Herger (CA), Boustany (LA) and Reichert (WA) sent a letter to the head of the IRS asking that the tax status of AARP be reviewed.
AARP is a 501(c)(4). That means they pay no taxes at all. Sort of like a church. At first look this might make sense. After all, the AARP is a non-profit that is just trying to help out the oldsters. Right?
Wrong! AARP took in $600,000,000 during 2010 from endorsement deals. Not a penny of taxes was paid.
Anyway, the AARP fired back with a (mealy mouthed) letter the next day:
AARP Response to Recent Letter from Reps. Herger, Boustany and Reichert
We are disappointed that the letter seeks to decry the exact kind of pro-consumer, market-changing efforts that AARP has led since our founding in 1958.
You can bet the folks over at the AARP are “disappointed” that some congressmen have sic’ed the IRS on them It’s worth $150mm a year to them.
I wouldn’t worry about the AARP just yet. They have an army of political friends and some big shot lawyers. It’s a safe bet that the IRS sits on this until 2013 when a (potentially) new IRS Commissioner has the corner office. In the meantime, one can expect that the AARP will direct their campaign
Note:
This business with tax breaks for the AARP (and other big 501(c)(4)s) is another good example of how screwed up our tax laws are. The current system just creates carve-outs and preferences for powerful groups. Why? The answer is that those same powerful groups have control over the outcome.
.
Posts
So true. That's why I refuse to join AARP.
ReplyDeleteNot all 501(c)(4)s are bad.
ReplyDeleteBlue Cross and Blue Shield used to be a 501(c)(4), but they lost their tax exemption in 1986 with the passage of 501(m).
Now, to fully earn tax-exempt status, an insurer must distinguish itself from its competitors, through unique products and operations.
The possibilities are huge for unique insurers to start forming, and providing real competition for the commercial insurers.
Don Levit
Bruce- If you decide to write the book, my interviews with 993 Baby Boomers and 304 Hiring Managers about Boomer employment issues may provide some "tidbits". Thanks for everything you do to keep things clear.
ReplyDeleteThe wealth of the country is concentrated in Washington DC -- at least according to the last census. The five wealthiest counties (per capita income) are the ones surrounding Washington DC.
ReplyDeleteBig piles of unwatched money attract crooks -- both the lobbyists (bribe payers) and the bureaucrats (bribe receivers).
Big government will always act as a magnet for big scams -- AARP is just one example
If your are going to condemn the AARP for off-the-reservation activities that call its non-profit status into question I hope you are prepared to focus the same spotlight on a whole lot of churches and religions. There are epic levels of abuse that are swept under the carpet when it comes to non-profit status for "favored" groups.
ReplyDeleteI never joined AARP!
ReplyDeleteThe "coming war" will have Geeks at the forefront. Displacing the Greek/Roman warrior image.
Battles will be done from afar.
Sometimes, I worry that the arabs, using their oil wealth, own pretty much ALL the technology.
But if you can't fix it when it breaks? You really don't "own it."
It's like the modern cars. Unlike the old mechanical models (which are still running in Cuba). A teenager can no longer go into the family's garage and "fiddle."
Of course, Bill Gates went into his dad's garage ... and built a business.
Currently, we are at "scratch." The real dangers aren't wars ... but the creeps who are your neighbors. Who break into your house "opportunistically."
The big rules that will change?
People won't call the police. The legal system we have in the USA is now useless. The mortgages are fraudulent. And, the brokers can steal or your money. (Just like Jon Corzine did.) Corzine will never face criminal charges!
Perhaps, all the other brokers, and Wall Street, are working overtime to keep this a secret?
The biggest threat to the West? Lower "fertility." Men no longer impregnate women often enough.
Of course, this is "over the long term."
And, of course, there's the Dark Ages. IF the Islamists can get their hands on anything. Like they did to Cairo's museum built by Napoleon. They will destroy everything in their paths. My guess? Politicians get beheaded, with their heads displayed on pikes.
The Old World "order?" Nope. The Elites lose.
love to see bushcheeny heads on pikes, as they are the creators
ReplyDeleteof our current "world", and must suffer the consequence.
feel the vibe of the suv owner, car filled with crotchfruit thumbing
their iphones, and he can't make next month's car or house pay-
ment, has no job, iq of 90, etc.
the vibe isn't that of one who will be cool to live next door to.
Looks like another good reason to abolish the IRS. Not that I love the AARP, but it is another tool to shutdown free speech.
ReplyDeleteCarol_Herman:
ReplyDeleteBill Gates was awarded a monopoly from the FTC when it ordered IBM to outsource future Operating Systems. Bill bought the code from a guy in a garage.
Bruce,
ReplyDeleteLike you, I considered writing a book on the same theme but reconsidered as my age (41) and profession (tax lawyer) meant that my doing so likely meant the end of my practice.
I used to be a member of the CBOT. I still trade. I amazed that Jon Corzine's tremendous damage to the futures industry has not been addressed, either through an indictment or at the very least a publicly announced investigation.
If no meaningful reform is forthcoming (and I doubt there will be with Barack Obama '83 and Romney '69) how will there be a serious investigation of people like Corzine '69?
How will there be some serious talk about preserving entitlements for the Boomers who have paid into the system over the years while retaining the system for those who are now doing the paying?
I hope things work themselves out. But in the American system nothing changes until the country's back is against the wall.
The biggest scam of all is that churches pay no taxes.
ReplyDeleteCharity was the reason why churches were exempt from taxes. AARP is not about charity, it is about taking from the young people their money to support the elderly, so they have one of the largest lobbies in Congress. They are however not immune from karmic law even if they circumvent man’s laws. So those who work for AARP, those who endorse it, all have accountability before God. And with 2012 being a year of karma reckoning, the buck stops here—2012. So even AARP can be put on your forecast list of those who must give accounting before God.
ReplyDelete