OTHER NEWS - June 20, 1995

IRS Investigates Nonprofit Groups: The service is particularly interested in the 15% of the estimated 1.1 million U.S. tax-exempt nonprofit organizations that account for half the sector’s revenue. Many hospitals and universities fall in that category, as do two high-profile organizations targeted by the program: the National Rifle Assn. and the American Assn. of Retired Persons. At issue in many cases is the distinction between tax-free royalties and business income unrelated to a nonprofit’s mission. Overall, the funds nonprofits raise amount to nearly $700 billion a year, or about 10% of the gross domestic product, according to the Internal Revenue Service. The tax agency has been sending agents to conduct line-by-line examinations of tax-exempt groups’ ledgers.