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NHRA being Investigated by the IRS
- Thread starter SundayNiagara
- Start date
Paul
Nitro Member
I don't understand you guys. The NHRA wasn't built by a bunch of guys in suits, it was totally built by gallons of the blood and sweat of many years of dedicated racers.
Every single ticket that has been sold and any value the was built up in the NHRA was totally derived from this pure expenditure of racers blood and sweat.
So given how the NHRA was built up, you guys are perfectly fine about some guys in suits scamming their way into control of it by snow jobbing the real members (the racers) and then running it like they own it (they don't). Add in the fact that they are doing a pretty poor job and paying themselves inflated salaries in the process.
So your response to a situation like this is "move on and shut your mouth".
Wow.
Von Halen
Nitro Member
I totally agree with you Paul. I am dumbfounded at some of the responses. These guys have turned the NHRA into a dictatorship. How in the hell do you grow a sport, when you are locking out potential sponsors? Not to mention the $600-$6,000 an hour pay they are giving themselves, PLUS whatever fringe benefits those guys are indulging in.
What have they done for me?
Frankly, the "Night Of Fire" show at Norwalk is better than any NHRA National event anyway.
Yeah your right, lets all sit back and watch the NHRA get the Wrecking ball. See where this sports ends up...
Yeah your right, lets all sit back and watch the NHRA get the Wrecking ball. See where this sports ends up...
Not meant to be a smart a$$ but what do you think you can do or intend to do about it?
mick
Nitro Member
paul and others.....do you think the IRS cares about the nhra? how it's run?
how successful it is?........no, with this inquiry they will look for uncollected
taxes; and if they find fault with nhra's exempt status, they will make necessary
changes which will undoubtedly increase nhra's operating costs moving forward.
they will not tell the nhra to be more sportsman friendly, more fan friendly,
more aware of the sport's founding fathers.......they don't care how the hell
the sanctioning body is run (run into the ground as far as they are concerned)
their only concern is that the proper tax status is adhered to.
when was the last time you got the gov't. involved in anything with
positive results?
in the best interests of racers, fans and officials,
disagreements on how the sanctioning body is run should be settled between
nhra officials and parties in disagreement; a letter to the IRS, IMO is
beyond comprehension.
how successful it is?........no, with this inquiry they will look for uncollected
taxes; and if they find fault with nhra's exempt status, they will make necessary
changes which will undoubtedly increase nhra's operating costs moving forward.
they will not tell the nhra to be more sportsman friendly, more fan friendly,
more aware of the sport's founding fathers.......they don't care how the hell
the sanctioning body is run (run into the ground as far as they are concerned)
their only concern is that the proper tax status is adhered to.
when was the last time you got the gov't. involved in anything with
positive results?
in the best interests of racers, fans and officials,
disagreements on how the sanctioning body is run should be settled between
nhra officials and parties in disagreement; a letter to the IRS, IMO is
beyond comprehension.
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yoda
Nitro Member
Not a Damn thing, but that wasn't Pauls question either!
Paul
Nitro Member
Keep in mind that the primary economic advantage of a non-profit is that there are no corporate taxes on profits. But with the help of the fat salaries the board members have been paying themselves the NHRA has shown little profit over the years, so there wouldn't be much economic impact from a loss of non-profit status. I'm not an accountant, but I don't think there would be any other increase in ongoing operating costs but we sure would come out ahead if the fat salary cats were forced to live on a salary closer to what a typical racer gets by on. Its just totally wrong that there is not a single board member that paid the price in blood and sweat to build the NHRA.
And how do you expect these things to happen otherwise? The current board pulled a fast one on the members so that only these board members themselves can hire or fire themselves. If something doesn't happen they will just fly the plane right into the ground, that's the path they have clearly charted over the years.
I share your concern about the government getting involved in anything.
But the current board members have made it clear that they are running this show the way they see fit, and they don't feel they have to take any serious input from the racers on key decisions, such as replacing the board members themselves. They wangled the rules to take this control away from the members, so now out of the goodness of their hearts you expect them to "settle disagreements" with the members that they willfully made powerless?
Challenging the NHRA through a law suit to try to restore real member input into the future of the NHRA would have been very expensive. I can't blame this member for figuring out a more cost effective manner to challenge the NHRA, it was certainly his right to do so as it appears that in the process of implementing their snow job on the members, the NHRA board played fast and loose with the rules that bind non-profits.
So personally, although I'll admit I don't like unnecessary government involvement in businesses, in this case I think the whistle blowing was warranted as it appears to be the only mechanism to get some real membership input and control back into the NHRA.
Keep in mind that the type of non-profit rules that the NHRA is supposed to be abiding by include statements that the organization is to be "generally controlled by its members".
Perhaps this is an optimistic view, but I'm hopeful that if the IRS does require any changes it would include the restoration of those members voting rights, as were originally granted in the original NHRA incorporation documents.
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vegasnitro
Nitro Member
I would like for you to provide more information about this. Until very recently, I have heard/read no complaints about NHRA's tax exempt status.
Paul
Nitro Member
Chris, I've posted extensively on this topic on this forum. I'll save the readers from having to see the full detail from those posts again in this thread, if you search for posts by my name you'll hit them.
But here's a very brief summary. The NHRA is a 501(c)6 "business league" non-profit. Business leagues are to be "generally controlled" by their members. The NHRA got out of compliance with that when they held the shady 80's vote that removed members voting rights. Once they had full control through this vote, at a later date they took a further step to neuter the members by modifying their bylaws to even further restrict members rights.
Business leagues are also only allowed to have members that are running legitimate business operations but most NHRA members don't satisify this requirement. The NHRA apparently selected this type of non-profit to give them the most flexibility with revenue generating activities, but they clearly didn't qualify for this type of non-profit.
The NHRA is paying salaries that appear to be out of line for a non-profit organization.
It appears that there is too much money flowing directly through the NHRA's hands, even for a business league type non-profit. Business leagues are supposed to develop economic opportunites and revenue generation for their members, not just economic opportunities and revenue generation for themselves.
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vegasnitro
Nitro Member
Cool ... will do.
Treeshaker
Nitro Member
I have no opinion on whether it is right or wrong for someone to spend their money to have this law firm sic the IRS onto NHRA. But there are statements being thrown around that need a little research done by the "thrower" before posting them.
Are we dismissing Grahm Light's many years as a racer? Or others that work for and around NHRA over the years that had storied racing careers?
Tom Compton was brought in to reverse the fortunes of NHRA by making it profitable, and he has accomplished that job. Not always in a way that makes everyone happy, but NHRA seems to be profitable every year now.
DRO likes to publish NHRA's tax statements, maybe they need to go back some years to when others were running the show. And in reality, while Wally was around he was running the show no matter whose name was under the title.
Who was running NHRA when the controversial vote was taken? He is the one who should be thrown under the bus if it is contrary to your wishes. And where was everyone that has been around forever when the vote was taken? And was that the time when the board and the officers became the same?
NHRA hasn't changed it's stripes, it is the same tiger that it has always been, just different people running the show.
Are we dismissing Grahm Light's many years as a racer? Or others that work for and around NHRA over the years that had storied racing careers?
Tom Compton was brought in to reverse the fortunes of NHRA by making it profitable, and he has accomplished that job. Not always in a way that makes everyone happy, but NHRA seems to be profitable every year now.
DRO likes to publish NHRA's tax statements, maybe they need to go back some years to when others were running the show. And in reality, while Wally was around he was running the show no matter whose name was under the title.
Who was running NHRA when the controversial vote was taken? He is the one who should be thrown under the bus if it is contrary to your wishes. And where was everyone that has been around forever when the vote was taken? And was that the time when the board and the officers became the same?
NHRA hasn't changed it's stripes, it is the same tiger that it has always been, just different people running the show.
vegasnitro
Nitro Member
These are ostensibly the points I have been trying to make, but as always Virgil, you make the point much more cogently than I ever could.
The IRS are no dummies, they have many years of returns on file for the NHRA, and that will be the first thing they do is go back over all of the NHRA's itemized returns to see if they can discern a pattern not befitting their tax status. Chances are, if that pattern exists, they would have already jumped on the NHRA. The tax process is largely automated via computer now, and they have many algorithms running over every return to find the cracks and loopholes.
My other point was the NHRA has been the NHRA for sixty years. What makes now the time to suddenly stand up and pick a fight? Like Virgil said, that tiger has not changed it stripes.
Lastly, what good could possibly come of it? The NHRA goes fully for profit and then there is no cap or limits on what Compton and others could be paid. Costs for racers and fans would surely go up. Or, the NHRA maintains it's tax status but is restructured and the members get their voting rights back. Then you vote out Compton/Light/Gardner? Vote them pay decreases to whatever YOU decide is acceptable? Whether you like Compton or not, the NHRA is in better shape now than when he took over. And name me ANY other racing series that is run by the racers/members that is succesful. You can't, because it has NEVER worked. It ultimately devolves into every member looking out for their own interests and nothing gets accomplished if the series continues at all. I guess that is the long way around the bend for me to ask, what is the end game here (besides governement involvement, huge legal fees, hard feelings and unintended consequences)?
Lastly, a friend of mine has several economics degrees and works for American Express Securities. He says standard CEO compensation is 1% of Gross Revenues plus expected benefits (stock options, company car, use of the company jet, etc). Using that model, Compton is WAY UNDERPAID. Shrug ...
The last two posts one by Virgil and the other by Chris make more sense than any seen previously. You may or may not like the current managment and their managment style but its hard to argue with sucess. Sure there are a few things they could do to support the sportsman racers better but theirs is not an easy job.
Us old guys would like it to be the way it was in the 60s and 70s but that can't happen in todays world. We all need to sit down, hush up and let this run its course and not inflame the situation.
There's a right way to do things and a wrong way . Each must make their own mind up if this is right or wrong.
Us old guys would like it to be the way it was in the 60s and 70s but that can't happen in todays world. We all need to sit down, hush up and let this run its course and not inflame the situation.
There's a right way to do things and a wrong way . Each must make their own mind up if this is right or wrong.
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Mike ... this is the post of the year. The IRS is an enforcement agency that collects money in accordance with US Tax law and nothing more. They have no desire to provide training for business best practices. They are not the Better Busines Bureau ... THEY DON'T CARE !!
The author of the letter obviously has an axe to grind and isn't really concerned about the ultimate outcome. They want to be able to say "I told you so". If this actually does go somewhere as far as a status change ... it will likely cost everybody more $$. Racer, Fans, Sponsors, etc.
There are people posting on this site who have the appearance of expertise on subjects that, in fact, they know little about. Please bear this in mind when you’re reading some of this stuff.
Per the attorney we consulted at the time, overcoming the NHRA proxy vote that’s enabled the current Board to appoint and dismiss members as they so choose, would require the proxy ballots of a full 75% of the active membership of the organization. I believe the prospects for success in such an effort are non-existent.
Please also remember that the vast majority of those involved with NHRA as members and/or competitors have very little interest in anything more important than a good pit spot and the left lane in the first round.
I refer again to my opening paragraph. Just because someone appears to speak with authority doesn’t mean they have any. I work regularly with a professional researcher (and by definition this is an individual who spends his working life digging into things like corporate financing, personal histories and related topics). I also work regularly with two attorneys, one of whom is very well versed on topics such as this one. I haven’t asked them to get involved here and don’t intend to because they’ve got better things to do with their time.
Regardless, all three of these individuals regularly blow huge holes through some of the comments posted here, comments that many of you seem to feel have relevance and veracity.
They don’t.
Think of it this way. You’re ill and go to a doctor, not your regular person. He tells you you have Lampington’s Disease (a prize for the first person who provides the correct reference for that one!), and you have two to three weeks to live.
Because that guy spouted off in medical terminology, are you going to believe him without first checking with your regular physician? Not likely.
So, just because someone writes something here that appears “right,” that doesn’t make it so.
Excuse me, but don’t you think it’s time to stop acting as if the attorney who filed the letter with the IRS is a legal genius? Working for a Washington-based firm doesn’t make this guy any smarter than a first year law student from Harvard. And it doesn’t take much research to find that this guy has filed actions in the past on the other side of these issues. This guy is a hired gun, and nothing more. Stop acting like he’s Clarence Darrow.
Jon Asher
Senior Editor
CompetitionPlus.com
Per the attorney we consulted at the time, overcoming the NHRA proxy vote that’s enabled the current Board to appoint and dismiss members as they so choose, would require the proxy ballots of a full 75% of the active membership of the organization. I believe the prospects for success in such an effort are non-existent.
Please also remember that the vast majority of those involved with NHRA as members and/or competitors have very little interest in anything more important than a good pit spot and the left lane in the first round.
I refer again to my opening paragraph. Just because someone appears to speak with authority doesn’t mean they have any. I work regularly with a professional researcher (and by definition this is an individual who spends his working life digging into things like corporate financing, personal histories and related topics). I also work regularly with two attorneys, one of whom is very well versed on topics such as this one. I haven’t asked them to get involved here and don’t intend to because they’ve got better things to do with their time.
Regardless, all three of these individuals regularly blow huge holes through some of the comments posted here, comments that many of you seem to feel have relevance and veracity.
They don’t.
Think of it this way. You’re ill and go to a doctor, not your regular person. He tells you you have Lampington’s Disease (a prize for the first person who provides the correct reference for that one!), and you have two to three weeks to live.
Because that guy spouted off in medical terminology, are you going to believe him without first checking with your regular physician? Not likely.
So, just because someone writes something here that appears “right,” that doesn’t make it so.
Excuse me, but don’t you think it’s time to stop acting as if the attorney who filed the letter with the IRS is a legal genius? Working for a Washington-based firm doesn’t make this guy any smarter than a first year law student from Harvard. And it doesn’t take much research to find that this guy has filed actions in the past on the other side of these issues. This guy is a hired gun, and nothing more. Stop acting like he’s Clarence Darrow.
Jon Asher
Senior Editor
CompetitionPlus.com
Tim5636sc
Nitro Member
From the movie LAST HOLIDAY Jon....
"An unremarkable man is told he has Lampington's Disease and has only a few weeks to live, so he decides to spend his life savings on his remaining time left living a comfortable life in a seaside hotel."
Story was remade into Joe Vs. the Volcano but this time was told he had a "BRAIN CLOUD"....
what do I win?
"An unremarkable man is told he has Lampington's Disease and has only a few weeks to live, so he decides to spend his life savings on his remaining time left living a comfortable life in a seaside hotel."
Story was remade into Joe Vs. the Volcano but this time was told he had a "BRAIN CLOUD"....
what do I win?
