Paul I would venture to say by all accounts that I've heard on tthis forum it probably did not happen for whatever reason. If that is the case members have been hoodwinked for well over 60 yrs, I would think that voting rights by the members would be a tenet that was good in 1951 and just as good in 2011. But you are right the expertise of a good coporate attorney would be needed to make a determination if that was truly the case. It would be interesting to know though.
Nitromater
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NHRA being Investigated by the IRS
- Thread starter SundayNiagara
- Start date
Paul I would venture to say by all accounts that I've heard on tthis forum it probably did not happen for whatever reason. If that is the case members have been hoodwinked for well over 60 yrs, I would think that voting rights by the members would be a tenet that was good in 1951 and just as good in 2011. But you are right the expertise of a good coporate attorney would be needed to make a determination if that was truly the case. It would be interesting to know though.
Paul
Nitro Member
I don't see how that could possibly be done, given the fact that the NHRA is currently a free standing corporation with no private ownership. It currently owns all its assets and their are clear restrictions on how those assets can be transferred or disposed.
Forcing it to become a for-profit would require assigning ownership of the company to someone and it certainly wouldn't be to the current board of directors. The only thing that would make any sense would be transferring ownership to the members, but even that goes against the restrictions placed on non-profit companies.
I think the only possible outcome is that they would force the NHRA to adhere to the non-profit guidelines for whichever non-profit structure they decide makes the most sense for it. As I've posted before, in the past they have forced the NHRA to change its non-profit designation and one possible outcome of this is that they force an additional change, but I don't think that would be to a for-profit company.
Paul
Nitro Member
The link below has the most detail I've seen regarding the attorney that filed the letter, including his background and some comments: (I don't think anyone posted this yet, sorry if its a repeat)
Nhra Could Face Irs Scrutiny -- Main FanHouse
An interesting quote from the article:
"At this point, the end result would be the client simply wants an independent third party to make sure it deserves to be tax exempt," Owens said. "I don't know for fact since I haven't spoken to him about this issue, but I would assume the client would be satisfied with the organization returning to a membership model and stopped acting like a commercial enterprise."
This is from the filing attorney, Marcus Owens, who is described as "the former head of the IRS exempt organizations division".
I would expect that as the former head of the exempt organizations division, Mr. Owens would have a pretty clear understanding of what constitutes possible non-compliance by an organization, and its also likely that any filed letter he generates would be taken pretty seriously by the IRS. I don't think this is something the NHRA will be able to shake off easily.
Its also interesting that Mr. Owens mentions as a possible outcome "the client would be satisfied with the organization returning to a membership model and stopped acting like a commercial enterprise".
This guy is clearly experienced with the ramifications of a non-profit company being forced back into compliance, and I don't think he would have publically stated the outcome above if there wasn't some chance of it occuring.
It looks like that as a result of the IRS investigation that a possible return of membership control of the NHRA may not be out of the question.
Nhra Could Face Irs Scrutiny -- Main FanHouse
An interesting quote from the article:
"At this point, the end result would be the client simply wants an independent third party to make sure it deserves to be tax exempt," Owens said. "I don't know for fact since I haven't spoken to him about this issue, but I would assume the client would be satisfied with the organization returning to a membership model and stopped acting like a commercial enterprise."
This is from the filing attorney, Marcus Owens, who is described as "the former head of the IRS exempt organizations division".
I would expect that as the former head of the exempt organizations division, Mr. Owens would have a pretty clear understanding of what constitutes possible non-compliance by an organization, and its also likely that any filed letter he generates would be taken pretty seriously by the IRS. I don't think this is something the NHRA will be able to shake off easily.
Its also interesting that Mr. Owens mentions as a possible outcome "the client would be satisfied with the organization returning to a membership model and stopped acting like a commercial enterprise".
This guy is clearly experienced with the ramifications of a non-profit company being forced back into compliance, and I don't think he would have publically stated the outcome above if there wasn't some chance of it occuring.
It looks like that as a result of the IRS investigation that a possible return of membership control of the NHRA may not be out of the question.
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I like to ask a question of the people on this forum. Here its is, Has anybody in their memory as member of the NHRA voted for any Board member of the NHRA. Thee reason ask is that I went to NHRA site an look thru some archives of ND which highlight the most significant events which occur from 1950 to 2000 and not one mention of one election all I could come accross was that most positions were appointed.
Paul
Nitro Member
I may be wrong about this, but I don't think the tax ramifications would be that large to them, ie potentially a headache, but not enough to put them out of business.
Non-profits get the break of not having to pay state and federal corporate taxes on any net profits, after all expenses and salaries have been deducted.
But thanks in part to the fat salaries they have, I don't think they have been showing much net profit, so I don't think there would be that big of a tax bill due.
As I've mentioned previously, this is a standard dodge in both for-profit and non-profit companies, ie paying inflated salaries to avoid any corporate taxes in the for-profit case and as a way to get around the rules on not distributing profits to board members in the non-profit case.
Paul,
You might be right you're talking about the last three years, but my understanding is that they could go back as far as they want to
Paul
Nitro Member
I guess the nastiest decision the IRS could make would be that the NHRA had improperly paid out profits in the guise of inflated salaries.
They could then force the board members to repay the excess salary amounts plus penalties (Bentley repo time).
That overpayment money would then come back to the NHRA who would probably have to pay the corporate taxes on it but might then actually have some left over.
They could then force the board members to repay the excess salary amounts plus penalties (Bentley repo time).
That overpayment money would then come back to the NHRA who would probably have to pay the corporate taxes on it but might then actually have some left over.
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clwill
Nitro Member
Here's an interesting document I found. It's from IRS.GOV and shows that the last time the NHRA had their status reviewed was in August 1987. Hmmm.
Here's the web page: SOI Tax Stats - Exempt Organizations: IRS Master File Data
And the California, letters M-P spread sheet: http://www.irs.gov/pub/irs-soi/eo_camp.xls
Interesting stuff...
Here's the web page: SOI Tax Stats - Exempt Organizations: IRS Master File Data
And the California, letters M-P spread sheet: http://www.irs.gov/pub/irs-soi/eo_camp.xls
Interesting stuff...
mw6789
Nitro Member
My understanding is if they can prove evasion or a pattern of such, there is no statute of limitations. This info is compliments of my CPA.
Sean D, shondoo
Nitro Member
I wish I could say that would be a bad thing, but I just can't..........
Sean D
clwill
Nitro Member
As I said, it appears to indicate that the last time the IRS reviewed NHRA's 501(c)(6) status was in 1987, ~25 years ago. This would indicate to me that perhaps this complaint/request might be followed up on, as a review might be a tad overdue. However, I'm not an attorney, a CPA, or an IRS expert, so my humble opinion means precisely nothing...
The last I checked having an opinion in this country was something that is free to give. I checked the states on this 14,027 people view this thread, 233 comments were offer. .016 percentage reads like a rt. Whether you for change, against change in the NHRA. The membership has to be vibrant and relevant. An active membership base willing to interact with the issues of the day.
Bill
Nitro Member
Bruce, by your own admission, opinions are what this forum is all about. Here's mine:
You have contributed a lot of your opinions to this thread, and most, I think were well thought out and pertinent. I appreciate your insightful thoughts.
BUT, your posts are almost always are hard to read, and, hard to figure out relative to what they really mean. It's all because you apparently NEVER edit the many mistakes you make when you write them. It's a shame, because you make a lot of very good points. We shouldn't have to read your mind when reading them.
For example: In just this last message, you wrote, " I checked the STATES" when you meant "I checked the STATUS," a simple typo, but one you could have corrected.
You also wrote, "233 comments were offer." when you meant "233 coments were OFFERED." Another typo, but more evidence that you don't read what you write.
You also wrote, "Whether you for change, against change in the NHRA." when you really meant "Whether you ARE for change, OR against change in the NHRA."
Sentences need a verb to be easily understood. You can DO this...
Finally, you wrote, "An active membership base willing to interact with the issues of the day." which again, is not a sentence. Makes no sense, but I'm sure YOU knew what you meant. That doesn't mean anyone else does.
So, before you hit the "send" button, PLEASE go back and re--read what you just wrote. I am the KING of typos, and find a multitude of mistakes in my own notes I am about to post. If I didn't check my contributions thoroughly, nobody could decipher my notes, either.
You are a prolific poster; we WANT to be able to understand your efforts, here.
I know you didn't learn English as a third language. Do us all a favor and use your "edit" button to correct these mistakes, before they're posted, okay?
Your readers will appreciate it!!!
It will be time well-spent.Bill
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Bruce, by your own admission, opinions are what this forum is all about. Here's mine:
You have contributed a lot of your opinions to this thread, and most, I think were well thought out and pertinent. I appreciate your insightful thoughts.
BUT, your posts are almost always are hard to read, and, hard to figure out relative to what they really mean. It's all because you apparently NEVER edit the many mistakes you make when you write them. It's a shame, because you make a lot of very good points. We shouldn't have to read your mind when reading them.
For example: In just this last message, you wrote, " I checked the STATES" when you meant "I checked the STATUS" a simple typo, but one you could have corrected.
You also wrote, "233 comments were offer." when you meant "233 coments were OFFERED." Another typo, but more evidence that you don't read what you write.
You also wrote, "Whether you for change, against change in the NHRA." when you really meant "Whether you ARE for change, OR against change in the NHRA."
Sentences need a verb to be easily understood. You can DO this...
Finally, you wrote, "An active membership base willing to interact with the issues of the day." which again, is not a sentence. Makes no sense, but I'm sure YOU knew what you meant. That doesn't mean anyone else does.
So, before you hit the "send" button, PLEASE go back and re--read what you just wrote. I am the KING of typos, and find a multitude of mistakes in my own notes I am about to post. If I didn't check my contributions thoroughly, nobobdy could decipher my notes, either.
You are a prolific poster; we WANT to be able to understand your efforts, here.
I know you didn't learn English as a third language. Do us all a favor and use your "edit" button to correct these mistakes, before they're posted, okay?
Your readers will appreciate it!!!
Bill
Bill Thank You very much and I will spent the to edit. Sometimes the things are right there at the fore front of my mind and I try to put it all down before it goes away. But no excuses I should and will edit so that my thoughts can be clear and precise, Thanks Very Much!!!
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Rajunz
Nitro Member
You did it again................
You did it again................
You guys will make me better!
Rollout96
Nitro Member
You did it again................
He did... however that one was awesome and made me laugh out loud.
