Professor Colombo Testifies Before Ways and Means Committee

Wednesday, July 25, 2012

Professor John Colombo, the Albert E. Jenner, Jr. Professor, testified on July 25 before the House Committee on Ways and Means.

The hearing focused on organizational and compliance issues related to public charities, including the increased complexity of public charity organizational structures, the rules governing profit-generating activities giving rise to unrelated business income tax, and whether the newly redesigned Form 990 is promoting increased compliance and transparency.

In summary, Colombo said:

“Unfortunately, the current provisions of the [Internal Revenue Code] regarding commercial activity by charities and the IRS’s and courts’ interpretations of those provisions have created needless confusion and uncertainty, particularly regarding the effects of commercial activity on exempt status. … [It] is certainly time for Congress to undertake a comprehensive review of these rules and enact provisions that embody a clear rationale with clear lines demarking appropriate and inappropriate activities. “

Read Colombo’s testimony

An expert in the area of tax-exempt organizations, Colombo has written numerous articles on tax exemption theory, on the exemption standards for nonprofit hospitals, and on commercial activity by nonprofit organizations.

This is his third testimony before the Ways and Means committee, previously providing overviews of the legal rules for tax exemption under Section 501 of the Internal Revenue Code and the rules for exemption of nonprofit hospitals.

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