Congress Eyes Tax Exemption

(From CU Journal)

WASHINGTON (03/03/04) -- A powerful lawmaker said Tuesday he plans to probe the federal tax exemptions enjoyed by so-called 501 ( c) organizations, including credit unions, to determine whether the groups continue to deserve their special tax treatment. Rep. Bill Thomas, R-Calif., chairman of the tax-writing House Ways and Means Committee, said many of tax-exempt organizations have strayed from their original purposes and cited credit unions and not-for-profit hospitals as businesses that have come to compete with and look like their for-profit peers. In a speech to the Federation of American Hospitals, Thomas said Congress should examine 501 ( c) s to determine whether they provide greater value to the public than taxable competitors. Thomas said his investigation, which may include hearings, will look into the criteria for obtaining tax-exempt status and whether the law should be more specific about the responsibilities of those organizations.