[Congressional Record Volume 143, Number 1 (Tuesday, January 7, 1997)]
[Extensions of Remarks]
[Page E45]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          INTRODUCTION OF THE TAX EXEMPTION ACCOUNTABILITY ACT

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                          HON. ROBERT MENENDEZ

                             of new jersey

                    in the house of representatives

                        Tuesday, January 7, 1997

  Mr. MENENDEZ. Mr. Speaker, today, I am introducing the Tax Exemption 
Accountability Act to stop self-dealing by the managers of tax exempt 
organizations and put teeth into the requirement that they file 
accurate annual returns with the IRS and make them available to the 
public. It creates a national clearinghouse offering copies of returns 
for a reasonable fee. The bill also caps the compensation of officers 
and directors at the level of U.S. cabinet members. Churches would 
continue to be exempt from filing IRS returns and from caps on pastors' 
salaries and hospitals could still pay high-cost professionals.
  Given the current events, we need greater accountability by tax 
exempt organizations because they control substantial public wealth and 
offer temptation that some have been unable to resist manipulating. The 
share of national revenues going to tax exempts has nearly doubled in 
the past 15 years, growing to 8 percent per year in constant dollars. 
The IRS reports that revenues of tax exempts rose from 5.9 percent to 
10.4 percent of the U.S. gross domestic product from 1975 to 1990. 
Those revenues totaled $578 billion in 1990. This contrasts with 
taxable revenues from service industries which had receipts of $1,174 
billion. Tax exempts equal more than half of the revenue of all service 
sector industries and pay no tax. Clearly the opportunity for abuse is 
enormous.
  The American people are the most generous people in the world. My 
bill will ensure that this generosity is not abused and profitable 
business activity is not diverting taxable revenue through manipulating 
charitable exemptions.

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