Tax-Exempt Organizations: Information on Selected Types of Organizations
(Briefing Report, 02/28/95, GAO/GGD-95-84BR).

Since the mid-1970s, the number and the size of organizations that are
tax exempt have increased substantially; more than one million of these
organizations existed as of 1992.  Press reports and congressional
hearings have recently focused on the activities of charitable groups,
but other kinds of tax-exempt organizations have not received this level
of scrutiny.  This briefing report (1) discusses the growth in the
number, the assets, the revenues, and the expenses of social welfare
organizations, labor and agricultural groups, and business leagues; (2)
documents the compensation that some of the largest of these tax-exempt
organizations paid their executives in 1992; (3) identifies the extent
to which these organizations are involved in lobbying and political
activities; and (4) identifies Internal Revenue Service efforts to
monitor their activities.  Information on charitable organizations is
presented for comparison purposes.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-95-84BR
     TITLE:  Tax-Exempt Organizations: Information on Selected Types of 
             Organizations
      DATE:  02/28/95
   SUBJECT:  Tax exempt organizations
             Tax administration
             Non-profit organizations
             Lobbying activities
             Executive compensation
             Labor unions
             Income statistics
             Statistical data
             Tax exempt status
             Tax return audits
IDENTIFIER:  IRS Exempt Organizations/Business Master File
             
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Cover
================================================================ COVER


Briefing Report to Congressional Requesters

February 1995

TAX-EXEMPT ORGANIZATIONS -
INFORMATION ON SELECTED TYPES OF
ORGANIZATIONS

GAO/GGD-95-84BR

Selected Tax-Exempt Organizations

(268639)


Abbreviations
=============================================================== ABBREV

  COO - Chief Operating Officer
  EIN - Employer Identification Number
  EOBMF - Exempt Organization Business Master File
  GDP - gross domestic product
  IRC - Internal Revenue Code
  UAW - International Union - United Auto, Aerospace, and
     Agricultural Workers

Letter
=============================================================== LETTER


B-260138

February 28, 1995

The Honorable Byron L.  Dorgan
United States Senate

The Honorable Harry Reid
United States Senate

Since the mid-1970s, the number and size of organizations that are
tax-exempt under Internal Revenue Code (IRC) section 501(c) have
increased substantially overall.  As of 1992, there were over 1
million of these organizations in existence.\1

Press reports and congressional hearings have recently focused on the
activities of charitable organizations, but other types of tax-exempt
organizations have not received this level of scrutiny.  As you
requested, we (1) determined the growth in the number, assets,
revenue, and expenses of social welfare organizations, labor and
agricultural organizations, and business leagues, (2) documented the
compensation that some of the largest of these tax-exempt
organizations paid their executives in 1992, (3) identified the
extent to which these organizations can be involved in lobbying and
political activities, and (4) identified IRS' efforts to monitor
their activities.  Information concerning charitable organizations is
presented in this report for purposes of comparison. 

On February 15, 1995, we briefed you and your staffs on the results
of our review.  This report summarizes the information presented in
that briefing. 


--------------------
\1 Appendix IV describes the types of organizations that are
tax-exempt under IRC section 501(c). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

For the most part, the number and size of tax-exempt social welfare
organizations, labor and agricultural organizations, and business
leagues increased between 1975 and 1990.  The changes over this
period are illustrated as follows: 

  -- The number of business leagues increased about 45 percent to
     65,869, while the number of social welfare organizations
     increased about 14 percent to 142,473.  Conversely, the number
     of labor and agricultural organizations declined about 18
     percent to 71,653. 

  -- The assets (in 1990 dollars) of all three types of organizations
     increased.  Business leagues' assets increased more than 140
     percent to over $19 billion, while those of labor and
     agricultural organizations increased about 47 percent to nearly
     $14 billion and those of social welfare organizations increased
     about 20 percent to over $35 billion. 

  -- The change in revenue (in 1990 dollars) varied for these types
     of organizations.  While revenue for business leagues increased
     nearly 144 percent to $18 billion and revenue for labor and
     agricultural organizations increased about 13 percent to over
     $12 billion, the revenue for social welfare organizations
     declined almost 47 percent to $18 billion. 

  -- The change in expenses (in 1990 dollars) for these organizations
     also varied.  The expenses of business leagues increased about
     145 percent to just over $18 billion and those of labor and
     agricultural organizations increased nearly 19 percent to $12.7
     billion.  Meanwhile, the expenses of social welfare
     organizations declined about 48 percent to $17.7 billion. 

We analyzed the organizations' 1992 annual returns to determine the
compensation for the 5 highest paid executives from 46 of each of the
largest social welfare organizations, labor and agricultural
organizations, and business leagues, as measured by the
organizations' assets.  Of 673 executives identified, we found that
100 executives (about 15 percent) received $200,000 or more in
compensation for 1992.  Conversely, 198 executives (about 29 percent)
received no compensation for 1992. 

IRS is responsible for monitoring the activities of tax-exempt
organizations through examinations of their annual returns.  In
general, between 1990 and 1994 examinations of social welfare
organizations, labor and agricultural organizations, and business
leagues decreased about 30 percent, while the amount of taxes and
penalties resulting from these examinations increased about 200
percent.  IRS also revoked the tax-exempt status of 67 of these types
of organizations between 1992 and 1994. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :2

To identify changes in the number, assets, income, and expenses of
tax-exempt organizations, we reviewed IRS annual reports and studies
by its Statistics of Income Division.  To portray the changes in the
real value of the organizations' assets, income, and expenses, we
converted the financial information in these reports, which were
available for 1975 and 1990, to 1990 dollars. 

To determine the compensation that executives received from social
welfare organizations, labor and agricultural organizations, and
business leagues, we obtained, and analyzed 285 IRS Form 990
returns--"Return of Organization Exempt From Income Tax"--filed by
some of the largest of these organizations for tax year 1992, the
most recent year available at the time of our review.  A Form 990
return contains detailed information about an organization's assets,
revenue, and expenses, including the compensation paid to its
executives.  The return must be filed annually with IRS by
organizations with gross receipts that exceed $25,000, and must be
made available to the public according to the IRC. 

As agreed with you, we sought to obtain the Form 990 returns for tax
year 1992 from 50 of each of the largest social welfare organizations
and labor and agricultural organizations, as well as from 200 of the
largest business leagues.  We identified these organizations on the
basis of the amount of their assets as recorded in an IRS Exempt
Organization Business Master File (EOBMF) containing all active
tax-exempt organizations as of March 31, 1994.  Of the returns we
requested, we received and analyzed 46 returns of social welfare
organizations, 46 returns of labor and agricultural organizations,
and 193 returns of business leagues.  IRS was unable to provide the
remaining returns at the time of our request.  Appendix III lists
those organizations for which we received and analyzed a Form 990
return. 

Our analysis included an in-depth review of the section of the
returns detailing the compensation that the organizations paid to
their executives, including officers, directors, and key employees. 
We defined compensation to include salary; contributions to employee
benefit plans, including deferred compensation; and expense accounts
and other allowances\2 reported on the organizations' returns. 
Appendix I lists the executives we identified who received $200,000
or more from these types of organizations.  We also identified any
compensation that executives of these organizations received from
related organizations.  Appendix II lists the executives we
identified who received compensation from related organizations. 

To determine the rules governing lobbying and political activities
for these three types of organizations, as well as for charitable
organizations, we interviewed IRS Exempt Organization Division staff
and reviewed IRS guidelines, regulations, and the Internal Revenue
Code.  To identify IRS' compliance efforts related to these
organizations, including the number of examinations, the taxes and
penalties that resulted from these examinations, and the number of
organizations for which IRS revoked their tax-exemption, we
interviewed IRS Exempt Organization Division staff and reviewed
Exempt Organization Division annual compliance reports. 

We did our review from March 1994 through December 1994 at IRS'
national office in accordance with generally accepted government
auditing standards. 


--------------------
\2 These include expense allowances or reimbursements that recipients
must report as income on their individual income tax returns. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :3

On February 7, 1995, we discussed a draft of this report with IRS
Exempt Organization Division officials at the national office.  They
basically agreed with the information presented in the report and
provided some technical comments that were incorporated as
appropriate. 


---------------------------------------------------------- Letter :3.1

As agreed with you, unless you announce the contents of this briefing
report earlier, we plan no further distribution of this report until
15 days from the date of this letter.  At that time, we will send
copies of this report to various congressional committees, the
Commissioner of Internal Revenue, and other interested parties.  We
will also make copies available to others upon request. 

The major contributors to this report are listed in appendix V. 
Please contact me at (202) 512-9044 if you or your staff have any
questions about this briefing report. 

Natwar M.  Gandhi
Associate Director, Tax Policy
 and Administration


Briefing Section INFORMATION ON
SELECTED TYPES OF ORGANIZATIONS
============================================================== Letter 


   BACKGROUND ON TAX-EXEMPT
   ORGANIZATIONS
------------------------------------------------------------ Letter :4



   (See figure in printed
   edition.)

   Sources:  IRS Statistics of
   Income Division and Exempt
   Organization Business Master
   File.

   (See figure in printed
   edition.)


      BACKGROUND INFORMATION ON
      TAX-EXEMPT ORGANIZATIONS
---------------------------------------------------------- Letter :4.1

Internal Revenue Code (IRC) section 501(c) establishes 25 categories
of tax-exempt organizations that enjoy many benefits that for-profit
organizations do not.  In particular, tax-exempt organizations are
required to pay federal income taxes only on unrelated business
income.  They are also exempt from many state and local taxes.  In
addition, contributions to charities are deductible from donors'
federal income taxes. 

Charitable, religious, and educational organizations, tax-exempt
under IRC section 501(c)(3), and known collectively as charities, are
the largest category.  In 1990, of a total of 1,022,223 tax-exempt
organizations,\1 charities represented 489,891 (48 percent).  Social
welfare organizations represented the second largest category of
tax-exempt organization in 1990, totaling 142,473 (14 percent). 
Labor and agricultural organizations ranked fourth, while business
leagues ranked fifth, with totals of 71,653 (7 percent) and 65,896
(about 6 percent), respectively.  An additional 252,310 organizations
(about 25 percent) were exempt in 1990 under the remaining 21 IRC
501(c) categories. 

Overall, tax-exempt organizations have grown in number and size since
the mid-1970s.  Specifically, the total number of exempt
organizations has grown about 27 percent, from 806,375 organizations
in 1978 to more than 1 million in 1990.  Between 1975 and 1990, the
assets of these organizations have grown in real terms over 150
percent to more than $1 trillion, and their revenues have grown over
225 percent to about $560 billion, while the growth in real gross
domestic product (GDP) for the United States was 52 percent.  As of
1990, tax-exempt organizations accounted for approximately 10 percent
of GDP in terms of revenue, up from nearly 6 percent in 1975. 
Charities alone accounted for about 7 percent of GDP in 1990. 

This report focuses on social welfare organizations, labor and
agricultural organizations, and business leagues, which are
tax-exempt under IRC sections 501(c)(4), (5), and (6), respectively. 
Specific information concerning charitable organizations has been
included for comparison purposes. 


--------------------
\1 This total does not include certain 501(c)(3) religious
organizations that automatically qualify as tax-exempt and need not
apply to IRS for tax-exemption, as well as a small number of other
organizations that qualify as tax-exempt under other IRC sections. 


   SOCIAL WELFARE
   ORGANIZATIONS--IRC 501(C)(4)
------------------------------------------------------------ Letter :5



   (See figure in printed
   edition.)


      DEFINITION AND EXAMPLES OF
      SOCIAL WELFARE ORGANIZATIONS
---------------------------------------------------------- Letter :5.1

Organizations operated and organized exclusively for the promotion of
social welfare, including civic leagues, as well as local
associations of employees--known collectively as social welfare
organizations--are exempt from federal income taxes under IRC section
501(c)(4).  The net earnings of such organizations must be used
exclusively for charitable, educational, or recreational purposes. 
An example of an organization operated for the promotion of social
welfare is the American Association of Retired Persons.\2 An example
of a local association of employees is the Minneapolis Police Relief
Association. 

Social welfare organizations must promote the common good and general
welfare of the people of the community.  Court rulings have further
required that a social welfare organization benefit a whole community
of people rather than a private group of citizens.  For example, in
one case the court ruled that a nonprofit corporation formed to
acquire and operate a low-cost housing cooperative was not a
tax-exempt social welfare organization because, rather than offering
a service to the community-at-large, it only provided a service to
its members.  However, an organization that benefits a private group
of citizens can be ruled tax-exempt if it can establish that it also
benefits the entire community.  For example, IRS has ruled that an
organization engaged in the rehabilitation and job placement of its
members was tax-exempt because it benefited the community as a whole,
even though its membership was limited. 


--------------------
\2 We selected examples of the largest IRC section 501(c)(4), (5),
and (6) organizations on the basis of their assets. 


   LABOR, AGRICULTURAL, AND
   HORTICULTURAL ORGANIZATIONS--
   IRC 501(C)(5)
------------------------------------------------------------ Letter :6



   (See figure in printed
   edition.)



      DEFINITION AND EXAMPLES OF
      LABOR, AGRICULTURAL, AND
      HORTICULTURAL ORGANIZATIONS
---------------------------------------------------------- Letter :6.1

Labor, agricultural, and horticultural organizations--known
collectively as labor and agricultural organizations--are exempt from
federal income taxes under IRC section 501(c)(5).  These
organizations must have one or more of the following objectives:  (1)
bettering the conditions of persons engaged in the pursuits of labor,
agriculture, or horticulture, (2) improving the grade of their
products, or (3) developing a higher degree of efficiency in their
respective occupations.  In addition, the net earnings of these
organizations may not inure to the benefit any of their members.\3

IRS defines a labor organization as an association of workers who
have combined to promote their interests by bargaining collectively
with their employers to secure better working conditions, wages, and
similar benefits.  These organizations are generally composed of
employees or representatives of employees, but may also include
employers, self-employed persons, and independent contractors.  They
may provide benefits to their members or members' families in the
event of a strike, lockout, death, accident, or similar occurrence. 
An example of a labor organization is the International Union -
United Auto, Aerospace, and Agricultural Workers (UAW). 

IRS uses the term agricultural to cover both agricultural and
horticultural organizations.  IRS defines agriculture as the art or
science of cultivating the ground, including the preparation of the
soil, the planting of seeds, the raising and harvesting of crops, and
the rearing, feeding, and management of livestock, as well as the
harvesting of aquatic products.  IRS defines horticulture as the
cultivation of a garden or orchard, as well as the art or science of
growing fruits, vegetables, flowers or ornamental plants.  An example
of an agricultural organization is the Ohio Farm Bureau Federation,
Inc. 


--------------------
\3 This prohibition generally states that a person can only receive
reasonable payment from an organization for goods and services
provided. 


   BUSINESS LEAGUES--IRC 501(C)(6)
------------------------------------------------------------ Letter :7



   (See figure in printed
   edition.)



      DEFINITION AND EXAMPLES OF
      BUSINESS LEAGUES
---------------------------------------------------------- Letter :7.1

Business leagues, chambers of commerce, real estate boards, boards of
trade, and professional football leagues--known collectively as
business leagues--are exempt from federal income taxes under IRC
section 501(c)(6).  Business leagues cannot be organized for profit,
and no part of their net earnings can inure to the benefit of any
private shareholder or individual.  Examples of business leagues
include the American Bureau of Shipping, the American Medical
Association, and the Chamber of Commerce of the U.S.A. 

Treasury regulations define a business league as an association of
persons having a common business interest whose purpose is to promote
that interest.  To qualify for tax-exempt status as a business
league, an organization cannot engage in a regular business of a kind
ordinarily carried on for profit, even if the business is operated on
a cooperative basis or produces only sufficient income to be
self-sustaining.  Furthermore, the organization must work toward
improving the business conditions of one or more lines of business
rather than performing services for a particular business. 


   CHARITABLE, RELIGIOUS AND
   EDUCATIONAL ORGANIZATIONS--IRC
   501(C)(3)
------------------------------------------------------------ Letter :8



   (See figure in printed
   edition.)



      DEFINITION AND EXAMPLES OF
      CHARITIES
---------------------------------------------------------- Letter :8.1

Organizations operated and organized exclusively for charitable,
religious, scientific, testing for public safety, literary, or
educational purposes--known collectively as charities--are exempt
from federal income taxes under IRC section 501(c)(3).  Charities
must benefit the general public as opposed to benefiting only private
individuals or groups.  Some activities considered to be charitable
include (1) relieving the poor and distressed, (2) advancing religion
or education, (3) erecting or maintaining public buildings or
monuments, (4) lessening the burdens of government, and (5)
eliminating prejudice.  Examples of charities are the Salvation Army,
the American Cancer Society, and Harvard University.\4

IRS staff use standards that have evolved over time from both IRS and
court rulings when determining whether an organization qualifies as a
tax-exempt charity.  For example, IRS has determined that an
employment agency that operated exclusively to secure employment
without charge to the elderly qualified as a charity because it
provided services for a segment of the public with limited means. 
Conversely, IRS has determined that a pharmaceutical service operated
by a nonprofit organization was not tax-exempt because, although it
provided discount pharmacy services to handicapped and senior
citizens, it also provided pharmacy services to the general public. 
Furthermore, the pharmaceutical service did not provide free or below
cost drugs to the poor.  As a result, IRS determined that the
pharmacy was not operated exclusively for charitable purposes because
it was primarily engaged in commercial activity. 


--------------------
\4 We selected examples of charities on the basis of the largest
amount of charitable donations received. 


   NUMBER OF TAX-EXEMPT
   ORGANIZATIONS (1978-1990)
------------------------------------------------------------ Letter :9



   (See figure in printed
   edition.)

   Source:  IRS Exempt
   Organization Business Master
   File.

   (See figure in printed
   edition.)



      NUMBER OF TAX-EXEMPT
      ORGANIZATIONS(1978-1990)\5
---------------------------------------------------------- Letter :9.1

Between 1978 and 1990, the total number of organizations exempt from
taxation under IRC section 501(c) increased from 806,375 to
1,022,223, an increase of about 27 percent.  During this period, of
the three types of organizations that are the focus of this study,
business leagues increased the most, about 45 percent, from 45,325 in
1978 to 65,869 in 1990.  Social welfare organizations increased
nearly 14 percent, from 125,317 in 1978 to 142,473 in 1990.  Labor
and agricultural organizations declined about 18 percent, decreasing
from 87,531 in 1978 to 71,653 in 1990.  By comparison, charities
increased nearly 67 percent, from 293,947 in 1978 to 489,891 in 1990,
while all other tax-exempt organizations combined decreased less than
1 percent, from 254,300 in 1978 to 252,300 in 1990. 


--------------------
\5 Specific data on the number of exempt organizations was not
readily available prior to 1978. 


   ASSETS OF SELECTED TAX-EXEMPT
   ORGANIZATIONS (1975-1990)
----------------------------------------------------------- Letter :10



   (See figure in printed
   edition.)

   Source:  IRS Statistics of
   Income Division.

   (See figure in printed
   edition.)



      ASSETS OF SELECTED
      TAX-EXEMPT ORGANIZATIONS
      (1975-1990)
--------------------------------------------------------- Letter :10.1

Business leagues' assets increased more percentage-wise than those of
social welfare organizations and labor and agricultural organizations
between 1975 and 1990, in 1990 dollars.  Specifically, business
leagues' assets increased over 140 percent, from nearly $8 billion in
1975 to more than $19 billion in 1990.  Labor and agricultural
organizations' assets increased about 47 percent during this period,
from $9.3 billion to $13.7 billion, although the total number of
these types of organizations declined.  Social welfare organizations'
assets increased about 20 percent, from $29.3 billion in 1975 to
$35.1 billion in 1990. 

Investments in securities comprised the single largest asset category
in 1990 for all three types of organizations, including social
welfare organizations ($7.4 billion), labor and agricultural
organizations ($4.6 billion), and business leagues ($6.2 billion). 


   REVENUES OF SELECTED TAX-EXEMPT
   ORGANIZATIONS (1975-1990)
----------------------------------------------------------- Letter :11



   (See figure in printed
   edition.)

   Source:  IRS Statistics of
   Income Division.

   (See figure in printed
   edition.)



      REVENUES OF SELECTED
      TAX-EXEMPT ORGANIZATIONS
      (1975 TO 1990)
--------------------------------------------------------- Letter :11.1

The revenues of business leagues also increased more percentage-wise
than those of social welfare organizations or labor and agricultural
organizations between 1975 and 1990, in 1990 dollars.  The revenues
of business leagues increased nearly 144 percent, from $7.4 billion
in 1975 to $18 billion in 1990.  By contrast, the revenues of labor
and agricultural organizations increased about 13 percent during this
period, from $10.9 billion to $12.4 billion, while the revenues of
social welfare organizations declined about 47 percent, from $33.8
billion to $18 billion. 

Revenues from program services and membership fees were the two
largest revenue sources for business leagues in 1990, totaling over
$7 billion each.  Program services are the services provided in
carrying out the major objectives of a tax-exempt organization, such
as the publication of journals and newsletters.  Labor and
agricultural organizations received most of their revenues in
1990--$7.3 billion--from membership fees, while social welfare
organizations received most of their revenues in 1990--$11.5
billion--from program services. 


   EXPENSES OF SELECTED TAX-EXEMPT
   ORGANIZATIONS (1975-1990)
----------------------------------------------------------- Letter :12



   (See figure in printed
   edition.)

   Source:  IRS Statistics of
   Income Division.

   (See figure in printed
   edition.)



      EXPENSES OF SELECTED
      TAX-EXEMPT ORGANIZATIONS
      (1975-1990)
--------------------------------------------------------- Letter :12.1

The expenses of business leagues increased about 145 percent, from
$7.4 billion in 1975 to $18.2 in 1990, in 1990 dollars, while the
expenses of labor and agricultural organizations increased about 19
percent, from $10.6 billion to $12.7 billion.  The expenses of social
welfare organizations declined about 48 percent, from $34.2 billion
in 1975 to $17.7 billion in 1990. 

Benefits paid to or for members, at $5.7 billion, was the largest
expense item in 1990 for social welfare organizations, followed
closely by "other" expenses at $5.2 billion.  "Other" expenses, which
included various items, such as advertising and consulting fees,
comprised the largest expense category in 1990 for both labor and
agricultural organizations and business leagues at $3.3 billion and
$7.7 billion, respectively.  The second largest expense for these
organizations was salaries and wages at $2 billion and $2.9 billion,
respectively. 


   INUREMENT OF BENEFITS
----------------------------------------------------------- Letter :13



   (See figure in printed
   edition.)



      INUREMENT OF BENEFITS
--------------------------------------------------------- Letter :13.1

The Internal Revenue Code prohibits the net earnings of business
leagues and charities from inuring to the benefit of any private
shareholder or individual, and Treasury regulation section
1.501(c)(5)-1(a)(1) establishes the same prohibition for labor and
agricultural organizations.  For these organizations, inurement can
result in loss of their tax-exempt status.  At the present time,
there is no similar prohibition for social welfare organizations. 

This prohibition generally states that a person can only receive
reasonable payment from an organization for goods or services
provided.  Specifically, inurement exists in several types of
circumstances where benefits, such as unreasonable compensation, low
or no-interest loans, and personal expenses, flow to an
organization's officers, directors, and other "insiders." While there
is no absolute measure of inurement, IRS and the courts assess
whether the compensation is reasonable for the services provided and
if compensation was agreed upon through arms length negotiations. 

In a May 1994 report, the Subcommittee on Oversight of the House
Committee on Ways and Means concluded that IRS is not appropriately
enforcing the current prohibitions on inurement related to its
oversight of charities, and recommended that IRS be allowed to invoke
an intermediate sanction against any charity that engages in
activities resulting in inurement. 


   REASONABLE COMPENSATION
----------------------------------------------------------- Letter :14



   (See figure in printed
   edition.)



      REASONABLE COMPENSATION
--------------------------------------------------------- Letter :14.1

One of IRS' primary measures of whether inurement has occurred is
whether compensation paid to an executive is reasonable.  For-profit
businesses are allowed to deduct from their taxable income a
reasonable allowance for salaries or other compensation for personal
services rendered.  This standard also has been applied to tax-exempt
organizations by the courts as one way to determine whether inurement
of benefits has taken place. 

When deciding whether compensation is reasonable, IRS first must
determine the total amount of compensation paid by the organization. 
Specifically, IRS considers the following to be compensation:  (1)
salary or wages, (2) contributions to pension and profit sharing
plans, (3) unpaid deferred compensation, (4) payment of personal
expenses, (5) rents, royalties or fees, and (6) personal use of an
organization's property or facilities. 

Once IRS determines the total amount of compensation, it then decides
whether the compensation is reasonable.  IRS has no pre-set limit on
reasonable compensation, but judges reasonableness on a case-by-case
basis, as do the courts.  For example, in one case the courts
determined that inurement existed when a college compensated an
executive according to a formula based on stock ownership, rather
than paying a reasonable amount for services rendered.  In another
case, IRS determined that a hospital's contract to pay a radiologist
a percentage of the gross receipts of the radiology department did
not constitute inurement because the agreement was reached through
arms length bargaining and the radiologist had no controlling
interest in the hospital. 

The primary way IRS determines reasonableness is a comparison of
compensation paid by similar organizations.  IRS also considers the
salary history of the individual, his or her responsibilities, the
salary scale of employees in general, and the amount of control the
individual has in determining his or her own salary. 


   EXECUTIVE COMPENSATION PAID BY
   SELECTED ORGANIZATIONS (1992)
----------------------------------------------------------- Letter :15



   (See figure in printed
   edition.)

   Source:  GAO analysis of IRS
   data.

   (See figure in printed
   edition.)



      EXECUTIVE COMPENSATION PAID
      BY SELECTED TAX-EXEMPT
      ORGANIZATIONS (1992)\6
--------------------------------------------------------- Letter :15.1

In 1992, about 62 percent of the highest paid executives of 46 of
each of the largest social welfare organizations, labor and
agricultural organizations, and business leagues received less than
$100,000 in compensation, while nearly 15 percent received $200,000
or more.  Specifically, out of a total of 673 executives, including
officers, directors, and key employees, identified on the annual
returns these organizations filed with IRS, 198 (about 29 percent)
received no compensation, 218 (about 32 percent) received from $1 to
$100,000, and 157 (about 23 percent) received from $100,000 to
$200,000.  There were also 100 executives (about 15 percent) who
received more than $200,000 in compensation. 

Business leagues had both the largest number of executives receiving
no compensation as well as those receiving more than $200,000, with
90 and 44, respectively.  Labor organizations had the most executives
making between $100,000 and $200,000 with 73, while social welfare
organizations had the most executives making between $0 and $100,000
with 87. 

Of the organizations we reviewed, The PGA Tour, Inc., a business
league, paid the highest overall 1992 executive compensation ($4.1
million) to its Commissioner.\7 The highest compensated executive of
a social welfare organization was the Chairman, President, and Chief
Executive Officer of the Mutual of America Life Insurance Company who
received $1.2 million.  The highest compensated officer of a labor or
agricultural organization was the Executive Director of the Major
League Baseball Players Association who received over $900,000. 


--------------------
\6 Our compensation figures include all salary, benefits, including
deferred compensation, and expense account items that an employee is
required to claim on his or her individual income tax return, such as
the value of housing, automobiles or other assets owned or leased by
the organization.  Although our compensation figures are for 1 year,
compensation may vary from year to year. 

\7 The examples are presented to illustrate the range of salaries
paid by these organizations to their executives.  We did not attempt
to determine whether or not the compensation was reasonable. 


   RELATED ORGANIZATIONS
----------------------------------------------------------- Letter :16



   (See figure in printed
   edition.)



      RELATED ORGANIZATIONS
--------------------------------------------------------- Letter :16.1

A tax-exempt organization may be related to another organization that
may be either a tax-exempt or taxable entity.  For example, a social
welfare organization might establish a tax-exempt charitable
affiliate to receive tax deductible contributions, so long as their
records show that their finances are kept separate.  Conversely, a
charitable organization could establish a social welfare organization
to carry out lobbying and political activities, so long as the two
organizations are separately incorporated, and they can document that
contributions made to the charitable organization are not provided to
the social welfare organization. 

Executives, such as directors and officers, may serve and be
compensated by related organizations.  Each organization is required
to describe its program and financial activities, including any
transactions with related organizations, in its annual return filed
with IRS.  This includes any compensation paid to an executive by a
related organization, provided the executive's total compensation is
more than $100,000, of which more than $10,000 was provided by the
related organization. 

Of the 285 organizations we reviewed, 29 reported that their
executives met these criteria.  The amounts of total related
compensation paid to these executives ranged from $12,320 to $711,807
(see app.  II). 


   LOBBYING AND POLITICAL
   ACTIVITIES
----------------------------------------------------------- Letter :17



   (See figure in printed
   edition.)



      LOBBYING AND POLITICAL
      ACTIVITIES
--------------------------------------------------------- Letter :17.1

Lobbying activity involves an attempt to influence legislation
through such means as contacting or urging the public to contact a
member or employee of a legislative body, or a government official or
employee of an executive agency who is in a position to propose,
support, oppose, or reject legislation.  "Grass-roots" lobbying is an
attempt to influence the opinion of the general public concerning
legislation. 

Lobbying activity is permitted for social welfare organizations,
labor and agricultural organizations, and business leagues and can be
the primary activity of these types of organizations, providing it
relates to their tax-exempt purposes.  Certain charities may spend up
to a maximum of $1 million annually on lobbying activities, provided
that no more than 25 percent of the lobbying expenditures involves
"grass-roots" lobbying.  Charities that do not elect this lobbying
limit may not engage in substantial lobbying activity. 

Political activity involves participating or intervening in a
political campaign on behalf of or in opposition to a candidate for
public office.  This type of activity includes the publication or
distribution of printed statements and the making of oral statements
favoring one candidate over another.\8

Social welfare organizations, labor and agricultural organizations,
and business leagues can engage in political activity, provided it is
not the organizations' primary activity.  For charities, political
activity is generally prohibited.  However, nonpartisan voter
education, such as disseminating the overall voting record of Members
of Congress pertaining to a variety of issues or conducting a
"get-out-the-vote" drive, is a permissible activity. 


--------------------
\8 Tax-exempt organizations may establish separate segregated funds
for conducting political activities.  Such funds, established under
IRC section 527, are tax-exempt as "political organizations" provided
contributions to the fund are used primarily for political purposes. 
Due to the strict limitations related to the political activity of
charities imposed by IRC section 501(c)(3), a separate segregated
fund established by a charity may not be used for political campaign
involvement, such as influencing the election of a public official. 
Social welfare organizations, labor and agricultural organizations,
and business leagues have no such limitation. 


   TAX DEDUCTIBILITY OF
   CONTRIBUTIONS, DUES AND
   MEMBERSHIP FEES
----------------------------------------------------------- Letter :18



   (See figure in printed
   edition.)



      DEDUCTIBILITY OF
      CONTRIBUTIONS, DUES, AND
      MEMBERSHIP FEES PAID TO
      TAX-EXEMPT ORGANIZATIONS
--------------------------------------------------------- Letter :18.1

One of the benefits of tax-exempt status is the deductibility of
contributions, dues, and membership fees to taxpayers who provide
such sources of revenue to tax-exempt organizations.  This enables
these organizations to raise some of the revenue needed to carry out
their tax-exempt purpose. 

Contributions to social welfare, labor and agricultural
organizations, and business leagues are not tax deductible.  Dues and
membership fees paid to these organizations are deductible as a
business expense, if they are ordinary and necessary for conducting
the payor's business.  However, the organizations must inform the
contributors if any portion of such dues and membership fees is to be
used for lobbying, because that portion is not tax deductible to the
payors. 

Contributions made to charities are tax deductible to the
contributors, provided the contributions are not "earmarked" for
either political activities or lobbying.  Dues and membership fees
paid to charities are tax deductible only to the extent that the
amount paid is more than the value of any benefits received by the
payor. 


   PROCESS FOR OBTAINING
   TAX-EXEMPT STATUS
----------------------------------------------------------- Letter :19



   (See figure in printed
   edition.)

An organization must apply for tax-exempt status to the IRS district
office responsible for the geographic location in which the
organization maintains its principal place of business.\9 When
applying, the organization must submit the following to IRS:  (1) a
signed application form; (2) an IRS Form 8718, "User Fee for Exempt
Organization Determination Letter Request" with the appropriate user
fee; (3) IRS Form SS-4, "Application for Employer Identification
Number" (EIN) if the organization does not have an EIN; (4) various
organizational documents, such as its Articles of Incorporation; (5)
a narrative statement of past, present, and proposed activities; and
(6) a proposed budget for 2 years for organizations with less than 1
year of operations, and (7) a statement of receipts and expenditures
for the current and 3 preceding years, and a balance sheet for the
most recent period for ongoing organizations. 

IRS district office staff are to review the application package for
completeness and determine whether the organization qualifies for tax
exemption.  If, during the initial screening IRS staff determine that
the application package is incomplete, they are to contact the
organization to obtain the missing information.  Once the application
is complete, IRS staff are to conduct a technical screening to
determine if the application needs to be reviewed by an Exempt
Organization specialist.  In general, these specialists review
applications that involve unusual circumstances, controversial
issues, or contain voluminous attachments.  If the specialist has
concerns not specifically covered by statute, regulation, Treasury
decision, or a ruling published in the Internal Revenue Bulletin, the
application must be forwarded to IRS National Office staff for
further review.  Once the application review has been completed, IRS
is to notify the organization with a determination letter. 

IRS reviewed more than 57,000 applications for tax exemption in 1992. 
Of these, IRS approved nearly 44,000 (77 percent) and denied nearly
1,000 (2 percent).  An additional 12,000 (21 percent) applications
were neither approved nor denied because the organizations either
withdrew their application or failed to provide the additional
information requested by IRS. 


--------------------
\9 In the near future, IRS plans to consolidate its process for
determining the tax-exempt status of organizations in one "key"
district office. 


   IRS EXAMINATIONS OF TAX-EXEMPT
   ORGANIZATIONS (FY90-94)
----------------------------------------------------------- Letter :20



   (See figure in printed
   edition.)

   Source:  IRS Exempt
   Organization Division.

   (See figure in printed
   edition.)



      IRS EXAMINATIONS OF SELECTED
      TAX-EXEMPT ORGANIZATIONS
      (FY90- FY94)
--------------------------------------------------------- Letter :20.1

Between fiscal years 1990 and 1994, the number of IRS' examinations
decreased substantially for both social welfare organizations and
business leagues, and increased slightly for labor and agricultural
organizations.  Specifically, examinations of social welfare
organizations decreased from 816 in fiscal year 1990 to 397 in fiscal
year 1994.  During this same period the number of examinations of
business leagues decreased from 1500 to 874.  Meanwhile, the
examinations of labor and agricultural organizations initially
decreased from 764 in fiscal year 1990 to 560 in fiscal year 1992,
but then subsequently increased to 828 in fiscal year 1994. 

We did not attempt to determine the adequacy of IRS' efforts to
monitor the activities of these organizations.  However, in its May
1994 report, the Subcommittee on Oversight of the House Committee on
Ways and Means recommended that IRS increase both the staffing and
funding levels allocated for exempt organization examination and
compliance activities, particularly related to charities. 


   TAXES AND PENALTIES ASSESSED
   AGAINST EXEMPT ORGS.  (FY90-94)
----------------------------------------------------------- Letter :21



   (See figure in printed
   edition.)

   Source:  IRS Exempt
   Organization Division.

   (See figure in printed
   edition.)



      TAXES AND PENALTIES ASSESSED
      AGAINST SELECTED TAX-EXEMPT
      ORGANIZATIONS (FY90-FY94)
--------------------------------------------------------- Letter :21.1

While the combined number of examinations of social welfare
organizations, labor and agricultural organizations, and business
leagues has declined from fiscal year 1990 to fiscal year 1994, the
taxes and penalties assessed against these organizations increased
greatly during this period.  For example, the taxes and penalties
assessed against social welfare organizations increased from $484,554
in fiscal year 1990 to over $138 million in fiscal year 1994.  During
this period, taxes and penalties assessed against labor and
agricultural organizations increased from about $2.4 million in
fiscal year 1990 to nearly $20 million in fiscal year 1994, while
taxes and penalties assessed against business leagues decreased from
nearly $4.2 million to just over $1.1 million.  A majority of these
assessments resulted from examinations of IRS Form 990T, "Exempt
Organization Business Income Tax Return."\10



--------------------
\10 Tax exempt organizations must file a separate return and pay
income taxes on income over $1,000 that they receive as a result of
activities that are not related to their exempt purpose. 


   NUMBER OF REVOCATIONS OF
   TAX-EXEMPT STATUS (FY92-94)
----------------------------------------------------------- Letter :22



   (See figure in printed
   edition.)

   Source:  IRS Exempt
   Organizations Division.

   (See figure in printed
   edition.)



      REVOCATIONS OF TAX-EXEMPTION
      FOR SELECTED ORGANIZATIONS
      (FY92- FY94)
--------------------------------------------------------- Letter :22.1

Between fiscal year 1992 and fiscal year 1994, IRS revoked the
tax-exemptions of a combined 67 social welfare organizations, labor
and agricultural organizations, and business leagues.\11 IRS revoked
the tax exemption of 34 social welfare organizations, 31 business
leagues, and 2 labor organizations during this 3-year period.  IRS
was unable to provide us with the specific reasons for these
revocations. 

In its May 1994 report, the Subcommittee on Oversight recommended
that IRS be required to disclose the reasons for revoking an
organization's tax-exempt status.  At present, IRS is only required
to disclose the name of charities that have had their tax-exemption
revoked. 


--------------------
\11 IRS could not provide specific data concerning revocations prior
to FY 92. 


EXECUTIVES OF SELECTED TAX-EXEMPT
ORGANIZATIONS WHO WERE COMPENSATED
$200,000 OR MORE IN 1992
=========================================================== Appendix I

                                                            Compensati
Organization                  Title                                 on
----------------------------  ----------------------------  ----------
Social welfare organizations
----------------------------------------------------------------------
American Association of       Executive Director              $323,537
 Retired Persons
AVMED, Inc.                   President/Director               235,459
                              Senior Vice-President/           205,390
                               Director
Blue Cross Blue Shield        President and Chief              777,947
 Association                   Executive Officer
                              Executive Vice-President and     413,091
                               Chief Operating Officer
                               (COO)
                              Senior Vice-President            221,929
                              Senior Vice-President            210,589
                              Senior Vice-President            200,960
Connecticare                  Executive Vice-President and     282,794
                               Chief Medical Officer
                              President and Chief              216,845
                               Executive Officer
Higher Education Assistance   President                        220,452
 Foundation
Independent Health            President                        316,464
 Association, Inc.
                              Executive Vice-President         251,865
Marine Spill Response         President                        244,679
 Corporation
                              Vice-President-Operations/       211,137
                               General Manager
Midwest Foundation            Chief Executive Officer          380,718
 Independent Physicians
 Association
                              Chief Medical Officer            241,995
Mutual of America Life        Chairman, President and        1,209,573
 Insurance Company             Chief Executive Officer
                              Senior Executive Vice-           328,173
                               President and Chief
                               Financial Officer
                              President and COO                322,338
                              Executive Vice-President/        313,931
                               Chief Investment Officer
                              Executive Vice-President-        287,455
                               External Affairs
Tufts Associated Health       President                        428,887
 Maintenance Organization
                              None Given                       357,106
                              None Given                       314,211
                              None Given                       233,810
Washington Dental Service     Executive Director               296,378

Labor and agricultural organizations
----------------------------------------------------------------------
Air Line Pilots Association   President                        345,522
American Federation of        President                        260,004
 State, County and Municipal
 Employees (AFSCME)
                              Secretary/Treasurer              222,965
American Federation of        President                        209,045
 Teachers, AFL-CIO
Directors Guild of America    Executive Director               420,627
International Longshoremens   President                        272,069
                              Secretary/Treasurer              245,494
                              Executive Vice-President         233,354
International Union of        General President                223,897
 Operating Engineers
Laborers International Union  General President                318,827
 of North America
                              Second Vice-President            232,436
                              First Vice-President             225,928
                              General Secretary/Treasurer      218,149
                              Seventh Vice-President           214,264
Local 32B-32J Service         President                        267,119
 Employees International
 Union
Major League Baseball         Executive Director-Legal         931,578
 Players Association           Counsel
Michigan Education            Executive Director               220,632
 Association
National Education            President                        221,712
 Association of US, Inc.
New York City District        Executive Director               216,858
 Council 37, AFSCME, AFL-
 CIO
                              Treasurer                        202,749
Screen Actors Guild, Inc.     National Executive Director      318,007
                              Assistant National Executive     277,706
                               Director
Service Employees             President                        203,080
 International Union
United Brotherhood of         General President                219,136
 Carpenters and Joiners of
 America
United Food and Commercial    President                        293,992
 Workers International Union
                              Secretary/Treasurer              211,337
United Transportation Union   Vice-President                   285,903
                              Vice-President                   277,105
                              President                        214,927

Business leagues
----------------------------------------------------------------------
AIPSO                         President                        275,713
Air Transport Association of  President                        230,603
 America
American Bankers Association  Executive Vice-President         489,951
American Bar Association      Executive Director               230,525
American Board of Family      Executive Director               381,305
 Practice
American College of           Executive Director               270,625
 Emergency Physicians
American Dental Association   Executive Director               215,850
American Gas Association      President                        343,780
                              Senior Vice-President            207,667
                              Senior Vice-President            203,125
American Hardware             President, Chief Executive       373,588
 Manufacturing Association     Officer and Secretary
American Health Care          Executive Vice-President         310,059
 Association
American Hospital             President                        536,200
 Association
                              Senior Vice-President            258,766
                              Secretary/Treasurer              244,636
                              Executive Vice-President         238,540
                              Senior Vice President            213,859
American Institute of         Executive Vice-President/        303,787
 Architects                    Chief Executive Officer
American Institute of         President                        512,947
 Certified Public
 Accountants
                              Counsel and Secretary            263,195
American Insurance            President                        616,176
 Association Inc.
                              Senior Vice-President            260,065
                              Senior Vice-President and        242,569
                               General Counsel
                              Senior Vice-President            230,782
American Medical Association  Executive Vice-President         486,910
                              President-Elect                  329,607
                              President                        298,240
                              Immediate Past-President         220,070
American Petroleum Institute  President                        742,111
                              Senior Vice-President            282,393
                              Vice-President                   215,108
                              Vice-President                   213,440
                              Vice-President                   205,387
American Pharmaceutical       Executive Vice-President         336,849
 Association
American Physical Therapy     Executive Vice-President         259,614
 Association
American Society of           President                        430,043
 Association Executives
American Society of Hospital  Executive Vice-President         458,773
 Pharmacists
American Trucking             President                        295,750
 Association, Inc.
AMT -The Association For      President                        346,047
 Manufacturing Technology
Association of American       President and Chief              488,188
 Railroads                     Executive Officer
                              Vice-President and General       288,065
                               Counsel
                              Executive Vice-President         274,393
ATP Tour, Inc.                Chief Executive Officer          871,321
Audio Digest Foundation       Vice-President                   207,400
Bank Administration           President/Chief Executive        245,000
 Institute                     Officer
Breeders' Cup Limited         Executive Director               209,053
                              President                        203,077
Cable Television Labs, Inc.   President/Chief Executive        394,038
                               Officer
                              Vice-President/COO               385,004
California Association of     President                        432,998
 Hospitals and Health
 Systems
California Association of     Chief Executive                  250,866
 Realtors
                              Vice-President                   206,145
California Dental             Executive Director               225,443
 Association
Chamber of Commerce of the    President                        452,704
 U.S.A.
                              Senior Vice-President/           220,877
                               Secretary
                              Senior Vice-President            220,877
                              Senior Vice-President            220,329
Chemical Industry Institute   President                        278,848
 of Toxicology
Cosmetic Toiletry and         President                        542,137
 Fragrance Association
Credit Union National         President                        304,728
 Association, Inc.
Edison Electric Institute     President                        272,970
                              General Counsel and              213,649
                               Executive Vice-President
Electronic Industries         President                        475,063
 Association
                              Group Vice-President             201,096
Food Marketing Institute      President                      1,559,305
                              Senior Vice-President            254,429
                              Senior Vice-President            229,470
Greater Seattle Chamber of    President                        211,909
 Commerce
Health Insurance Association  President                        422,307
 of America
                              Vice-President                   261,542
                              Vice-President                   211,379
                              Vice-President                   208,553
                              Vice-President                   201,846
Illinois Hospital             President                        283,858
 Association
                              Senior Vice-President            219,404
Independent Bankers           Executive Vice-President         218,728
 Association of America
Institute of Electrical and   Executive Director               255,993
 Electronics Engineers
International Council of      Executive Vice-President         539,681
 Shopping Centers, Inc.
Investment Company Institute  President                        619,602
                              Executive Vice-President         353,698
                              Senior Vice-President-           299,539
                               Legislative Affairs
                              Vice-President-Tax and           230,361
                               Pension
Motion Picture Association    President and Chief              816,368
 of America                    Executive Officer
                              Executive Vice-President and     606,115
                               COO
NASDAQ, Inc.                  President                        214,378
National Academy of           President                        612,386
 Recording Arts and
 Sciences, Inc.
National Association of       President                        634,426
 Chain Drug Stores
                              Vice-President-Pharmacy          269,408
National Association of       President                        212,884
 Convenience Stores
National Association of       None Given                       280,360
 Professional Insurance
 Agents
National Association of       Executive Vice-President         438,340
 Realtors
National Association of       President and Chief              431,178
 Securities Dealers, Inc.      Executive Officer
                              Vice-President                   202,072
National Council on           President                        445,580
 Compensation Insurance
                              COO                              317,772
                              Senior Vice-President-Rates      227,256
                               and External Affairs
                              Senior Vice-President-           200,328
                               Information Resource
National Electrical           President                        214,143
 Manufacturers Association
National Hot Rod Association  President                        335,000
National Institute for        President                        227,925
 Automotive Service
 Excellence
National Rural Electric       Executive Vice-President         233,777
 Cooperative
National Soft Drink           President                        503,798
 Association
National Solid Wastes         Executive Director/Chief         321,090
 Management Association        Executive Officer
National Telephone            Executive Director               232,300
 Cooperative Association
National Wholesale            Past Executive Director          589,149
 Druggists' Association
New York Shipping             President                        230,550
 Association, Inc.
Newspaper Association of      President and Chief              815,719
 America                       Executive Officer
                              Executive Vice-President and     309,361
                               COO
Open Software Foundation      President                      1,461,569
                              Treasurer                        914,216
                              Secretary                        267,299
PGA Tour, Inc.                Commissioner                   4,103,493
                              Deputy Commissioner/COO          693,335
                              Executive Vice-President -       528,580
                               Marketing
                              Executive Vice-President-        383,644
                               Counsel
                              Executive Vice-President         344,866
Portland Cement Association   President                        301,324
Public Securities             President and Secretary          320,424
 Association
                              Executive Vice-President         266,613
                              Senior Vice-President and        208,607
                               General Counsel
Savings and Community         Former President                 310,508
 Bankers of America
Savings Banks Life Insurance  President (Retired)              213,463
 Fund
Semiconductor Equipment and   President                        294,812
 Materials International
Semiconductor Research        President                        272,981
 Corporation
Sheet Metal and Air           Executive Vice-President         232,310
 Conditioning Contractors'
 National Association
Society for Human Resource    President/Chief Executive        334,080
 Management                    Officer
Texas Medical Association     Executive Vice-President         225,277
The Association of Trial      Executive Director               243,408
 Lawyers of America
The Council for Tobacco       Chairman/President               340,634
 Research -USA, Inc.
The Hospital Association of   President                        239,241
 Pennsylvania
                              Senior Vice-President            207,759
The National Association of   Executive Vice-President         586,026
 Life Underwriters
                              Senior Vice-President-           208,145
                               General Counsel
The Professional Golfers'     Chief Executive Officer          386,788
 Association of America
The Society of the Plastics   President                        290,637
 Industry, Inc.
----------------------------------------------------------------------
Source:  GAO analysis of IRS data. 


EXECUTIVES OF SELECTED TAX-EXEMPT
ORGANIZATIONS WHO RECEIVED
COMPENSATION FROM RELATED
ORGANIZATIONS IN 1992
========================================================== Appendix II

Organization (related
organization)             Title                           Compensation
------------------------  ------------------------  ------------------
Social welfare organizations
----------------------------------------------------------------------
Higher Education Loan     Chairman of the Board                $49,700
 Program (HELP) of         and Director
 Kansas
HELP Management                                                149,100
 Corporation
HELP America Inc.                                               12,400
HELP D.C. Inc.                                                  24,800
HELP W.V. Inc.                                                  12,400
======================================================================
Total                                                         $248,400
Higher Education Loan     President/Secretary/                  31,600
 Program (HELP) of         Treasurer
 Kansas
HELP Management                                                 52,800
 Corporation
HELP Management                                                 15,500
 Corporation
HELP W.V. Inc.                                                   5,400
======================================================================
Total                                                         $105,300
AVMED, Inc.               President/Director                   235,459
Santafe Management                                              16,011
 Services, Inc.
Alachua General                                                 35,676
 Hospital, Inc.
======================================================================
Total                                                         $287,146
AVMED, Inc.               Executive Vice                       147,812
                           President/Director
Wellness, Inc.                                                   3,650
Santafe Medical                                                  3,650
 Services, Inc.
Alachua General                                                 12,744
 Hospital, Inc.
Bradford Hospital, Inc.                                          3,650
Suwannee Hospital, Inc.                                          1,825
Lake Shore Hospital,                                             5,475
 Inc.
North Central Florida                                            3,650
 Rehabilitation, Inc.
Santafe Management                                               1,113
 Services, Inc.
======================================================================
Total                                                         $183,599
Henry Ford Health Care    President                                 $0
 Corporation Self-
 Funded Liability Plan
Henry Ford Health System                                       700,900
======================================================================
Total                                                         $700,900
Henry Ford Health Care    Trustee                                    0
 Corporation
 Self-Funded Liability
 Plan
Henry Ford Health System                                       488,108
======================================================================
Total                     $                                    488,108
Henry Ford Health Care    Treasurer                                  0
 Corporation Self-
 Funded Liability Plan
Henry Ford Health System                                       395,601
======================================================================
Total                                                         $395,601
Henry Ford Health Care    Trustee                                    0
 Corporation Self-
 Funded Liability Plan
Henry Ford Health System                                       263,210
======================================================================
Total                                                         $263,210
Henry Ford Health Care    Trustee                                    0
 Corporation Self-
 Funded Liability Plan
Henry Ford Health System                                       212,525
======================================================================
Total                                                         $212,525

Labor and Agricultural Organizations
----------------------------------------------------------------------
International             General Secretary-                   187,617
 Brotherhood of            Treasurer
 Teamsters
Teamsters Local Union                                           12,320
 No.30
======================================================================
Total                                                         $199,937
International             Vice President-                      166,564
 Brotherhood of            International
 Teamsters                 Representative
Teamsters Local Union                                           57,684
 No. 1999
Canadian Conference of                                          78,289
 Teamsters
======================================================================
Total                                                         $302,537
International             Vice President-                       84,523
 Brotherhood of            International
 Teamsters                 Representative
Teamsters Local Union                                           85,566
 No. 938
Canadian Conference of                                          19,100
 Teamsters
======================================================================
Total                                                         $189,189
District 37 Benefits      Chairman of the Board                    $ 0
 Fund Trust
AFSCME District Council                                        224,301
 37
======================================================================
Total                                                         $224,301
District 37 Benefits      Trustee                                    0
 Fund Trust
AFSCME District Council                                        210,016
 37
======================================================================
Total                     $                                    210,016
District 37 Benefits      Trustee                                    0
 Fund Trust
AFSCME District Council                                        184,408
 37
======================================================================
Total                                                         $184,408
Seafarers Harry Lundberg  Trustee                                    0
 School of Seamanship
Seafarers International                                         68,977
 Union of North America

United Industrial                                               40,000
 Workers, Services,
 Transportation,
 Professional, and
 Government of North
 America
Seafarers Building                                              24,923
 Corporation
======================================================================
Total                                                         $133,900
Joint Employment          Administrator                          5,323
 Committee
MEBA Medical and                                               140,540
 Benefits Plan
======================================================================
Total                                                         $145,863

Business Leagues
----------------------------------------------------------------------
National Association of   President and Chief                  431,178
 Securities Dealers,       Executive Officer
 Inc.
NASD Market Services,                                          214,378
 Inc.
NASDAQ, Inc.                                                   214,378
======================================================================
Total                                                         $859,934
National Association of   Executive Vice President             181,133
 Securities Dealers,
 Inc.
NASD Market Services,                                           90,566
 Inc.
NASDAQ, Inc.                                                    90,566
======================================================================
Total                                                         $362,265
PGA Tour, Inc.            Commissioner                      $4,103,493
PGA Tour Golf Course                                           711,807
 Properties, Inc.
======================================================================
Total                                                       $4,815,300
PGA Tour, Inc.            Deputy Commissioner/COO              693,335

PGA Tour Golf Course                                           676,512
 Properties, Inc.
======================================================================
Total                                                       $1,369,847
PGA Tour, Inc.            Executive Vice                       383,644
                           President/Counsel
PGA Tour Golf Course                                           159,420
 Properties, Inc.
======================================================================
Total                                                         $543,064
The Hospital Association  President                            239,241
 of Pennsylvania
PHICO Group, Inc.                                               83,750
======================================================================
Total                                                         $322,991
NASDAQ, Inc.              President                            214,378
NASD Market Services,                                          214,378
 Inc.
National Association of                                        428,760
 Securities Dealers,
 Inc.
======================================================================
Total                                                         $857,516
NASDAQ, Inc.              Senior Vice President                 92,367
NASD Market Services,                                           75,401
 Inc.
National Association of                                         20,734
 Securities Dealers,
 Inc.
======================================================================
Total                                                         $188,502
NASDAQ, Inc.              Executive Vice President              90,566
NASD Market Services,                                           90,566
 Inc.
National Association of                                        181,133
 Securities Dealers,
 Inc.
======================================================================
Total                                                         $362,265
NASDAQ, Inc.              Executive Vice President              84,710
NASD Market Services,                                           84,710
 Inc.
National Association of                                        169,422
 Securities Dealers,
 Inc.
======================================================================
Total                                                         $388,842
New Jersey Hospital       President                            142,871
 Association
Center for Health                                              214,089
 Affairs Inc.
======================================================================
Total                                                         $356,960
New Jersey Hospital       Treasurer                                  0
 Association
Center for Health                                              180,457
 Affairs Inc.
======================================================================
Total                                                         $180,457
New Jersey Hospital       Secretary                                  0
 Association
Center for Health                                              169,309
 Affairs Inc.
======================================================================
Total                                                         $169.309
National Automobile       Executive Vice President             163,586
 Dealers Association
NADA Services                                                  104,264
 Corporation
======================================================================
Total                                                         $267,850
National Automobile       Assistant Secretary                   72,011
 Dealers Association
NADA Services                                                   58,918
 Corporation
======================================================================
Total                                                         $130,929
American Trucking         President                            295,750
 Association, Inc.
ATA Litigation Center                                           45,500
ATA Foundation                                                  45,500
Deliver USA                                                     22,750
ATA Services, Inc.                                              22,750
Trucking Information                                            22,750
 Services
======================================================================
Total                                                         $455,000
California League of      President                             79,823
 Savings Institutions
California League                                               25,207
 Financial Services,
 Inc.
======================================================================
Total                                                         $105,030
National Wholesale        President                            157,611
 Druggists' Association
NWDA Service Corp.                                              22,370
======================================================================
Total                                                         $179,981
American Insurance        President                            616,176
 Association, Inc.
American Insurance                                             331,788
 Services Group, Inc.
======================================================================
Total                                                         $947,964
American Insurance        Senior Vice-President               $186,154
 Association, Inc.         and COO
American Insurance                                             124,104
 Services Group, Inc.
======================================================================
Total                                                         $310,258
----------------------------------------------------------------------
Note:  This table includes only the top five executives of these
organizations who received compensation from related organizations. 

Source:  GAO analysis of IRS data. 


ASSETS, REVENUES AND EXPENSES OF
THE TAX-EXEMPT ORGANIZATIONS
INCLUDED IN THIS STUDY
========================================================= Appendix III

                         (Dollars in thousands)

Name of organization                        Assets  Revenues  Expenses
----------------------------------------  --------  --------  --------
Social welfare organizations
----------------------------------------------------------------------
American Association of Retired Persons   $330,638  $292,264  $310,763
AVMED, Inc.                                 98,346   310,256   288,561
Bank of Sweden Tercentenary Foundation     284,429    20,988    14,371
Blue Care Network of Southeast Michigan    132,446   173,845   158,686
Blue Care Network-Great Lakes               54,598   172,034   169,729
Blue Cross Blue Shield Association         134,320   133,381   131,159
California Vision Service                  143,754   304,224   299,865
Capital District Physicians' Health         69,372   164,166   151,289
 Plan, Inc.
City of Mesa-Municipal Development          50,152     3,101     2,339
 Corporation
City of Scottsdale Municipal Property      203,588    41,913    15,178
 Corporation
Columbus Multi-School Building              57,291     1,653     3,316
 Corporation
Connecticare                                60,906   190,645   187,197
County of Riverside Asset Leasing          580,280    34,651    29,879
 Corporation
CSDA Finance Corporation                   274,390    19,787    19,730
Delta Dental Plan of Michigan, Inc.        148,660   401,729   399,206
Delta Dental Plan of New Jersey, Inc.       67,113   130,564   122,605
Disabled American Veterans                 144,832    70,995    68,854
Firemen's Association of the State of       66,710     9,549     5,610
 New York
Firemens Relief Associations of             52,968     3,403     1,419
 Minnesota
Group Health Association                    82,704   251,817   248,624
Henry Ford Health Care Corporation          55,565    23,345    21,712
 Liability Fund
Higher Education Assistance Foundation     216,210   172,588    62,703
Higher Education Loan Program of Kansas,   235,523    14,972    10,969
 Inc.
Independent Health Association, Inc.        83,935   252,288   244,398
International Olympic Committee            127,121    18,122    22,696
JADER Trust                                101,133     6,194     4,060
Luso-American Development Foundation       130,327    24,890    15,188
Marine Spill Response Corporation          264,818    84,610    72,888
Medcenters Health Care, Inc.               102,899   352,189   349,834
Merrillville Multi-School Building         117,269     3,304     5,773
 Corporation
Midwest Foundation Independent             110,063   225,844   213,056
 Physicians Association
Minneapolis Fire Department Relief         165,395    15,777    11,714
 Association
Minneapolis Police Relief Association      264,282    41,230       967
Minnesota School Boards Association         67,554    42,090    42,056
 Insurance Trust
Mohawk Valley Physician's Health Plan       66,183   178,909   175,637
Municipal Improvement Corporation/Los       69,061   151,037   158,579
 Angeles
Mutual of America Life Insurance Company  5,521,94   746,637   718,746
                                                 0
National Rifle Association of America      111,019   101,781   139,022
New Albany-Floyd County School Building     57,932     1,242        51
 Corporation
Physicians Health Plan, Inc.                56,639   178,754   178,352
Regional Airports Improvement              489,656    38,936    38,936
 Corporation
Sisters of Providence Good Health Plan      58,863   117,663   111,068
 of Oregon
The Buffalo Enterprise Development          78,897     2,192     2,926
 Corporation
Trans-Alaska Pipeline Liability Fund       327,579    37,746    57,633
Tufts Associated Health Maintenance         88,902   311,821   300,897
 Organization
Washington Dental Service                   73,670   191,874   188,824

Labor and agricultural organizations
----------------------------------------------------------------------
AFL-CIO                                     77,991    69,037    61,736
Air Line Pilots Association                 97,057    82,143    69,723
Amalgamated Clothing and Textile Workers    25,273     3,589     2,053
 Union-Rochester Joint Board
American Federation of State, County and    26,862    77,326    74,497
 Municipal Employees
American Federation of Teachers, AFL-       51,073    69,280    63,279
 CIO
Atlantic Coast District ILA                 26,130     3,275     2,726
Bakery Confectionery and Tobacco Workers    24,178    11,875    12,056
 International
Carrier-ILA Container Freight Station       33,375    14,544     2,330
 Trust Fund
Dakota's Areawide IBEW-NECA Pension Fund    35,770     3,447     1,295
Directors Guild of America                  45,632    10,553     7,029
District Council 37 Benefits Fund Trust    147,285   155,707   138,853
Educational and Cultural Trust Fund of      30,534     1,766     6,926
 the Electrical Industry
Holstein-Friesian Association of America    27,845    16,166    16,866
International Brotherhood of Electrical     23,421     5,612     4,342
 Workers #5
International Brotherhood of Painters       36,924    24,445    23,483
 and Allied Trades
International Brotherhood of Teamsters     138,104    98,321   129,850
International Ladies Garment Workers        61,032    43,539    45,896
International Ladies Garment Workers       383,316    83,969    66,865
 Union
International Longshoremens                 39,479    10,635    10,684
International Union of Electronic           51,441    21,792    19,982
 Workers, AFL-CIO
International Union of Operating            85,802    36,854    23,522
 Engineers
International Union, UAW                  1,052,77   386,988   365,476
                                                 5
Joint Employment Committee                  23,606     1,923     1,009
Laborers International Union of North      151,957    52,223    82,546
 America
Local 32B-32J Service Employees             64,207    24,406    17,201
 International Union
Local One, Amalgamated Lithographers of     30,112     3,806    17,748
 America
Los Angeles County Fair Association         88,041    30,297    29,446
Major League Baseball Players              128,461    38,974     5,927
 Association
Michigan Education Association              23,529    41,881    43,198
National Education Association of US,      127,661   186,472   186,754
 Inc.
National League of Postmasters              26,533    33,892    91,700
New York City District Council 37,          31,216    26,166    24,654
 AFSCME, AFL-CIO
North Carolina Farm Bureau Federation,      22,491     6,425     4,321
 Inc.
Retail Wholesale and Department Store       40,690     6,779     2,380
 Union, Local 338
Retail Wholesale And Department Store       24,108     8,165     9,497
 Union
Screen Actors Guild, Inc.                   40,832    25,747    28,798
Seafarers Harry Lundeberg School of         40,183     9,371    15,426
 Seamanship
Service Employees International Union       45,325    57,935    55,026
UAW-Chrysler Skill Development And          55,368    50,248    28,835
 Training Program
United Brotherhood of Carpenters and       154,532    58,204    56,542
 Joiners of America
United Food And Commercial Workers         127,861   117,159   108,752
 International Union
United Mine Workers of America             127,765    37,887    26,077
United Paperworkers International Union     33,025    28,114    26,415
United States Letter Carriers Mutual        67,931    20,145    17,557
 Benefit Association
United Steelworkers of America             194,904   232,187   237,493
 International Union
United Transportation Union                 48,407    40,937    37,326

Business leagues
----------------------------------------------------------------------
Academy of Motion Picture Arts and          38,730    17,431    11,909
 Sciences
AIPSO                                       19,552    11,339    34,291
Air Transport Association of America        13,234    35,871    35,871
Alabama Insurance Guaranty Association      23,383    11,357    11,164
American Association of Nurse               10,786     8,906     7,496
 Anesthetists
American Association of Oral And            12,979     7,373     6,881
 Maxillofacial Surgeons
American Bankers Association                82,702    53,318    50,732
American Bar Association                   117,925    95,142    88,439
American Board of Family Practice           11,713     5,993     5,334
American Board of Obstetrics and             9,600     3,508     3,046
 Gynecology, Inc.
American Board of Psychiatry and            10,187     5,708     4,055
 Neurology
American College of Emergency Physicians    10,135    13,580    13,506
American Dental Association                 52,635    43,240    46,023
American Gas Association                    24,817    59,383    59,148
American Hardware Manufacturing             17,846     7,771     6,451
 Association
American Health Care Association            10,707    10,709    10,373
American Health Information Management      17,447     8,243     9,304
 Association
American Hospital Association               83,379    85,474    85,088
American Institute of Architects            44,446    31,396    34,988
American Institute of Certified Public      71,502   120,200   117,745
 Accountants
American Insurance Association Inc.         10,785    22,607    23,595
American Medical Association               215,144   170,186   174,571
American Nurses Association                 11,798    21,375    19,132
American Petroleum Institute                40,790    69,510    70,728
American Pharmaceutical Association          9,291     9,956     9,954
American Physical Therapy Association       16,447    17,017    16,484
American Plywood Association                 9,315    13,757    13,464
American Public Transit Association         14,225     9,325     9,142
American Society of Association             12,013    15,752    15,595
 Executives
American Society of Hospital Pharmacists    29,375    24,837    23,021
American Speech-Language-Hearing            26,872    16,330    16,088
 Association
American Trucking Association, Inc.         21,192    27,482    27,018
American Veterinary Medical Association     15,263    13,122    12,885
Americus-Sumpter Payroll Development         9,644     1,993       771
 Authority
AMT -The Association for Manufacturing      19,372    17,879    17,065
 Technology
Arkansas Capital Corporation                16,976     1,303     1,079
Association for Information And Image       14,571     9,992     7,873
 Management
Association of American Railroads           41,007    93,240    83,106
ATP Tour, Inc.                              24,922    42,759    42,350
Attorney Registration and Disciplinary      13,495     7,216     5,842
 Commission of the Supreme Court of
 Illinois
Audio Digest Foundation                     17,997     8,201     7,753
Bank Administration Institute               14,620     4,358     4,385
Baseball Office of the Commissioner         18,651    15,636    14,636
Breeders' Cup Limited                       31,510    30,041    24,973
Cable Television Labs, Inc.                 19,305    11,176    10,046
California Association of Hospitals and     16,939    12,353    12,572
 Health Systems
California Association of Realtors          12,541    15,961    15,808
California Dental Association               70,445    16,881    10,617
California League of Savings                12,974     2,650     2,776
 Institutions
California Medical Association, Inc.        10,319    16,154    16,891
Career College Association                   6,812    10,337    10,792
Central Minnesota Development Company       13,290     1,110     1,087
Chamber of Commerce of the USA              40,916    67,474    80,186
Chemical Industry Institute of              20,924    15,454    15,489
 Toxicology
Chemical Specialties Manufacturers           9,383     3,811     3,519
 Association
Chicago Bar Association                     16,590     7,526     7,246
Connecticut Insurance Guaranty              55,187    10,636    23,394
 Association
Construction Industry Manufacturing         15,519     8,513     3,425
 Association
Cosmetic Toiletry And Fragrance             12,611     8,498     8,396
 Association
Credit Union National Association, Inc.     12,837    24,028    22,875
Delaware Insurance Guaranty Association     13,921     8,348     3,063
Edison Electric Institute                   46,546    61,299    59,154
Electronic Industries Association           47,914    41,440    34,668
Empire State Electric Energy                32,443     2,500     2,625
Florida Insurance Guaranty Association,     45,203   147,783   221,720
 Inc.
Florida Self Insurers Guaranty             Unknown     6,552     7,397
 Association, Inc.
Food Marketing Institute                    34,241    34,347    33,354
Georgia Insurers Insolvency Pool            18,308     1,511     5,743
Greater Erie Industrial Development         14,271     1,079       365
 Corporation
Greater Seattle Chamber of Commerce         10,117     7,746     7,764
Health Insurance Association of America     17,963    27,355    32,675
Illinois Hospital Association               16,859    10,769    10,077
Illinois Insurance Exchange Guaranty        18,459     1,686         2
 Fund, Inc.
Illinois Insurance Guaranty Fund            47,792    23,896    18,887
Independent Bankers Association of          11,376     8,652     8,024
 America
Independent Insurance Agents of America     14,324    11,105     9,289
Indiana Life and Health Insurance           43,640    33,291    36,670
 Guaranty Association
Institute of Electrical And Electronics    109,639   110,474   107,237
 Engineers
International Council of Shopping           17,639    18,789    17,285
 Centers, Inc.
Investment Company Institute                14,518    23,255    22,372
Louisiana Insurance Guaranty Association    28,805    70,760    75,814
Maine Insurance Guaranty Association        15,126    14,039    14,650
Marine Preservation Association             25,660   104,117    85,902
Massachusetts Insurers Insolvency Fund      56,289    33,155    23,782
Massachusetts Medical Society               60,218    55,584    53,005
Medical and Chirurgical Faculty of          15,198     4,387     3,791
 Maryland
Medical Society of the State of New York    11,369     8,102     8,533
Michigan Automobile Insurance Placement    312,544   242,643   239,053
 Facility
Michigan Basic Property Insurance           52,602    94,813    76,990
 Association
Michigan Credit Union League                17,564     5,557     5,180
Michigan Life And Health Insurance           9,289     9,474     7,728
 Guaranty Association
Michigan Property And Casualty Guaranty     30,056     9,560    15,067
 Association
Million Dollar Round Table of the           13,528     8,473     7,755
 National Association of Life
 Underwriters
Minnesota Insurance Guaranty Association    40,073    24,099    25,490
Minnesota Life and Health Insurance         25,524     5,053    14,094
 Guaranty Association
Minnesota Workers Compensation Insurers     46,595     7,138     3,337
 Association, Inc.
Mississippi Insurance Guaranty              15,020     5,172     3,945
 Association
Mississippi Life And Health Insurance       13,736     3,349     3,341
 Guaranty Association
Missouri Joint Underwriting Association     11,197     7,779     8,808
Motion Picture Association of America       20,393    29,322    27,860
Motor Vehicle Accident Indemnification      54,770    34,706    33,023
 Corporation
NASDAQ, Inc.                                79,045    62,313    46,554
National Academy of Recording Arts and      19,745    15,769    11,734
 Sciences, Inc.
National Association of Chain Drug          12,636    14,460    13,549
 Stores
National Association of Convenience          9,596     7,818     6,961
 Stores
National Association of Music Merchants,    15,057     5,889     4,733
 Inc.
National Association of Printers And        17,254     3,305     3,253
 Lithographers
National Association of Professional        24,617     5,512     5,397
 Insurance Agents
National Association of Realtors            51,529    48,611    57,469
National Association of Securities         286,251   161,972   144,034
 Dealers, Inc.
National Automobile Dealers Association     42,173    23,468    18,774
National Cargo Bureau                        9,874     8,971     7,989
National Council on Compensation            48,693   100,215    98,890
 Insurance
National Electrical Manufacturers            9,282    11,760    11,495
 Association
National Federation of Independent          30,553    63,160    61,917
 Business, Inc.
National Food Processors Association        29,228    17,481    16,557
National Hot Rod Association                23,375    44,120    41,377
National Institute for Automotive           11,500    10,933     8,300
 Service Excellence
National Live Stock and Meat Board          13,623    53,977    52,773
National Rural Electric Cooperative         39,192    54,625    53,857
National Soft Drink Association             12,230    10,298     7,033
National Solid Wastes Management            11,110    14,938    14,001
 Association
National Telephone Cooperative              14,940     7,600     7,075
 Association
National Wholesale Druggists'               11,212     7,372     6,870
 Association
New Hampshire Automobile Reinsurance        79,042    32,113     1,924
 Facility
New Hampshire Insurance Guaranty            14,087     8,292     4,796
 Association
New Jersey Hospital Association             43,160     7,329     6,889
New Jersey Property Liability Insurance     34,462   174,652     8,618
 Guaranty Association
New Jersey Surplus Lines Insurance          34,816    26,043     1,579
 Guaranty Fund
New Mexico Property and Casualty             9,548    10,343     6,902
 Insurance Guaranty Association
New York Shipping Association, Inc.         51,823   181,265    83,085
New York State Bar Association              11,784    13,167    12,287
Newspaper Association of America            26,263    32,225    32,786
North Carolina Insurance Guaranty           17,056     9,042    10,145
 Association
North Carolina Life and Health Guaranty     33,999    48,129    23,419
 Association
North Dakota Insurance Guaranty              1,724       137       212
 Association
Northern California Golf Association        11,087     3,478     2,992
Ohio Education Association                  11,429    28,297    28,291
Ohio Insurance Guarantee Association        57,319    13,211    10,398
Ohio Life And Health Insurance Guaranty     92,509    43,250     8,993
 Association
Ohio State Bar Association                  11,762     5,734     5,065
Oklahoma Property and Casualty Insurance    20,665    10,627     5,615
 Guaranty Association
Open Software Foundation                    27,876    61,860    61,860
Packaging Machinery Manufacturers           11,710     9,051     8,100
 Institute
Pennsylvania Chamber of Business and         9,639     3,508     3,087
 Industry
Pennsylvania Insurance Guaranty            128,763    11,282    14,103
 Association
Pennsylvania Life and Health Insurance      45,503    69,883    71,326
 Guaranty Association
Pennsylvania Medical Society                23,816     8,634     8,453
Pennsylvania Professional Liability         58,275     8,852     3,727
 Joint Underwriters
Pennsylvania State Education Association    22,988    30,829    31,033
PGA Tour, Inc.                             199,157   174,111   171,341
Portland Cement Association                 13,745    10,486    13,439
Printing Industries of America, Inc.         9,711     8,954     9,576
Public Securities Association               11,124    13,310    12,297
Realtors National Marketing Institute of     9,958     7,043     7,546
 the National Association of Realtors
Regional IDC of Southwestern               111,673    18,241    19,231
 Pennsylvania
Retail Merchants Association of Greater     26,024     2,233     2,287
 Richmond
Rhode Island Automobile Insurance Plan      15,638     3,768     3,372
Rhode Island Insurers Insolvency Fund       14,785    19,882    14,680
Savings And Community Bankers of America    28,290    22,394    24,377
Savings Banks Life Insurance Fund           17,592    10,858    10,367
Securities Investor Protection             734,867    73,450    16,850
 Corporation
Self Insurers Security Fund                 21,465     6,589     5,078
Semiconductor Equipment and Materials       15,222    17,349    16,457
 International
Semiconductor Research Corporation          10,491    35,028    35,620
Sheet Metal and Air Conditioning             9,492     5,437     6,048
 Contractors' National Association
Snake River Power, Inc.                     14,485     1,333     1,330
Society for Human Resource Management       14,404    15,433    14,848
South Carolina Property and Casualty         9,705     4,001     3,264
 Insurance Guaranty Association
State Medical Society of Wisconsin          10,288     4,633     4,542
Tennessee Insurance Guaranty Association    13,354     1,845     1,620
Texas Life Accident Health and Hospital     63,062    75,747    27,989
 Service Insurance Guaranty Association
Texas Medical Association                   28,721    12,601    12,286
Texas Property And Casualty Insurance       91,068   120,515    97,641
 Guaranty Association
Textile Hall Corporation                    21,350     4,539     2,042
The American Society of                     21,889    13,922    11,318
 Anesthesiologists
The Association of Trial Lawyers of         13,235    15,144    16,531
 America
The Council for Tobacco Research-USA,       15,111    25,666    25,491
 Inc.
The Economic Development Partnership of     28,497    14,829     3,599
 Alabama
The Hospital Association of Pennsylvania   194,846     7,200     7,695
The Medical Society of the District of       9,990     2,153     2,033
 Columbia
The National Association of Life            13,135    18,466    22,341
 Underwriters
The Professional Golfers' Association of    44,090    32,647    29,902
 America
The Society of the Plastics Industry,       28,419    77,212    76,310
 Inc.
Uniform Code Council, Inc.                  49,007    10,372     4,636
United States Tennis Association, Inc.      74,862    82,235    90,747
University Research Park, Inc.              14,953     1,815     1,281
Virginia Property And Casualty Insurance    13,579     2,109     6,997
 Guaranty Association
WACO Industrial Foundation                  12,149       209       275
Wisconsin Insurance Security Fund           13,870    14,602    11,062
Wisconsin Workers Compensation Insurance   224,116   125,086   103,487
 Pool
York County Industrial Development         226,400       483       446
 Authority
York County Industrial Development          15,728     1,045       996
 Corporation
----------------------------------------------------------------------
Source:  GAO analysis of IRS data. 


CATEGORY AND TYPE OF TAX-EXEMPT
ORGANIZATIONS UNDER IRC SECTION
501(C)
========================================================== Appendix IV

Section 501 (c)
category            Types of tax-exempt organizations
------------------  --------------------------------------------------
(1)                 Corporations organized under an act of Congress
                    and operated as an instrumentality of the United
                    States, for example, Federal Deposit Insurance
                    Corporation.

(2)                 Title holding corporations organized to hold title
                    to property of a tax-exempt organization, collect
                    the income, and deliver the net proceeds to the
                    exempt organization.

(3)                 Entities organized and operated exclusively for
                    religious and charitable, scientific, testing for
                    public safety, literacy, or educational purposes,
                    or for the prevention of cruelty to children or
                    animals, or to foster amateur sports.

(4)                 Civic leagues or organizations operated
                    exclusively for the promotion of social welfare or
                    local associations of employees (earnings devoted
                    to charitable, educational, or recreational
                    purposes).

(5)                 Labor, agricultural, and horticultural
                    organizations organized to provide education and
                    instruction on improving working conditions and
                    products.

(6)                 Business leagues, chambers of commerce, real
                    estate boards, and professional football leagues
                    organized to improve business conditions.

(7)                 Clubs organized for pleasure and recreational
                    purposes.

(8)                 Fraternal beneficiary societies and associations
                    organized to provide for the payment of life,
                    sickness, accident or other benefits to members
                    and operated under a framework of self-governing
                    branches chartered by a parent organization.

(9)                 Voluntary employee beneficiary association
                    providing for payment of life, sickness, accident
                    or other benefits to members of the association.

(10)                Domestic fraternal societies and associations
                    operated exclusively for social, educational,
                    religious, scientific, charitable, and fraternal
                    purposes under a framework of self-governing
                    branches chartered by a parent organization.

(11)                Teachers' retirement fund associations organized
                    on a local basis.

(12)                Benevolent life insurance associations; mutual
                    companies, such as electric, irrigation, and
                    cooperative companies organized on a local basis.

(13)                Cemetery companies owned and operated for the
                    benefit of their members and not operated for
                    profit.

(14)                Nonprofit credit unions and mutual reserve funds
                    providing loans to members and reserve funds for
                    domestic building and loan associations,
                    cooperative banks and mutual savings banks,
                    (mutuals must have been organized before 9/1/57).

(15)                Mutual insurance companies or associations, with
                    net premiums not more than $350,000 providing
                    insurance to members (other than life companies).

(16)                Cooperative organizations established to finance
                    crop operations.

(17)                A trust or trusts providing for the payment of
                    supplemental unemployment benefits.

(18)                A trust providing for the payment of benefits
                    under a pension plan funded by employees, created
                    prior to 6/25/59.

(19)                A post or organization promoting the welfare of
                    past or present members of the Armed Forces.

(20)                An organization or trust providing legal services
                    as part of a qualified group legal services plan.

(21)                A trust or trusts organized to meet black lung
                    disability and liability claims.

(22)                Pension plan withdrawal liability trust created to
                    provide funds to meet payments under section
                    4223(c) or (h) of the Employee Retirement Income
                    Security Act of 1974.

(23)                Veterans' insurance associations created to
                    provide insurance and other benefits to member
                    veterans.

(24)                Trusts described in section 4049 of the Employee
                    Retirement Income Security Act of 1974.

(25)                Title-holding companies with 35 or fewer entities
                    exempt under IRC section 401 and 501(c)(3) and
                    governmental units.
----------------------------------------------------------------------
Source:  IRC. 


MAJOR CONTRIBUTORS TO THIS
BRIEFING REPORT
=========================================================== Appendix V

GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C. 

Michael Brostek, Assistant Director
Mary Phillips, Assignment Manager
Robert McKay, Evaluator-in-Charge
Bryon Gordon, Evaluator
Pat McGuire, Senior Computer Specialist
Susan Baker, Computer Specialist
Katherine M.  Wheeler, Publishing Advisor
Hazel Bailey, Writer-Editor
Rosa Hayes, Secretary

*** End of document. ***