It has been several years since any changes have been made to the IRS form 990; however, 2008 marked the first year in nearly thirty significant changes have been made to the tax form. The form 990 is presented by tax-exempt organizations as a way to supply the public with financial information and to make sure these organizations are not exploiting their exempt tax status. The new form 990 requires tax-exempt organizations to report any administrator’s salaries that are in excess of $150,000 in the interest of transparency, consistency, and full disclosure. One organization that many are familiar with, the National Football League, feels they should not have to report this information to the public because it is unimportant.
For the past several years the only salary the NFL has submitted on the 990 has been Commissioner Roger Goodells which has been in the area of $10 million annually. With the new rule in tact the NFL would have to report approximately an additional 25 salaries. The NFL, a trade association, has gone as far as contacting the American Society of Association Executives in an attempt to establish a bill that would excuse the NFL and other similar organizations from this requirement.
Many people wonder why the National Football League feels they should be exempt from this IRS form 990 requirement. The NFL makes a case that instead of being a charity that gets donations from the public, they are financed by the teams of the league; therefore, making them a trade association. The NFL does reap huge benefits from its label as a tax-exempt organization because they can market bonds at a lower rate to teams for making stadium renovations. The members of each team are allowed to ask for salary information of NFL executives at any time they please; however, the NFL believes that is where it should stop. Some people that have been following the situation feel the National Football League may have some concern about employees being upset if they learn what their fellow employees are earning in comparison to them. Some also believe the NFL may have some worry that people that have never seen these league officer salaries may become disappointed with the league.
The reasons the Internal Revenue Service have made this change is so the have the opportunity to look for excessive salaries and possibly insider dealing. With the National Football League having to disclose executive salaries, it would keep everyone honest. If somehow Congress would waive the NFL from the form 990 requirement, there would be many other tax-exempt groups seeking the same exemption from the rules the NFL has gained. Ultimately this could defeat the sole purpose the IRS seeks in transparency, consistency, and full disclosure.
With the NFL having the desire to continue its tax-exempt status it currently has but the lack of desire to apply to the new form 990, the National Football League has some decisions to be made. They could comply with the new rules and release the additional executive’s salaries to the public. Like many other organizations have done, including professional sports such as Major League Baseball, the NFL could switch to a for-profit organization and not have to worry about disclosures; however, losing there exempt status. This is a situation many should keep their eye on because if Congress would yield to the NFL’s request things could get rowdy for any tax-exempt organization seeking the same benefits of the NFL. I suggest watching to see what final decision is made.