The Case Against Income Tax Exemption for Nonprofits

Authors

Michael Fricke

Document Type

Article

Abstract

(Excerpt)

In order to discuss the current state of affairs in the nonprofit world, Part I of this Article addresses how nonprofits are treated under the law and the various income tax exemption defenses that have been proffered over the years. Then, Part II investigates the problems raised by organizations that take advantage of their tax exemption, but decline to use their revenue for their exempt purposes. This problem has been addressed infrequently in academic literature, but Part III reviews other proposed reforms that might affect this issue. Part IV lays out the proposed solution, and Part V examines the challenges and potential objections to these reforms.