Tuesday, April 4, 2000

College Groups Blast Tax Proposal That They Fear Would Cause Deluge of Paperwork

By SARA HEBEL

Several college and university groups are voicing concerns that recent Congressional recommendations for new financial
reporting requirements for nonprofit organizations would impose costly, useless paperwork burdens on higher-education
institutions and limit public-policy research.

More than a dozen higher-education organizations and individual campuses signed a letter that is being sent early this week to
Rep. Bill Archer, the Texas Republican who serves as chairman of the House of Representatives Ways and Means Committee.
The document -- written by Independent Sector, a coalition of nonprofit groups -- urges Mr. Archer to review the
organizations' 23-page critique, which takes issue with many of the recommendations the Joint Committee on Taxation made in
January, and to hold a public hearing.

One proposal in particular could hamper several campus publications, including academic journals and law reviews, officials of
colleges and nonprofit organizations argued. That joint-committee recommendation would require all public charities --
including nonprofit colleges and universities -- to track and report expenses involved in preparing and distributing any
nonpartisan study, analysis, or research that contains any "limited call to action," defined broadly as work that specifically
identifies at least one lawmaker and that person's views or involvement in legislation.

"This could become a huge problem for colleges and universities," said Karin L. Johns, director of tax policy for the National
Association of Independent Colleges and Universities, a group that has signed the letter to Mr. Archer.

Under the tax committee's recommendation, a college or university would have to report on the costs of work done by every
professor who publishes any article or study that mentions any bill, a view on the bill, or general information about legislators
who are working on a bill, Independent Sector officials said.

"To determine the amount of the institution's expenditures on that particular article -- when funding for faculty work is often
provided from multiple sources -- would be complex to the point of impossibility," Independent Sector said in comments the
group submitted to the joint-tax panel.

Another recommendation that worries higher-education officials would require nonprofit groups to disclose the tax returns they
file for the income they receive from business activities that are unrelated to their tax-exempt mission. Nonprofit organizations
must pay taxes on that income, but neither they nor for-profit businesses now must make those tax returns public. Forcing only
nonprofit groups, including colleges and universities, to disclose that information "would be thoroughly unfair," Independent
Sector argues.

In releasing its recommendations, the Joint Tax Committee argues that requiring tax-exempt organizations to publicly disclose
more financial information would allow the public to provide oversight of the organizations and their activities. It also would
make the organizations more efficient and would help people decide whether the groups should be supported, committee
members said.

Provisions included in the Internal Revenue Service Reform and Restructuring Act of 1998 required the joint committee and the
Treasury Department to conduct separate studies on the disclosure of federal tax returns, including those related to tax-exempt
organizations.

Higher-education and other nonprofit group officials said they do support some of the committee's proposals, such as
accelerating electronic filing for tax-exempt organizations and redesigning some tax forms to make them easier to understand.

Matthew W. Hamill, vice president for public policy at Independent Sector, said that no member of Congress has yet
developed legislation -- which would have to be approved by the House and the Senate, and then signed by the president -- to
enact the joint committee's full list of recommendations into law. He added that that may be unlikely to happen this year, but
noted that joint-committee staff members favor enacting many of the recommendations in their present form.

Copyright 2000, The Chronicle of Higher Education. Reprinted with
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