The IRS and NHRA, you gotta see this.

[Julie Jordan]

Originally Posted by Greg Hill

Julie the 501-C6 IRS rules say that you cannot operate like a for profit business. Non profits are held to completely different standards than for profits. I suggest you go on the IRS site and read the rules for a 501-C6. Also take a look at the complaint that was filed by Marcus Owens,who for 10 years was the director of the non profit division of the IRS. According to Senator Chuck Grassely's office bogus non profits cost the Federal government over 90 billion dollars per year.

Greg ~ I guess you and I aren't thinking the same thing when you state "operate like a for-profit". There are things that 501(c)(6) organizations are not allowed to do. These include ownership (inurement) by individuals or entities, not engaging in any regular business typically carried on by for-profits. They typically exist to promote the advancement of a particular trade or community. Whether the sanctioning and promoting of drag racing meets this test is not for me to decide. The NFL is a 501(c)(6) so I'm not sure that isn't much different than what NHRA does.
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However, when I think "operate like a for-profit", I'm thinking the paying of bills, receipt of money, managment decisions to make the organization more profitable, salaries, capital asset acquisitions, etc. All of which a tax exempt organization does the same as a normal business.

"Bogus" non profits cost the Federal government money...tax dollars. So, assuming this letter triggers an investigation and NHRA loses its tax exempt status then it would become a tax paying entity. Like someone said before, taxes are an expense of the organization and would surely not be absorbed but would be passed along in further fee increases.