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Advocacy Blog
Wednesday, May 14, 2008
Federal Trade Commission Seeks Authority Over 501(c)(3) Groups
The Federal Trade Commission (FTC)'s authority could soon extend to regulate nonprofits. Senators Daniel Inouye (D-HI) and Byron Dorgan (D-ND) have introduced S.2831, the FTC Reauthorization Act of 2008. A Senate Commerce, Science, and Transportation Committee press release states the bill "expands the Commission's authority to regulate non-profits for unfair or deceptive acts or practices. Currently, some non-profits have used their tax-exempt status as a shield to block FTC enforcement action." The FTC proposal would expand the definition of "corporation" to include tax code Section 501(c)(3) and 501(c)(4) organizations.
BNA Money and Politics ($$) reports that Morey Ward, of counsel with Morgan Lewis & Bockius, said during a session on exempt organizations at the American Bar Association Section of Taxation meeting that "Under the current Federal Trade Commission Authorization Act, the definition of 'corporation' is not perfectly clear,' Ward said. 'They have been effective in going after charities in some limited instances but feel that they are hampered, and have been up on the Hill testifying that they really need to get into the areas of fraudulent charities, certainly, but possibly inefficient charities as well."
Posted by Amanda Adams
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