The Compliance Costs of Maintaining Tax Exempt Status

Marsha Blumenthal and Laura Kalambokidis

National Tax Journal, 2006, vol. 59, issue 2, 235-52

Abstract: Under U.S. federal and state tax laws, qualifying non–profit organizations receive several kinds of tax benefits. However, the benefits come with compliance costs, as eligible organizations must first apply for them and then file the annual reports necessary to maintain them. We use a national survey to measure the latter, estimating them at $3.2 billion for 2000. Additional results are: (1) evidence of scale economies; (2) choosing to file the federal Form 990 (over the shorter Form 990–EZ) raises expenditures on professional advisors; and (3) using a consolidated reporting form or electronic filing reduces state costs.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:59:y:2006:i:2:p:235-52

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