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The Tax-Exempt Status of AARP

Kathryn Simms, Jeffry M. Netter
January 1, 2013
North America
Strategy & General Management, Accounting & Finance
13 pages
Tax-exempt status, nonprofit organizations, 501(c)(3) organizations, 501(c)(4) organizations, lobbying
Student Price: 
$4.00 (€3.82)
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“The Tax-exempt Status of AARP” is a descriptive case study. It covers the aftermath of the issuance of Behind the Veil: The AARP America Doesn’t Know, a 40-page Investigative Report released by Wally Herger (Representative, California) and Dave Reichert (Representative, Washington). This report voiced concerns about AARP’s lobbying practices, royalty income, transparency, CEO compensation structure, and a variety of similar concerns. As a result, the press, American public, and rival political parties engaged in an intense debate over whether AARP was a legitimate tax-exempt organization or a colossal for-profit enterprise. Students are provided an opportunity to analyze the merits of arguments made by each side.

Learning Outcomes: 
  1. Describe and interpret the key concepts and terms in the case study as they relate to AARP. (Question 1) (Bloom’s Taxonomy Levels 1 & 2: Knowledge and Comprehension).
  2. Examine the accuracy of specific statements by cross-referencing information reported by third parties to source document (Question 2) (Bloom’s Taxonomy Level 3: Application).
  3. Apply the concepts of tax-exempt status to other situations (Question 3) (Bloom’s Taxonomy Level 3: Application).
  4. Estimate the value of AARP’s tax-exempt status (Question 4) (Bloom’s Taxonomy Levels 4-5: Analysis, Synthesis, and Evaluation).
  5. Compare AARP’s circumstances with theoretical arguments for tax-exempt status (Question 5) (Bloom’s Taxonomy Levels 4-5: Analysis, Synthesis, and Evaluation).
  6. Evaluate arguments made by AARP’s proponents and opponents about the validity of AARP’s tax-exempt status (Questions 6-8) (Bloom’s Taxonomy Levels 4-5: Analysis, Synthesis, and Evaluation).