The Tax-Exempt Status of AARP

Authors
Kathryn Simms, Jeffry M. Netter
Region
North America
Topic
Strategy & General Management
Accounting & Finance
Length
13 pages
Keywords
Tax-exempt status
nonprofit organizations
501(c)(3) organizations
501(c)(4) organizations
lobbying
Copyright Holder
Business Case Journal
Student Price
$4.00
Target Audience
Graduate Students
Undergraduate Students
Executive Education

“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).