Court Says Teachers Union Owes $1.1 Million for Magazines

By Andrew Zajac/Bloomberg Businessweek

A portion of National Education Association members’ dues count as circulation income for the union’s magazine, creating a $1.1 million tax bill for the group, the U.S. Tax Court ruled.

The court said in the ruling today that because NEA members had a “right to receive” the magazine, a share of member dues counted as circulation income.

That dues income wiped out a loss from circulation activity that was unavailable to offset taxable revenue from advertising in the magazine, NEA Today, according to the ruling.

As a result, the NEA owed tax of $319,094 for 2001, $444,554 for 2002 and $342,371 for 2003, according to Internal Revenue Service findings in June 2009 that led the teachers union to take its case to the tax court.

http://www.businessweek.com/news/2011-09-28/court-says-teachers-union-owes-1-1-million-for-magazines.html

Tagged as: IRS, National Education Association, union dues, US Tax Court