Venable partner George Constantine was quoted in a March 23 Association Trends article discussing the Internal Revenue Service's increased oversight of executive compensation in 501(c)6 associations.
Constantine noted that large nonprofits often hire compensation consultants to create analyses that support the executive compensation levels they pay out, while smaller nonprofits rely on salary surveys.
He said that one of the key components the IRS is looking for is valid comparability data when associations use salary surveys. Constantine added that the worst case scenario of a c(6) association running afoul of IRS regulations is revocation of exempt status, however he sais the IRS "probably would have to see something egregious" for that to happen.
Constantine noted that large nonprofits often hire compensation consultants to create analyses that support the executive compensation levels they pay out, while smaller nonprofits rely on salary surveys.
He said that one of the key components the IRS is looking for is valid comparability data when associations use salary surveys. Constantine added that the worst case scenario of a c(6) association running afoul of IRS regulations is revocation of exempt status, however he sais the IRS "probably would have to see something egregious" for that to happen.