AARP’s Non-Profit Tax Status Questioned

Last week wasAARPS Tax Status a particularly rough one for AARP, the organisation that dedicates itself to improving the quality of life for people aged 50 and over.  Originally established as a small organisation that went by the name the Association for the Advancement of Retired Persons, AARP has now morphed into a billion dollar organisation with over 37 million members.

US Representative Charles Boustany, the chairman of the subcommittee on oversight of the U.S. House Ways and Means Committee that’s in charge of tax laws questioned the non-profit, and therefore tax-exempt, status of the 53 year old organisation.  The issue was raised as Republicans point out that the AARP made over 60% of its $1.09 billion in revenue from royalties it gets from endorsing products such as insurance and other products aimed at older Americans, both members and non-members.  Membership fees in AARP are only $16 per year.

While many non-profits have suffered and closed their doors over the past several years, AARP has thrived and grown even as the economy suffered.  It has made so much money that it even sponsors it’s own NASCAR racing team and spent over $22 million dollars on lobbying lawmakers across the country.

The U.S. House Republican subcommittee issued a scathing report entitled “Behind the Veil: The AARP America Doesn’t Know” last week.  Some political analysts are saying this is due to AARP’s endorsement of the new health bill overhaul passed last year.  Critics point out that the AARP stands to become even more profitable from selling insurance if the health bill is fully implemented.

This is tricky political ground for both parties because the majority of AARP members vote Republican even though the organisation endorsed President Obama’s Health Care bill.