Comment by s1artibartfast
4 days ago
>The price being so outrageously high does also call into question whether their charitable endowments could reasonably be characterized as part of a tax avoidance scam.
I dont see how that follows at all. They spend more on students than they receive in tuition funds. Who would they be scamming? What if they offered a million dollar education? I still dont see how that would impact their non-profit status.
If they offered a million dollar education, I'd say the IRS should heavily scrutinize their budget, and if they did manage to stay within the letter of the law, it's likely that the law should be fixed because holistically, it's unlikely that they're truly spending over 20x what comparable universities do on educating students.
What laws are you worried about specifically? You could run a non-profit giving million dollar spa days.
You can't run a 501(c)(3) giving million dollar spa days though. If you're actually running e.g. a 501(c)(7) social club, then your investment income is taxable, and there are limits on unrelated business activities. If you're an educational nonprofit and your purported spending on education is wildly out of line with what it costs elsewhere, that should raise eyebrows as to whether that money is being spent on education.
1 reply →