Thursday, February 24, 2005

Those Beautiful 990's

If you have the patience to read them, IRS 990 tax returns of not-for-profit organizations can provide some eye-popping information. For me they usually generate more questions than answers, as was the case this evening when I briefly scanned the 2001, 2002, and 2003 returns of United Seniors Association (USA) (See EIN# 54-1590915. You must register for free to download the documents).

Their 2001 990 indicates they had assets and a 2001 loss arising from a "subsidiary" for-profit company. Statement 12 says that in 2001, USA owned "80% interest in O'Neill Marketing", a taxable subsidiary. This asset was valued at $658,836 and the company produced red ink of ($45,582).

So my first question is, what was wrong with the management of O'Neill Marketing to cause it to produce a net loss, which had to be absorbed by USA, a not-for-profit organization?

Now check out the 2002 tax return of USA. They report the "sale of 80% interest of O'Neill Marketing for the price of $150,000." Yes, you read that right. Heck of a deal, eh? Miraculously, a company that was worth more than $650,000 in 2001 can now only be sold for $150,000. Now there must be some CPA or tax attorney out there that can explain that to us?

Questions abound. Do your own digging.
990's are exciting and beautiful.


At 8:55 AM, Blogger Rita O'Neill said...

Don't dig, come out and ask.
I defy any direct marketing list company to not show a significant loss in 2001, 2002. Uh, remember the dot com failure, anthrax and overall crappy economy? Often marketing budgets go first. Additionally OMC works on a 20% margin (commissioned based) so sales and net are nothing close. I wish I made $600K.

I hate to disappoint but as you can tell by the unfortunate bloggers who made it through snow yesterday to verify, I moved to offices in an Executive Suite when they had space available and have done so for months. I have sublet in Fairfax which makes a lot of sense since I live in Fairfax. Guys, I'm a mailing list broker. Period. If you do direct mail, fell free to call. BTW I am not related to John O'Neill, Tip O'Neill, Paul O'Neill, Eugene O’Neill or even Shaq O'Neal.


Post a Comment

<< Home