The opinion
NATIONAL EDUCATION ASSOCIATION OF THE UNITED STATES,
PETITIONER v. COMMISSIONER OF INTERNAL
REVENUE, RESPONDENT
Docket No. 22838–09. Filed September 28, 2011.
P is a tax-exempt labor organization described in I.R.C. sec.
501(c)(5). In its FYE Aug. 31, 2001, 2002, and 2003, P pub-
lished two magazines at an expense of about $7 million, and
it distributed those magazines to dues-paying members and to
a very few non-member paying subscribers. P’s literature and
that of its State and local affiliates stated that members
received the magazines as a benefit of membership and stated
an amount of dues that paid for the magazines. Members who
declined the magazines did not pay a smaller amount of dues.
P made most but not all of the content of the magazines avail-
100
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(100) NEA v. COMMISSIONER 101
able for free over the Internet to the general public. P pub-
lished paid advertising in the magazines, by which it earned
approximately $1 million in net profit each year. On its
returns P reported negligible circulation income, resulting in
a substantial claimed loss on its circulation activity. P used
that loss to fully offset its taxable advertising profit. There-
fore, P reported that it owed no unrelated business income tax
(UBIT). Held: Under 26 C.F.R. sec. 1.512(a)–1(f)(3)(iii), Income
Tax Regs., which requires an allocation of membership dues
to circulation income ‘‘[w]here the right to receive an exempt
organization periodical is associated with membership or
similar status in the organization’’, the ‘‘right to receive’’ must
be a legal right. Under this regulation, P was required to allo-
cate a portion of members’ dues to circulation income.
Miriam L. Fisher and Theodore J. Wu, for petitioner.
Robin W. Denick and Catherine R. Chastanet, for
respondent.
GUSTAFSON, Judge: Petitioner National Education Associa-
tion of the United States (‘‘NEA’’) is a labor organization
described in section 501(c)(5). 1 It is therefore generally
exempt from Federal income tax under section 501(a); but to
the extent it engages in income-generating activity unrelated
to its tax-exempt purposes, it is potentially liable under sec-
tions 511 through 513 for unrelated business income tax
(‘‘UBIT’’). NEA publishes magazines mainly for its members
(an activity ‘‘related’’ to its exempt purposes and not subject
to UBIT) and sells advertising in those magazines (an ‘‘unre-
lated’’ activity that is subject to UBIT). By a notice of defi-
ciency dated June 25, 2009, the Internal Revenue Service
(IRS) determined deficiencies in NEA’s UBIT in the following
amounts:
UBIT
TYE Aug. 31 deficiency
2001 ............................................................... $319,094
2002 ............................................................... 444,554
2003 ............................................................... 342,371
NEA brought this case pursuant to section 6213(a), asking
this Court to redetermine those deficiencies.
1 Section references are to the Internal Revenue Code of 1986 (26 U.S.C.), as in effect for the
relevant years at issue. Rule references are to the Tax Court Rules of Practice and Procedure.
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102 137 UNITED STATES TAX COURT REPORTS (100)
The issue for decision is whether NEA must allocate a por-
tion of its members’ dues to the circulation income of those
magazines. The parties agree that the outcome of this dis-
pute depends on whether, for purposes of 26 C.F.R. section
1.512(a)–1(f)(3)(iii), Income Tax Regs., membership in NEA
gave members ‘‘the right to receive’’ NEA periodicals. If the
members had a ‘‘right to receive’’ the magazines, then: (a) a
portion of the members’ dues was circulation income; (b) as
a result of that income, NEA did not have a loss from circula-
tion activity; (c) NEA’s income from advertising (an ‘‘unre-
lated’’ activity subject to UBIT) was therefore not offset by
any circulation losses; and (d) NEA owes tax on the adver-
tising income. NEA concedes that if the IRS prevails on this
issue, then the IRS’s computations are correct with respect to
the amounts of membership dues allocable to circulation
income for the years at issue.
For the reasons explained below, we find that membership
in NEA did give members ‘‘the right to receive’’ the NEA maga-
zines. Consequently, NEA must allocate a portion of its mem-
bers’ dues to circulation income.
FINDINGS OF FACT
The parties submitted this case fully stipulated pursuant
to Rule 122. The stipulation of facts filed November 26, 2010,
and the attached exhibits are incorporated herein by this ref-
erence. At the time that NEA filed its petition, NEA main-
tained its principal place of business in Washington, D.C.
NEA and its affiliates
NEA originated in 1857 as the National Teacher’s Associa-
tion. In 1906 a special act of Congress incorporated the entity
under its current name. NEA operates under a charter, a con-
stitution, bylaws, and standing rules; and its stated goals
include serving as a national voice for education, promoting
the health and welfare of children and/or students, and pro-
tecting the rights of educational employees and advancing
their interests and welfare.
NEA charters State and local affiliates that meet standards
set in NEA’s bylaws. The IRS recognizes both NEA and the
affiliates as exempt from tax under section 501(a) as section
501(c)(5) labor organizations. Individuals become members of
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(100) NEA v. COMMISSIONER 103
NEA only by becoming members of one of the State or local
affiliates. The affiliates are responsible for enrolling mem-
bers, collecting and remitting dues, and a variety of other
activities.
In the years at issue NEA had 54 main affiliates and more
than 21⁄2 million members (of whom more than 160,000 were
retired members). Each NEA member paid dues of $123 for
the 2000–2001 school year and slightly more in subsequent
years. NEA therefore received well over $300 million in dues
in each of the years at issue.
NEA’s magazines
NEA produced numerous books, pamphlets, booklets, and
other publications. Only two of NEA’s publications are perti-
nent here—NEA Today for active members and This Active
Life for retired members. (We refer to these two publications
collectively as the ‘‘magazines’’.) NEA began publishing NEA
Today in 1982 and This Active Life in 1999.
Since 1982 NEA has published NEA Today. In the years at
issue NEA published eight monthly issues of NEA Today over
the course of a school year. As the magazine explained to its
readers, its ‘‘press schedule * * * is set a year in advance’’.
Each issue consisted of 52 pages in a 10-inch by 14-inch
newspaper tabloid format. NEA distributed more than 2.4 mil-
lion printed copies per issue to dues-paying members by
mail. About 40,000 NEA members (i.e., less than two percent)
declined the subscription, but they did not receive a reduc-
tion in their dues for doing so. NEA did not actively promote
outside subscriptions and sold fewer than 200 hard copy
subscriptions to nonmembers. NEA distributed complimentary
copies to NEA employees, employees of NEA affiliates,
attendees at NEA hosted meetings, school officials, media rep-
resentatives, government officials, and members of the public
who requested individual issues.
The masthead on the inside of the cover of each NEA Today
issue included the following statements:
NEA Today is published eight times a year, monthly, in September,
October, November, January, February, March, April, and May by the
National Education Association * * *.
* * * * * * *
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104 137 UNITED STATES TAX COURT REPORTS (100)
NEA Today is mailed to all NEA members as a benefit of membership.
Nonmember subscription price: $45 institutional, $80 domestic and foreign.
For members, subscriptions represent $4 of annual dues.[2]
In the years at issue and thereafter, NEA also made articles
from NEA Today available free on the Internet to the general
public. The Internet version did not contain letters to the
editor and excluded the advertising. Despite the availability
of articles on the Internet, NEA continued to mail hard copies
of NEA Today to members, even to two members in the same
household.
Since 1999 NEA has published This Active Life. In the
years at issue NEA annually published six bi-monthly issues
of This Active Life in standard 8.5-inch by 11-inch magazine
format. NEA individually addressed and mailed This Active
Life to retired dues-paying members, with per-issue circula-
tions of 175,400, 195,516, and 215,633 for its fiscal years
ending August 31, 2001, 2002, and 2003. As with NEA Today,
recipients could decline the subscription to This Active Life,
though only a small percentage chose to do so. Members who
declined delivery did not receive a reduction in their mem-
bership dues. NEA did not make available hard copies of This
Active Life for purchase or as courtesy copies. As it did with
NEA Today, NEA made This Active Life available free on the
Internet to the general public.
The masthead on page three of each This Active Life issue
included the following statement:
This Active Life * * * is published bimonthly by the National Education
Association * * *. * * * Annual subscription price: $2.30 (included in
membership dues and available only as a part of membership).[3]
Advertising
NEA sells advertising space to help defray the expenses of
creating, producing, and mailing the magazines. As a result
of the advertising revenue, the net cost per member for a
year’s delivery of NEA Today was $4.10 in the years at issue.
One of the reasons that NEA sent separate issues of the
magazines to NEA members in the same household was to
2 The 2001 and 2002 editions listed $4 as the portion of annual dues paid for NEA Today;
the 2003 editions listed $4.25. The 2001 and 2002 editions listed $45 as the institutional sub-
scription price; the 2003 editions listed $55.
3 The portion of annual dues that was stated as paid for This Active Life was increased to
$2.35 in the March 2002 publication and to $2.40 in the September 2002 publication.
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(100) NEA v. COMMISSIONER 105
fulfill circulation volume commitments that NEA made in its
advertising contracts.
References in NEA documents to members’ receipt of maga-
zines
NEA’sgoverning documents contained statements related to
NEA publications, as follows:
Article IX, sections 2(b) and 3(b), of NEA’s constitution pro-
vided that, with respect to amending the NEA constitution
and bylaws, ‘‘The text of the proposed amendment shall be
printed in an official publication sent to all members at least
sixty (60) days prior to its consideration.’’
Section 2–3(c) of NEA’s bylaws provided that ‘‘[a]ll members
shall be eligible to receive * * * reports and publications of
the Association in accordance with the policies and proce-
dures of the Association.’’
NEA’s standing rule 9C, sections 1(b) and 2(b), required
that proposed amendments to NEA’s constitution and bylaws,
respectively, ‘‘shall be printed in an official publication sent
to all members at least sixty (60) days prior to its consider-
ation.’’ Standing rule 10D required further that, with respect
to candidates for executive office or membership on the
executive committee, ‘‘The Executive Director of NEA shall
publish in an NEA publication sent to Active members the
picture and candidate statement of each candidate’’.
The May 2001 and May 2002 issues of NEA Today both con-
tained: (1) one and one-third pages of proposed amendments
to NEA standing rules, constitution, and bylaws due for vote
at the respective upcoming representative assemblies; (2)
two-thirds of a page showing the picture and candidate state-
ment of individuals running for NEA executive offices or for
membership on the executive committee; and (3) the annual
secretary-treasurer’s report noted above.
The 2000–2001 NEA Handbook, in a section entitled Bene-
fits of Membership, stated that ‘‘NEA members receive a
variety of timely and informative periodicals, including NEA
Today, a tabloid newspaper’’.
Consistent with the language on the mastheads of the
magazines, the enrollment forms by which a person joined an
affiliate and thereby joined NEA include language to the
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106 137 UNITED STATES TAX COURT REPORTS (100)
effect that a portion of members’ dues pays for the maga-
zines. 4
NEA’s tax returns
To report its unrelated business taxable income (UBTI) from
the sale of advertising space in its magazines, NEA submitted
each year to the IRS a Form 990–T, Exempt Organization
Business Income Tax Return, prepared by its outside
accountants. The following table summarizes the figures that
NEA reported on the Forms 990–T:
FYE Aug. 31
2001 2002 2003
Advertising income:
Advertising and royalty revenue $2,904,990 $3,109,157 $3,453,075
Less direct advertising costs 2,055,802 1,838,023 2,473,046
Net advertising income 849,188 1,271,134 980,029
Circulation income:
Circulation revenue -0- 80,622 76,044
Less readership costs1 6,701,587 7,557,196 7,673,271
Excess exempt expenses (a.k.a. excess readership
costs) (limited to net advertising income) 849,188 1,271,134 980,029
Unrelated business taxable income:
Net profit from advertising (= advertising income
less excess readership costs) -0- -0- -0-
Less other allowable deductions = taxes, licenses,
and other 100 100 100
UBTI before net operating loss carryforward (100) (100) (100)
Net operating loss carryforward (339,385) (339,485) (339,585)
UBTI (339,485) (339,585) (339,685)
Tax:
UBIT—rate 35% 35% 35%
UBIT—tax -0- -0- -0-
1Readership costs included payroll for writers and editors, printing expenses, and postage
from mailing the periodicals to members. NEA allocated expenses between advertising and
readership using a ratio representing the number of pages of advertising over the total num-
ber of pages in the periodicals for each year.
As the above table shows, the circulation revenue that NEA
reported was zero for fiscal year 2001 and was minimal for
4 The Alabama enrollment form states, ‘‘I understand that of the total NEA dues, $4.50 [is]
for a subscription for one year to NEA TODAY, $2.45 for NEA–Retired and/or $16.00 for the
Higher Education Publication.’’ The Oklahoma form states, ‘‘Subscriptions to OEA publications
($4.11) and NEA today ($4.50) are included.’’ The Oregon form states, ‘‘Annual Membership dues
to NEA includes $4.50 for NEA Today, and/or $16.00 for the Higher Education publications.’’
The Pennsylvania form states, ‘‘I understand * * * of the total NEA dues $4.50 is for a one
year subscription to NEA Today.’’ To similar effect, NEA secretary-treasurer’s reports (provided
to members in NEA Today) stated that $7.70 and $8.32 of the annual membership dues for the
two years, respectively, went to ‘‘[p]roduce communications that provide a common under-
standing of Association priorities.’’ The record does not enable us to reconcile those figures, but
such a reconciliation is not necessary to decide this case.
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(100) NEA v. COMMISSIONER 107
fiscal years 2002 and 2003. That minimal revenue consisted
of NEA’s proceeds from selling subscriptions to nonmembers.
The low circulation revenue that NEA reported caused NEA to
show excess readership costs, which it used to fully offset its
profits from advertising. Accordingly, NEA reported zero UBTI
for each of the years at issue. NEA also reported (but did not
need to use) a loss carryforward that it derived from excess
readership costs in prior years.
The IRS’s notice of deficiency
After an examination, the IRS issued a notice of deficiency
dated June 25, 2009, determining adjustments to NEA’s UBTI
and UBIT. The effect of the IRS’s adjustments is set out in the
table below:
FYE Aug. 31
2001 2002 2003
Advertising income:
Advertising and royalty revenue $2,960,652 $3,109,378 $3,453,075
Less direct advertising costs 2,047,756 1,838,023 2,473,673
Net advertising income 912,896 1,271,355 979,402
Circulation income:
Circulation revenue 8,656,335 9,448,601 10,517,943
Less readership costs 6,701,483 7,557,196 7,673,271
Excess exempt expenses (a.k.a. excess readership
costs) -0- -0- -0-
Unrelated business taxable income:
Net profit from advertising 912,896 1,271,355 979,402
Less other allowable deductions = taxes, licenses,
and other 1,200 1,200 1,200
UBTI before net operating loss carryforward 911,696 1,270,155 978,202
Net operating loss carryforward -0- -0- -0-
UBTI 911,696 1,270,155 978,202
Tax:
UBIT—rate 35% 35% 35%
UBIT—tax 319,094 444,554 342,371
As is shown above, the IRS allocated a portion of NEA’s
membership dues to circulation income, which caused the IRS
to determine that for the three years at issue NEA had cir-
culation income of approximately $8.7 million, $9.4 million,
and $10.5 million. NEA has conceded that if it must allocate
a portion of membership dues to circulation income in the
manner that the IRS determined, then NEA would not have a
net operating loss carryforward from its fiscal year ended
August 31, 2000. The above table also reflects, and NEA has
conceded, relatively minor adjustments to NEA’s advertising
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108 137 UNITED STATES TAX COURT REPORTS (100)
revenue, royalty revenue, advertising costs, readership costs,
and other allowable deductions.
OPINION
I. Burden of proof
As a general rule, 5 we presume that the Commissioner’s
determinations are correct, and the taxpayer has the burden
of establishing that the determinations in the notice of defi-
ciency are erroneous. Rule 142(a); Welch v. Helvering, 290
U.S. 111, 115 (1933). Similarly, the taxpayer bears the bur-
den of proving entitlement to any adjustments that would
reduce the deficiency. INDOPCO, Inc. v. Commissioner, 503
U.S. 79, 84 (1992). ‘‘[T]he fact that a case is fully stipulated
does not change the burden of proof.’’ Borchers v. Commis-
sioner, 95 T.C. 82, 91 (1990), affd. 943 F.2d 22 (8th Cir.
1991).
II. The fragmentation of an exempt organization’s activities
A. Provisions of the Code
The Internal Revenue Code taxes the UBTI of an exempt
organization as a trade or business activity that is not
substantially related to the organization’s exempt purpose.
Sec. 511(a)(1). One of the main purposes for taxing UBTI is
to prevent unfair competition with taxable counterparts and
to curb related abuses by otherwise nontaxable businesses.
United States v. Am. Bar Endowment, 477 U.S. 105, 114
(1986); United States v. Am. College of Physicians, 475 U.S.
834, 837–838 (1986). Corollary aims include the ‘‘ ‘larger
goals of producing revenues and achieving equity in the tax
system.’ ’’ Am. Med. Association v. United States, 887 F.2d
760, 772 (7th Cir. 1989) (quoting La. Credit Union League v.
United States, 693 F.2d 525, 540 (5th Cir. 1982)).
The Code generally defines UBTI as gross income from an
unrelated trade or business less allowable deductions con-
nected directly with the carrying on of such trade or busi-
ness. Sec. 512(a)(1). For these purposes, a trade or business
may include not only a complete business enterprise but also
5 Under certain circumstances, if the taxpayer meets specific criteria, the burden of proof can
shift to the Commissioner. See sec. 7491(a). However, NEA did not argue for a shift in the bur-
den of proof, and the record does not suggest a basis for such a shift.
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(100) NEA v. COMMISSIONER 109
any component activity of a business. 26 C.F.R. sec. 1.513–
1(b).
B. Provisions of the regulations
With respect to periodicals published by tax-exempt
organizations, section 1.512(a)–1(f)(3)(i) of the regulations
‘‘fragments’’ the organization’s taxable trade or business of
selling advertising space (i.e., advertising income) from the
organization’s nontaxable activity of publishing readership
content related to the organization’s exempt purpose (i.e., cir-
culation income). See Am. Med. Association v. United States,
887 F.2d at 764; W. Va. State Med. Association v. Commis-
sioner, 91 T.C. 651, 656 (1988), affd. 882 F.2d 123 (4th Cir.
1989). The approach likewise divides the periodical’s costs
into two categories: direct advertising costs and readership
costs. 26 C.F.R. sec. 1.512(a)–1(f)(6)(i).
The organization may deduct the full amount of direct
advertising costs from gross advertising income, 26 C.F.R.
sec. 1.512(a)–1(f)(2)(i); and in this case the IRS generally
allowed these deductions (with only minor adjustments not
now in dispute). In addition, the organization may deduct
from its advertising income the readership costs that it
incurs in the same year, but only if those readership costs
exceed circulation income (and thereby yield ‘‘excess reader-
ship costs’’). 26 C.F.R. sec. 1.512(a)–1(f)(2)(ii)(b). The fol-
lowing formula conceptualizes these rules: (1) Gross adver-
tising income, minus (2) direct advertising costs, minus (3)
excess readership costs (the amount by which readership
costs exceed circulation income), equals (4) net UBTI from the
sale of advertising. Natl. Association of Life Underwriters,
Inc. v. Commissioner, T.C. Memo. 1992–442, 64 TCM (CCH)
379, 386, revd. and remanded on other grounds 30 F.3d 1526
(D.C. Cir. 1994).
The rationale for allowing the deduction of excess reader-
ship costs—but only where they are excess readership costs—
is that where there are such excess costs, the circulation
activity is not self-sustaining, and therefore the exempt
organization needs the paid advertisements to cover the
shortfall. In other words, the paid advertising ‘‘ ‘contribute[s]
importantly’ ’’ to maintaining the publication’s exempt pur-
pose. Am. Med. Association v. United States, 887 F.2d at 763
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110 137 UNITED STATES TAX COURT REPORTS (100)
(quoting United States v. Am. College of Physicians, 475 U.S.
at 847)). If, on the other hand, the organization earns a profit
on its circulation income, 6 then the publication did not need
any advertising revenue to sustain its readership content,
and therefore, the advertising was not ‘‘ ‘substantially
related’ ’’ to the organization’s exempt purpose, id.; the adver-
tising was, instead, a fundraising activity in competition with
non-exempt publications that likewise sell advertising and
must pay income tax on their profits. Consequently, when
the circulation activity earns a profit, the exempt organiza-
tion may not deduct its readership costs against its adver-
tising income, and the organization must pay UBIT on its
profits from advertising. Id.
C. The parties’ contentions
The disputed issue in this case is the calculation of NEA’s
circulation income. NEA contends that its members did not
have ‘‘the right to receive’’ the magazines because NEA was
under no obligation to continue publishing—it could stop
sending issues at any time—and because its members as well
as the general public could access the magazines for free on
the Internet. NEA therefore contends that it (a) had virtually
no circulation income, (b) consequently had substantial
excess readership costs, and (c) can deduct those costs from
its advertising income, reducing that income to zero.
The IRS contends, to the contrary, that NEA members had
the right to receive the magazines because a portion of NEA’s
members’ dues was in fact paid for magazines. The IRS there-
fore contends (a) that NEA had substantial circulation income
that more than covered the cost of producing the magazines,
(b) that NEA consequently had zero excess readership costs,
and (c) that as a result NEA had unrelated business taxable
income from its paid advertising.
6 Since the organization’s publication is a means of accomplishing its exempt purpose, the net
profit resulting from the publishing activity is treated as income related to its exempt activity,
not unrelated income. The advertising, however, is treated as a distinct activity that is unrelated
and therefore taxable.
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(100) NEA v. COMMISSIONER 111
III. The meaning of ‘‘the right to receive’’
A. The regulatory language at issue
The outcome in this case is determined by 26 C.F.R. sec.
1.512(a)–1(f)(3)(iii), Income Tax Regs., which provides as fol-
lows:
Where the right to receive an exempt organization periodical is associated
with membership or similar status in such organization for which dues,
fees or other charges are received (hereinafter referred to as ‘‘membership
receipts’’), circulation income includes the portion of such membership
receipts allocable to the periodical (hereinafter referred to as ‘‘allocable
membership receipts’’). * * * [Emphasis added.]
B. The lack of ‘‘plain meaning’’
The starting point for interpreting a regulatory provision is
its plain meaning, Intermountain Ins. Serv. of Vail, LLC v.
Commissioner, 134 T.C. 211, 218 (2010), revd. on other
grounds 650 F.3d 691 (D.C. Cir. 2011), and NEA argues that
the interpretation of the phrase ‘‘the right to receive’’ is clear
on its face as meaning a legally enforceable claim or interest.
To support its position, NEA points to definitions for the word
‘‘right’’ in Black’s Law Dictionary 1436 (9th ed. 2009)
(Black’s), 7 from which it quotes the first five definitions:
right, n. (bef. 12c) 1. That which is proper under law, morality, or ethics
<know right from wrong>. 2. Something that is due to a person by just
claim, legal guarantee, or moral principle <the right of liberty>. 3. A
power, privilege, or immunity secured to a person by law <the right to dis-
pose of one’s estate>. 4. A legally enforceable claim that another will do
or will not do a given act; a recognized and protected interest the violation
of which is a wrong <a breach of duty that infringes one’s right>. 5. (often
7 NEA also relies on Lamont v. Postmaster General, 381 U.S. 301, 305–306 (1965), but the au-
thority is off the mark. Lamont held that, because the First Amendment bars Congress from
‘‘abridging’’ the freedom of the press, the Government may not interfere with an addressee’s
ability to receive his mail. The phrase ‘‘right to receive’’ does not appear in the majority opinion
in Lamont; and even if it did, invoking authorities that address First Amendment rights—which
plainly are enforceable legal rights, see U.S. Const., art. VI (‘‘This Constitution * * * shall be
the supreme Law of the Land’’)—begs the question whether a member’s ‘‘right to receive’’ maga-
zines from NEA is in fact, like First Amendment rights, a legal right. Even if NEA has no obli-
gation to produce and the member has no right to receive NEA Today, the Government is pre-
sumably barred from blocking the member’s receipt of the magazine once it is mailed, so that,
vis-a-vis the Government, NEA members can be said to have ‘‘the right to receive’’ NEA’s maga-
zines without Government interference. However, the question whether the Government could
bar NEA members from receiving NEA Today (a question more like the one at issue in Lamont)
is a different question from whether, vis-a-vis NEA, the member has ‘‘the right to receive’’ the
magazine.
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112 137 UNITED STATES TAX COURT REPORTS (100)
pl.) The interest, claim, or ownership that one has in tangible or intangible
property <a debtor’s rights in collateral> <publishing rights>. * * *
Of these, NEA asserts that the fourth is the most fitting—i.e.,
‘‘A legally enforceable claim that another will do or will not
do a given act; a recognized and protected interest the viola-
tion of which is a wrong’’.
The IRS argues for an interpretation of ‘‘right to receive’’
that is less stringent than a legally enforceable right. The IRS
criticizes NEA’s selection from the definitions in Black’s and
asserts that the ‘‘just claim’’ portion of the second definition
(‘‘Something that is due to a person by just claim, legal guar-
antee, or moral principle’’) is the one most consistent with
the regulation. Whether or not the IRS’s counter-selection is
superior, it must be noted that Black’s definitions of a ‘‘right’’
include both a ‘‘legally enforceable’’ claim (No. 4, to which
NEA prefers to point) and a claim that is merely ‘‘just’’ or
‘‘moral’’ (No. 2, to which the IRS prefers to point). Con-
sequently, we conclude that we cannot determine, by ‘‘plain
meaning’’, whether a ‘‘right to receive’’ must be legally
enforceable, and that other interpretive principles must be
consulted. 8
C. The lack of an agency position to which a court could
defer
In support of its position, the IRS invokes the principle that
an agency’s interpretation of its own regulation is controlling
unless it is ‘‘ ‘plainly erroneous or inconsistent with the regu-
lation.’ ’’ Auer v. Robbins, 519 U.S. 452, 461 (1997) (quoting
Robertson v. Methow Valley Citizens Council, 490 U.S. 332,
359 (1989)); Lantz v. Commissioner, 132 T.C. 131, 144 n.10
(2009), revd. on other grounds 607 F.3d 479 (7th Cir. 2010).
However, the application of this principle to resolve the cur-
rent dispute is difficult, first, because of unclarity in the IRS’s
position. The IRS stops short of adopting Black’s definition
No. 2 of ‘‘right’’ (‘‘due to * * * just claim * * * or moral prin-
ciple’’), and does not declare what should be the precise
interpretation of ‘‘right to receive’’, other than to say what it
is not—i.e., it is not necessarily an enforceable legal right to
receive. The IRS contends that, on a case-by-case basis, courts
8 The rules of statutory construction also apply to the construction of regulations. See Estate
of Schwartz v. Commissioner, 83 T.C. 943, 953 (1984).
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(100) NEA v. COMMISSIONER 113
should apply an unspecified looser standard. We cannot defer
to a position that is not expressly articulated.
Deference here to the agency’s interpretation is difficult,
second, because the IRS is unable to show that the agency
has in fact stated a position on the interpretation of ‘‘right
to receive’’. Its only cited support for the existence of an
announced agency position is the preamble to the final regu-
lations at issue, which states: ‘‘Where periodicals are fur-
nished dues paying members * * * without further charge,
a portion of the dues must be allocated to the circulation
income of the periodical.’’ 40 Fed. Reg. 58638 (Dec. 18, 1975)
(emphasis added). However, if this statement were the
agency’s position on the meaning of ‘‘the right to receive’’, it
would prove far too much. This sentence alone, construed lit-
erally, would call for allocation of income not when there was
a ‘‘right to receive’’ (whether legal or moral) but whenever
the periodical was ‘‘furnished’’, with or without the organiza-
tion’s prior promise or prediction. If courts were obliged to
defer to that sentence in the preamble to govern disputes like
the current one, then the requirement of a ‘‘right to receive’’
would be displaced by the notion of mere receipt; whenever
members received a periodical (whether or not they had a
right to receive it), income would be allocated.
But the IRS does not advance that interpretation of the
regulation (and for good reason, since it would ignore the
actual language of the regulation). Rather, its position does
acknowledge that there must be a showing of a ‘‘right’’ of
some sort, and for that position the preamble language gives
no support. We therefore find no articulated agency
interpretation to which we could defer.
D. The lack of comparable regulations
To put in perspective the ‘‘right to receive’’ regulation at
issue here, the IRS points to one regulation that looks to ‘‘an
enforceable right to receive’’ 9 and another that looks to ‘‘a
legally enforceable right to receive.’’ 10 In these regulations,
the modifiers ‘‘enforceable’’ and ‘‘legally enforceable’’ either
are surplusage or else suggest (as the IRS contends) that
9 26 C.F.R. sec. 20.2039–1(b)(1)(ii), Estate Tax Regs. (emphasis added) (concerning the inclu-
sion of an annuity or other payment stream in the gross estate of a decedent).
10 26 C.F.R. sec. 1.823–6(c)(2)(ii), Income Tax Regs. (emphasis added) (concerning statutory
underwriting income or loss for mutual insurance companies).
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114 137 UNITED STATES TAX COURT REPORTS (100)
there can be a ‘‘right to receive’’ that is not legally enforce-
able. And if there can be such a non-enforceable ‘‘right’’, then
where such modifiers are absent (as in the regulation at
issue), a ‘‘right to receive’’ should (the IRS contends) be
considered to exist even where it is not enforceable.
By way of example, the IRS points to one regulation where
‘‘right to receive’’ lacks such modifiers and is indeed under-
stood to refer to a non-enforceable right: 11 26 C.F.R. section
1.451–1(a) provides that ‘‘[u]nder an accrual method of
accounting, income is includible in gross income when all the
events have occurred which fix the right to receive such
income and the amount thereof can be determined with
reasonable accuracy.’’ (Emphasis added.) In Flamingo Resort,
Inc. v. United States, 664 F.2d 1387, 1388 (9th Cir. 1982), the
Court of Appeals for the Ninth Circuit held ‘‘that accrual [of
income] was proper despite the absence of legal enforce-
ability.’’ That is, in the income accrual context, a ‘‘right to
receive’’ could apparently exist even where there was not
necessarily a legally enforceable right to receive. If that is
true with respect to the accrual regulation at issue in Fla-
mingo Resort, then (the IRS contends) it is also true with
respect to the circulation income regulation at issue here.
‘‘ ‘It is generally presumed that Congress acts intentionally
and purposely’ when it ‘includes particular language in one
section of a statute but omits it in another.’ ’’ See Lantz v.
Commissioner, 132 T.C. at 139 (citing City of Chicago v.
Envtl. Def. Fund, 511 U.S. 328, 338 (1994)). We likewise pre-
sume that the Secretary of the Treasury acts intentionally
when including language in one section of a regulation but
not another. This principle, however, does not necessarily
extend to construing common language that occurs in dif-
ferent regulations, especially not when their context and pur-
pose are very different, as they are here. The phrase ‘‘right
to receive’’ appears in dozens of different contexts in the
11 In fact the IRS points to two regulations, but one is clearly inapposite: 26 C.F.R. sec.
1.691(a)–1(b), Income Tax Regs., provides that ‘‘the term income in respect of a decedent [IRD]
refers to those amounts to which a decedent was entitled as gross income’’ (emphasis added);
and Rollert Residuary Trust v. Commissioner, 752 F.2d 1128 (6th Cir. 1985), affg. 80 T.C. 619
(1983), held that ‘‘[t]he key test for determining whether the decedent had a ‘right’ or was ‘enti-
tled’ to the post-mortem bonus should be based on the likelihood, at the time of his death, that
he would receive the bonus, not on his legal rights to it’’, id. at 1132 (emphasis added), thus
showing that an ‘‘entitlement’’ might exist even where there may not be a legal right. However,
a regulation involving an ‘‘entitlement’’ is hardly in pari materia with a regulation involving a
‘‘right to receive’’, especially where their respective contexts (IRD and UBTI) are so different.
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(100) NEA v. COMMISSIONER 115
Code and regulations. 12 Under the accrual regulation the IRS
cites, ‘‘the issue is when does the right to receive the income
* * * become ‘fixed’ for accrual purposes’’. Flamingo Resort,
Inc. v. United States, 664 F.2d at 1388 (emphasis added).
Thus, the focus of the cited provision in the accrual regula-
tion is not whether there is revenue (which is presumed) but
rather the timing of the recognition of revenue, whereas the
focus of the circulation income regulation at issue here is not
when but whether circulation income ought to be allocated at
all.
We therefore do not find that the meaning of ‘‘right to
receive’’ in the circulation income regulation is informed by
its meaning in the other regulations the IRS has cited.
E. Our analysis of ‘‘the right to receive’’
The interpretive question to be decided is whether ‘‘the
right to receive’’ in 26 C.F.R. section 1.512(a)–1(f)(3)(iii) is, as
NEA contends, a legal right or is instead, as the IRS contends,
a ‘‘right’’ founded on a claim that is just or moral but not
enforceable or legal. We hold that the ‘‘right to receive’’ must
be a legal right.
Pursuant to section 7805(a), the Secretary has the
authority to ‘‘prescribe all needful rules and regulations for
the enforcement of ’’ the unrelated business income tax. He
thus had the power to articulate, by regulation, the standard
by which membership dues would and would not be allocated
to circulation income. He did not promulgate a regulation
that allocates membership dues to circulation whenever
members simply ‘‘receive a periodical’’, or whenever they have
a ‘‘reasonable expectation of receiving a periodical’’, or when-
ever they have a ‘‘just or moral claim to receive a periodical’’.
Instead, the IRS’s regulation allocates dues when a ‘‘right to
receive an exempt organization periodical is associated with
membership * * * for which dues * * * are received’’. 26
C.F.R. sec. 1.512(a)–1(f)(3)(iii) (emphasis added).
We believe that ‘‘right to receive’’ is a term that the Sec-
retary would not have used if he had intended the regulation
to set any of those looser standards. To interpret that term
to mean that mere receipt triggers allocation (which the IRS
12 A computer search revealed 253 instances where provisions in the Code, in final regula-
tions, or in temporary regulations use the phrase ‘‘right to receive’’.
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116 137 UNITED STATES TAX COURT REPORTS (100)
does not argue), one must effectively ignore the word ‘‘right’’
in the regulation. To interpret that term to mean that
expectation of receipt triggers allocation (which the IRS does
not explicitly argue), one must equate ‘‘expectation’’ with
‘‘right’’—two terms that are not at all interchangeable. To
interpret that term to mean that a non-enforceable just or
moral claim gives rise to a non-legal ‘‘right’’ that triggers
allocation (which the IRS does appear to argue), one must
read the regulation as conferring on the tax collector and the
courts the responsibility of adjudicating justice and morality
in the sphere of membership periodicals. While it cannot be
said that the Internal Revenue Code never makes tax con-
sequences turn on other-than-legal considerations, see, e.g.,
sec. 6015(f) (granting relief from joint liability where ‘‘it is
inequitable to hold the individual liable’’), it is nonetheless
overwhelmingly true that the Code sets up rights and
responsibilities that are determined by objective, reviewable,
legal standards. The IRS does not explain, and we cannot
imagine, the rules or standards by which one would make
the non-legal determination of the justice or morality of a
member’s claim to an organization’s periodical. We decline to
hold that this difficult and improbable regime is enacted into
the UBIT rules by the term ‘‘right to receive’’.
Instead, we hold that membership dues are allocated to
circulation income when the dues-paying members have a
legal right to receive the organization’s periodical.
IV. Whether NEA’s members had a legal ‘‘right to receive’’ the
periodicals
A. The parties’ arguments
NEA claims that its members had no legally enforceable
right to receive the periodicals, and therefore that an alloca-
tion of membership dues under 26 C.F.R. section 1.512(a)–
1(f)(3)(iii) is inappropriate. NEA also contends that by making
the publications available free on the Internet, it negates any
right that the members might otherwise have to receive the
periodicals and therefore nullifies any requirement under the
regulation for NEA to allocate its membership dues.
The IRS counters that NEA failed to meet its burden of
establishing that its members did not have a legal right to
the periodicals and that the preponderance of the evidence
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(100) NEA v. COMMISSIONER 117
shows that NEA’s members did have a legally enforceable
right to receive the publications. Further, the IRS contends
that NEA is wrong about the significance of its Internet
publications. For the reasons discussed below, we agree with
the IRS.
B. The right to receive the periodicals under NEA’s gov-
erning documents
Section 2–3(c) of NEA’s bylaws states that members are
‘‘eligible to receive * * * publications of the Association in
accordance with the policies and procedures of the Associa-
tion’’. This bylaw would appear to resolve the issue and grant
NEA’s dues-paying members ‘‘the right to receive’’ the maga-
zines. NEA rejoins that this provision does not say which
publications would be received and argues that it maintained
the right to unilaterally reduce or eliminate the number of
periodicals it published.
NEA’s bylaws do not explicitly reserve that right to NEA,
and the following evidence shows that NEA could not halt
publication of the magazines at its whim.
1. NEA’s practical obligation to publish
NEA’s
periodicals at issue are not mere pamphlets or
mimeographed newsletters but are substantial magazines,
for which the ‘‘press schedule * * * is set a year in advance’’.
Nothing in the record in this case would support the sugges-
tion that NEA could simply halt publication. At any given
moment when a member pays his dues, NEA has a year’s
worth of periodical issues in the pipeline—and under the
bylaws the member is ‘‘eligible’’ to receive them when they
are published.
Other provisions in NEA’s governing documents indicate
that NEA could not simply cease publication at its discretion:
Standing rule 9C, sections 1(b) and 2(b), and standing rule
10D required that NEA publish proposed amendments to its
constitution and bylaws and annual candidate pictures and
statements in publications that it sends to members; and it
was in NEA Today that NEA fulfilled that requirement. NEA
argues that nothing would have prevented NEA from issuing
the required notices to members in some other official NEA
publication, including an annual report or special publica-
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118 137 UNITED STATES TAX COURT REPORTS (100)
tion. NEA, however, provided no evidence that it has ever
used these alternative means of communication. Clearly, NEA
Today was NEA’s normal means of communicating with mem-
bers, and NEA’s modus operandi was to use NEA Today to ful-
fill the obligations imposed by its bylaws.
2. Contracts with advertisers
The record does not include NEA’s contracts with its adver-
tisers, but it does show that NEA did have such contracts, in
which it made commitments about the volume of its circula-
tion. NEA has not shown how it could halt publication with-
out violating those contractual commitments.
3. Postal regulations
Another practical impediment to NEA’s cessation of publica-
tion results from the postal regulations. Section E211.10.5(c)
of the Domestic Mail Manual (‘‘DMM’’), 13 as in effect for the
years at issue, required that a periodical include a ‘‘state-
ment of frequency’’ of publication, and section E211.5.3 pro-
vided:
All issues must be published regularly as called for by the statement of
frequency. * * * If a publication does not maintain regular issuance
according to its stated frequency, even after USPS notice, the RCSC [Rates
and Classification Service Center] serving the known office of publication
revokes the publication’s Periodicals mailing privileges.
A favorable postal rate is important to an organization that
sends mail to 2.5 million members. NEA therefore needed to
fulfill the commitment it made in its statement of frequency.
4. The irrelevance of a right to cease publication
Even if we assume that NEA had the prerogative of ceasing
the publication of one or both of the periodicals at issue, that
assumption does not resolve the issue in NEA’s favor. Under
the regulation, the question is simply whether dues-paying
members have ‘‘the right to receive an exempt organization
periodical’’. The fact is that during the periods at issue NEA
13 See 39 C.F.R. sec. 111.1 (2011) (‘‘the U.S. Postal Service hereby incorporates by reference
in this part, the Domestic Mail Manual’’). Sections 5.3 and 10.5(c) are identical in DMM Issue
55 (Jan. 10, 2000), Issue 56 (Jan. 7, 2001), and Issue 57 (June 30, 2002). The parties’ stipulation
includes excerpts from the 2005 version of the DMM, but we rely on the versions in effect for
the years at issue without deciding whether their terms are regulations with the force of law
or simply facts of which we take judicial notice pursuant to Federal Rule of Evidence 201.
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(100) NEA v. COMMISSIONER 119
did publish the periodicals. Given that the periodicals were
published, NEA’s bylaws establish that the members were
entitled to receive them. After each year-end, when NEA was
preparing its tax returns, NEA already knew that it had pub-
lished the magazines in the prior year and that its members
had received them as they were entitled, making it irrelevant
whether the members would have had a right to receive the
magazines if NEA had stopped publishing them.
C. NEA’s affiliates’ grant of the right to receive the periodi-
cals
All four of the State affiliate enrollment forms in the
record list the same amount—$4.50—as the amount of a
member’s dues allocable to a subscription to NEA Today; and
we presume that the forms for the other affiliates are equiva-
lent. 14 NEA acknowledges that the State membership enroll-
ment forms in the record ‘‘mentioned’’ the publications as a
benefit of membership. But NEA claims that it ‘‘does not con-
trol those state entities or the language on their application
forms.’’ Even if true, however, that claim of non-control does
not undo the effect of the affiliates’ statements.
The only means for joining NEA is to join an affiliate, and
NEA authorizes its affiliates to solicit membership applica-
tions. The NEA-authorized affiliates’ forms promise the
publications. By signing a State affiliate’s enrollment form,
an applicant agrees to pay membership dues to the affiliate
and to NEA in exchange for, in part, receiving a subscription
to NEA’s periodicals. The affiliate thus induces the applicant’s
payment of dues in return for (inter alia) the promise that
NEA will provide the periodical. In so doing, the affiliate only
echoes what NEA regularly announced on its masthead (‘‘NEA
Today is mailed to all NEA members as a benefit of member-
ship’’ (emphasis added)) and what NEA’s Handbook stated
(‘‘NEA members receive a variety of timely and informative
periodicals, including NEA Today’’). Accordingly, the following
common law principles of agency apply:
14 See Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946) (‘‘The rule
is well established that the failure of a party to introduce evidence within his possession and
which, if true, would be favorable to him, gives rise to the presumption that if produced it would
be unfavorable’’), affd. 162 F.2d 513 (10th Cir. 1947).
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120 137 UNITED STATES TAX COURT REPORTS (100)
In order to bind the principal [i.e., NEA], the agent [i.e., the affiliate] must
have either actual or apparent authority, or the principal must ratify the
agent’s acts. Trans World Travel v. Commissioner, * * * [T.C. Memo.
2001–6, 81 TCM (CCH) 979, 983]. Authority may be granted by express
statements or may be derived by implication from the principal’s words or
actions. Restatement, Agency 2d, sec. 26 (1957). Whether an agent is
authorized to act for the principal is decided by taking into account all the
circumstances, including the relationship of the parties, the common busi-
ness practices, the nature of the subject matter, and the facts of which the
agent has notice concerning objects the principal desires to accomplish. Id.
at sec. 34. * * * [Gouveia v. Commissioner, T.C. Memo. 2004–256, 88 TCM
(CCH) 424, 431.]
An individual signing an affiliate’s enrollment form would
have every reason to believe that the State affiliate, as the
agent, had authority to bind NEA, the principal, to delivering
the periodicals as the benefit that NEA had promised and
according to the publication schedule that NEA had
announced. The State enrollment forms explicitly stated that
a specific portion of the member’s dues went toward a one-
year subscription to NEA Today, and the enrollment forms
correctly indicated that joining the State affiliate was not
possible without also joining NEA.
The State affiliates had at least apparent authority as
agents to bind NEA to provide the periodicals; and NEA’s
words and actions as the principal affirmed the agent-affili-
ates’ representations, giving NEA members the legal right to
receive the periodicals.
D. Availability of the periodicals on the Internet
NEA’s
final argument is that even if its members had a
legal right to receive the periodicals, the fact that NEA made
the periodicals available free to the general public on the
Internet negates the regulation’s allocation requirement. 15
That is, NEA contends in effect that because both members
and non-members can receive the periodicals on the Internet
15 In support of this argument, NEA cites an unpublished Field Service Advice Memorandum
and an unpublished Private Letter Ruling. The IRS objects to this use of an FSA and a PLR,
distinguishes them from NEA’s case, and counter-cites two unpublished Technical Advice Memo-
randa. However, such unpublished determinations ‘‘may not be used or cited as precedent’’, sec.
6110(k)(3), and we decline to consider any of these determinations, see Abdel-Fattah v. Commis-
sioner, 134 T.C. 190, 202 & n.15 (2010). NEA also cites IRS Announcement 2000–84, 2000–2
C.B. 385, 385, which states: ‘‘The growing use of the Internet by exempt organizations raises
questions regarding whether clarification is needed concerning the application of the Code to
Internet activities’’. However, this Announcement says nothing about advertising or circulation
income.
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(100) NEA v. COMMISSIONER 121
without regard to the payment of dues, it is not fair to say
that members receive the periodicals in return for the pay-
ment of dues. This contention is contradicted, however, by
two facts:
First, the Internet versions of the periodicals do not
include all of the content of the paper editions. The paid
advertising and the letters to the editor are available only in
the print edition. The record includes no evidence that these
features are of no value to members.
Second, that NEA goes to significant expense and trouble to
produce the paper editions shows that paper copies of the
periodicals have value even in the Internet era. We take
judicial notice of the fact that many periodicals have both on-
line editions that one may access without cost and paper edi-
tions for which subscriptions must be paid. Evidently, a
market still exists for paper publications. A user who has on-
line access to a publication may still value receiving a paper
copy. NEA put on no evidence that its members do not value
the paper periodicals, and its decision to persist in publishing
them is strong evidence to the contrary.
Allocation of dues to circulation income, notwithstanding
the free availability of most of the periodicals’ content on the
Internet, is consistent with the opinion of the Court of
Appeals for the Seventh Circuit in Am. Med. Association v.
United States, 887 F.2d 760 (7th Cir. 1989). The American
Medical Association (‘‘AMA’’) is a tax-exempt organization,
organized ‘‘to promote the science and art of medicine for the
betterment of public health.’’ Id. at 762. To further that mis-
sion, AMA published two periodicals, the Journal of the Amer-
ican Medical Association (JAMA) and the American Medical
News (AM News) Id. The periodicals contained medical arti-
cles as well as paid advertising. Id. AMA members received
the periodicals at no additional cost as a benefit of member-
ship. Id.
To attract more advertising sponsors, the AMA informed
advertisers that it was sending complimentary copies of JAMA
and AM News to certain prized groups of physicians called
controlled circulation groups. Id. Many of the targeted physi-
cians were also dues-paying members of AMA and therefore
would have been entitled to receive JAMA and AM News with-
out cost anyway, because of their membership. Id. The AMA
did not directly inform these targeted physicians that they
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122 137 UNITED STATES TAX COURT REPORTS (100)
were entitled to the free copies as a benefit of their member-
ship. The AMA also did not refund any portion of the member-
ship dues to these prized dues-paying physicians. Id.
The Court of Appeals for the Seventh Circuit held that
under 26 C.F.R. section 1.512(a)–1(f)(3)(iii), AMA had to allo-
cate a portion of its membership dues from the controlled
group to circulation income to the same extent as with the
dues of AMA’s other members. Id. at 777. The court reasoned
that ‘‘[a]lthough our over-generous physicians paid more for
the journal than they needed to, this does not change the
basic fact—they did pay for the journal, and the publisher
was only too happy to keep the unnecessary payment.’’ Id.
The court concluded that a commercial publisher similarly
situated to the AMA would have been ‘‘laughing all the way
to the bank’’ as it retained the money paid by the unknowing
physicians while purging their names from the controlled cir-
culation list to make sure that those physicians did not
receive two copies of the publications. Id. Similarly, the court
held, dues were allocable to circulation income even in the
case of AMA members who would have received the periodi-
cals apart from their payment of dues (i.e., doctors who were
in the controlled circulation group and received free copies as
such). In the same way, dues from NEA’s members are allo-
cable to circulation income even though members can access
the content apart from their payment of dues (i.e., via the
Internet).
NEA attempts to distinguish its situation from that in
American Medical Association. NEA argues that its members
had ‘‘no right to receive’’ NEA Today and This Active Life
because ‘‘anyone can get the publications for free’’, whereas
in American Medical Association only a limited number of
targeted members received the periodicals for free. We dis-
agree that this distinction makes a difference. Whether the
periodical content is available without cost to only a few
members (as with ‘‘controlled circulation’’ in American Med-
ical Association) or to all members and the world at large (as
with NEA’s periodicals on the Internet), the question is the
same: Does the alternative free availability of a publication
to a member nullify his right to receive the publication that
results from his payment of dues? We agree with the Court
of Appeals for the Seventh Circuit that the answer is no.
Like the hypothetical commercial publisher who laughed all
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(100) NEA v. COMMISSIONER 123
the way to the bank in American Medical Association, NEA
could induce the payment of dues by telling its members that
a portion of their membership dues is to pay for a magazine
subscription but at the same time could know that the
publications are available for free on the Internet. NEA’s
arrangement with its members required them to pay for the
paper editions of the periodicals when they paid their dues,
and the additional availability of an on-line edition did not
change the fact that the members obtained the paper edi-
tions by paying their dues.
CONCLUSION
26 C.F.R. section 1.512(a)–1(f)(3)(iii), Income Tax Regs.,
requires an allocation of membership dues to circulation
income if the exempt organization’s members have a legal
right to receive the publications. For the years at issue, NEA
members had such a legal right to receive the periodicals.
The fact that NEA also made most of the content of the
periodicals available on the Internet does not change this
conclusion. Consequently, the IRS was correct in requiring
NEA to allocate a portion of its membership dues to circula-
tion income. NEA does not dispute the IRS’s computations,
and therefore NEA must allocate a portion of its members’
dues in the amounts that the IRS determined.
To reflect the foregoing,
Decision will be entered under Rule 155.
f
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