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IRS Forms Reveal More K St. Pay Data

A new federal tax requirement is exposing sensitive salary information of trade association lobbyists and other senior employees, setting off alarms downtown over how the information will be used.

The new filings, available publicly at Guidestar.org, offer a first comprehensive glimpse into the salaries not only of top association executives — which have been disclosed for years — but of lobbyists, spokesmen and other mid-level executives whose pay must now be disclosed.

“We’re concerned,” said Jim Clarke, a vice president of public policy with the American Society of Association Executives, a lobbying organization representing industry groups.

Along with other updates, the Internal Revenue Service in 2008 dramatically expanded its disclosure requirements for trade associations, charities and other nonprofit organizations, bulking up its Form 990 to require detailed salary information for executives and other “key employees.”

Although organizations began filing the new IRS form as early as last year, tax experts say the overhaul’s effects are just now emerging, as many groups filed extensions while sorting through the new rules.

“A lot of them are just coming in,” Clarke said of the new tax forms. “A lot of our organizations have fiscal years that end in June, July and August.”

A tax lawyer who represents downtown trade groups privately blasted the new rules for creating a fresh bureaucratic mess, calling the updated IRS form an example of “how bad facts make bad law.” The lawyer claimed that Members and IRS officials set up the new system after overreacting to news reports of some nonprofit executives’ generous compensation packages.

“The view evolved that maybe we couldn’t stop these people from being compensated at a very high level, but we could do something quite similar: force them to make their compensation public, which will shame everyone into paying them less,” the lawyer said.

When the changes were being considered, many nonprofit executives expressed concerns that “this was just too much information,” the lawyer said, likely setting up inter-office squabbles and bidding wars for talented employees.

The IRS’ press office did not respond to a request for comment for this story.

A spokesman for the Pharmaceutical Research and Manufacturers of America, which filed its 2008 return in November of last year, expressed skepticism on Tuesday about the IRS’ new salary disclosure requirements.

The drug lobby in 2008 was required to disclose the salaries of 17 executives, including lobbyists. The year before, it needed only to disclose three employees’ salaries.

“The IRS defines compensation very broadly,” PhRMA spokesman Ken Johnson said. “It doesn’t include just base salary, it includes bonus and retirement benefits. ... It also captures deferred compensation, which people may or may not ever receive.”

Johnson’s own $654,000 annual compensation package was outlined in PhRMA’s most recent tax filing. In addition to Johnson’s pay, the organization also disclosed the total pay for lobbyists Bryant Hall ($651,000), Steven Tilton ($642,000), Richard Smith ($756,000) and Mimi Kneuer ($831,000).

“PhRMA’s compensation is benchmarked to the external market from which the organization is expected to recruit,” Johnson said.

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