Michael Roth: “The committee thought it was appropriate to provide prospective application for the codification of standards which must…”

“The committee thought it was appropriate to provide prospective application for the codification of standards which must be met for tax exemption. However, the committee expressly acknowledged the fact that a number of States had established entities that were operating as tax exempt organizations. The motivation for codifying the standards as part of the Internal Revenue Code was to help these entities and the Internal Revenue Service more easily apply the law. However, our report expressly states that tax exemption may be available to many such State-sponsored entities under present law and no interference was intended to be drawn from our action that the income of those entities was not already tax-exempt.”