Portal de Periódicos da CAPES

Report of the secretary — 1963

1964; Institute of Electrical and Electronics Engineers; Volume: 1; Issue: 7 Linguagem: Inglês

10.1109/mspec.1964.6500743

1939-9340

Haraden Pratt,

Electrical and Electromagnetic Research

from IEEE treasury funds.This contribution is con sidered appropriate in view of the broadened base of IEEE's involvement in the United Engineering Center.Your Board of Directors has under advisement a matter of financial importance in another category.On February 20, 1964, IEEE was notified by the Internal Revenue Service (after a number of years of consideration of the matter by the Service) that IEEE's annual exhibition, held as an integral part of its annual con vention, involved the operation by it of a business not substantially related to IEEE's tax-exempt purposes and that the net income therefrom, if any, is subject to federal tax.The Service requested IEEE to file tax returns with respect to that income for the years 1954 to date.IEEE, through its legal counsel, intends to contest imposition of the proposed tax by appropriate ad ministrative and legal action.The maximum amount of alleged tax liability, which, together with interest thereon, could be material, is not yet known since the matter is now being studied by IEEE's legal counsel and auditors.and IEEE has not received any statement of proposed adjustments of its tax liability from the Internal Revenue Service.Your Board of Directors considers it important that all IEEE members know that the possibility of taxation of convention-exhibition income was discussed at length by AIEE and IRE officers in the merger negotiations and, consequently, the recent action by the Internal Revenue Service was not unanticipated.Prudent stewardship over many years by the Boards of Directors of AIEE and IRE has provided an ac cumulation of surplus funds, which now stand the IEEE in good stead.As can be seen from the auditor's report, the capital resources of the IEEE are sufficient, by a substantial margin, to cover the expenditures, both authorized and potential, referred to above.Your Board of Directors will exercise great care to assure that the pres ent sound financial condition of the Institute is maintained.The membership will be promptly informed, through the pages of IEEE Spectrum, when the tax question men tioned here is finally settled.