NCAA Executive Director Walter Byers said yesterday that the accounting firm that audits the NCAA and prepares its tax returns erred in stating on those returns that the NCAA does not lobby.
Byer's statement, in a press release, came in response to an investigation the Justice and Treasury department have been asked to make as a result of testimony this week before the House Commerce Committee's subcommittee on oversight and investigations.
The NCAA is a tax-exempt organization, As such, it is not prohibited from lobbying but cannot devote a "substantial" amount of its activities to lobbying, according to the IRS code. The code, however, does not define what is "substantial" and each case is determined individually, and IRS spokesman said.
Recent NCAA tax returns, which were signed by Byers, were checked "no" in the box for the answer to the question: "Has the organization attempted to influence any national, state or local legislation or participated or intervened in any political campaign?"
An IRS spokesman said a tax-exempt organiztion should answer "yes" if it has done any lobbying, even if it amounted to an insubstantial part of its activitiess.
The code does not provide a penalty for one wrong item, the spokesman said, but if the IRS finds "gross negligence, fraud, misrepresentation, etc, it could be grounds to revoke an organization's tax-exmpt recogniation."
In his statement, Byers said: "The (NCAA) definitely does engage in lobbying activities when appropriate in an effort to influence federal or state legislation affecting intercollegiate athletics, and it has never made a secret of this fact.
"There has never - and, I repeat, never - been any intention to obscure in any way the fact that on legislative issues which affect the welfare of intercollegiate athletics, the NCAA does indeed represent its member institutions in seeking desirable legislation and this is an activity approved and directed by the policy boards of the NCAA."
Harry Smith and Wayne Pieper of Francis A. Wright and Co., the NCAA's accounting firm, said yesterday they used a too-narrow definition of lobbying in answering the question. They said they were thinking in terms of a political campaign and relying on the "substantial" concept in checking the box saying the NCAA did not lobby.