Audited consolidating financial statements.

Independent Auditor's Report

To the Board of Directors

Tax Executives Institute, Inc. and TEI Education Fund

We have audited the accompanying consolidating statements of financial position of Tax Executives Institute, Inc. and TEI Education Fund (collectively, the Organization) as of June 30, 2010 and 2009, and the related consolidating statements of activities and cash flows for the years then ended. These consolidating financial statements ate the responsibility of the Organization's management. Our responsibility is to express ah opinion on these consolidating financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidating financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidating financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidating financial statements referred to above present fairly, in all material respects, the individual and consolidated financial positions of Tax Executives Institute, Inc. and TEI Education Fund as of June 30, 2010 and 2009, and the changes in their net assets and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Washington, DC

July 21, 2010

Consolidating Statements of Financial Position Years Ended June 30, 2010 and 2009 See notes to the consolidating financial statements. 2010 TEI TEIF Total Assets Cash and cash equivalents $ 834,963 $ 17,273 $ 952,236 --Note B Short-term investments-- 6,099,829 6,099,829 Notes B & C Accounts receivable 64,188 64,188 Due (to) from affiliate (4,882) 4,882 -- Prepaid expenses 55,945 55,945 Long-term investments-- 4,921,734 4,921,734 Notes B & C Investments held for 45,807 45,807 deferred compensation-- Notes C & D Property and equipment-- 452,021 452,021 Note E Total assets $ 12,469,605 $ 122,155 $12,591,760 Liabilities and net assets Accounts payable 102,853 -- 102,853 Accrued liabilities 168,383 168,383 Investment trades pending 991,371 991,371 payable Deferred revenue--Note F 2,945,348 2,945,348 Deferred rent--Note 1 234,162 234,162 Deferred compensation-- 45,807 45,807 Note D Total liabilities 4,487,924 -- 4,487,924 Commitment and contingency -- --Note I Net assets--unrestricted 7,981,681 122,155 8,103,836 Total liabilities and net $ 12,469,605 $ 122,155 $ 12,591,760 assets 2009 TEI TEIF Total Assets Cash and cash equivalents $411,877 $ 112,496 $ 524,373 --Note B Short-term investments-- 7,884,672 7,884,672 Notes B & C Accounts receivable 90,712 90,712 Due (to) from affiliate (3,897) 3,897 -- Prepaid expenses 429,472 429,472 Long-term investments-- 3,504,675 3,504,675 Notes B & C Investments held for 39,124 39,124 deferred compensation-- Notes C & D Property and equipment-- 148,639 148,639 Note E Total assets $ 12,505,274 $ 116,393 $ 12,621,667 Liabilities and net assets Accounts payable 106,816 -- 106,816 Accrued liabilities 142,485 142,485 Investment trades pending 974,665 974,665 payable Deferred revenue--Note F 2,722,204 2,722,204 Deferred rent--Note 1 177,045 177,045 Deferred compensation-- 39,124 39,124 Note D Total liabilities 4,162,339 -- 4,162,339 Commitment and contingency -- --Note I Net assets--unrestricted 8,342,935 116,393 8,459,328 Total liabilities and net $ 12,505,274 $ 116,393 $ 12,621,667 assets Consolidating Statements of Activities Years Ended June 30, 2010 and 2009 See notes to the consolidating financial statements. 2010 TEI TEIF Total Revenue Sponsorships $ 1,527,550 -- $ 1,527,550 Continuing education 1,431,000 1,431,000 Membership dues 1,359,906 1,359,906 Royalty 515,543 515,543 Publications 359,043 359,043 Investment income--Note C 125,938 47 125,985 Initiation Fees 88,400 88,400 Other 12,600 12,600 Management Fees--Note G (10,761) 10,761 -- Total revenue 5,409,219 10,808 5,420,027 Expense Program Services Continuing education 1,723,878 4,305 1,728,183 Committee and liaison 582,230 582,230 Membership services and 478,812 478,812 development Publications 399,301 399,301 Dues transferred to 200,550 200,550 chapters Total program services 3,384,771 4,305 3,389,076 Supporting services General and 2,361,702 741 2,362,443 administrative Total expense 5,746,473 5,046 5,751,519 Change in net assets (337,254) 5,762 (331,492) before special project expense Special project expense (24,000) (24,000) Change in net assets (361,254) 5,762 (355,492) Net assets, beginning of 8,342,935 116,393 8,459,328 year Net assets, end of year $...