Tag Archives: Internal Revenue Service
May 15, 2012, 2:02 pm
A House subcommittee has announced that five nonprofit experts will testify at a hearing it has scheduled for Wednesday to examine several issues related to the Internal Revenue Service’s oversight of tax-exempt organizations.
They are Diana Aviv, president of Independent Sector; Roger Colinvaux, an associate law professor at the Catholic University of America; Joanne DeStefano, vice president for finance at Cornell University, who will be testifying on behalf of the National Association of College and University Business Officers (NACUBO); Bruce Hopkins, a nonprofit lawyer; and Michael Regier, a senior vice president at VHA, a nonprofit hospital cooperative.
Rep. Charles Boustany called the hearing. The Louisiana Republican heads the oversight subcommittee of the House Ways and Means Committee.
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May 9, 2012, 9:55 pm
A Congressional hearing has been scheduled next week to examine various tax issues affecting nonprofits, including Internal Revenue Service oversight of universities and nonprofit hospitals.
Rep. Charles Boustany Jr., a Louisiana Republican, called the hearing. He told The Chronicle this winter he was concerned the tax agency had not been aggressive enough in monitoring charity abuses.
The event, which will take place May 16 at 10 a.m., will be the first in a series of hearings on tax-exempt organizations planned by the oversight subcommittee of the powerful House Ways and Means Committee.
Mr. Boustany, the subcommittee chairman, said in a statement that the hearing would allow nonprofits to weigh in on certain questions he had raised in a letter he sent to the IRS last October.
They include IRS audits of universities in areas including excessive compensation and unrelated …
February 16, 2012, 4:34 pm
The Internal Revenue Service’s annual “dirty dozen” list of the top 12 tax scams in the United States includes schemes that involve charities—in particular, the misuse of noncash donations.
The IRS says that it’s investigating cases in which donors try to maintain control over donations or income from contributions of assets.
The tax agency says it has seen cases in which several charities claim the value of the same donated products.
“Often these donations are highly overvalued or the organization receiving the donation promises that the donor can repurchase the items later at a price set by the donor,” the IRS says.
The Pension Protection Act of 2006 imposed higher penalties for inaccurate appraisals of noncash gifts, says the tax agency.
Last month, the IRS imposed a fine on Food for the Hungry, an international charity, for allegedly misleading the public about the…
February 7, 2012, 6:36 pm
The Internal Revenue Service has developed an online database of 400,000 nonprofits that have lost their tax-exempt status for failing to file tax returns.
Previously, the IRS released information about groups that had lost their tax-exempt status only by state, which made it difficult to find groups by other criteria. The new Exempt Organizations Select Check is updated monthly and is on the same Web page as the agency’s main database of all nonprofits that can accept tax-deductible donations.
The tax agency in June unveiled a list of 275,000 organizations that had lost their tax-exempt status for failing to file tax returns for three consecutive years. Since then, about 125,000 more have been added to the list.
Most of the groups—63 percent—were charities. Eleven percent were nonprofit advocacy groups, and 7 percent were social and recreational clubs.
Groups can apply…
January 12, 2012, 1:52 pm
Nonprofits that automatically lost their tax-exempt status last year face unnecessary obstacles if they attempt to get reinstated, the Internal Revenue Service’s internal monitor said this week, as part of her annual report to lawmakers.
More than 385,000 nonprofits were knocked off the tax-exempt rolls after they failed to file their tax returns with the IRS for three consecutive years. But while the IRS allows groups to regain their tax-exempt status, Nina E. Olson, the tax agency’s national taxpayer advocate, says the process is marred by bureaucracy.
She says under the current process, groups can’t challenge whether the IRS was wrong to take away their status. Instead, they are simply told to send in the same form they originally submitted to seek tax-exempt status.
That form can take as long as seven months to process, and groups must then wait several more months before…
September 15, 2011, 9:32 am
Nonprofits are gearing up to fight President Obama’s plan to pay for his jobs bill in part by limiting charitable deductions. Mr. Obama wants to limit the amount all wealthy people can write off for charitable gifts as well as housing, medical expenses, and other items.
Nonprofit leaders say that a curb on deductions will stifle giving and that charity write-offs make up only a small percentage of the money the federal treasury loses in deductions by the wealthy.
In 2009, 46.4 million taxpayers claimed the itemized deduction, with the deduction for charitable donations totaling an estimated $158-billion, according to the Internal Revenue Service. That total accounts for 13 percent of all of the itemized deductions claimed that year. By comparison, taxpayers claimed an estimated $442-billion in deductions for mortgage interest and $432 billion for state and local taxes and…
August 10, 2011, 11:31 am
The Internal Revenue Service says it won’t comment on a demand from one of its former officials to clarify its policy on gift taxes for donors to politically oriented advocacy groups.
On Monday, as The New York Times reported, Marcus S. Owens, a Washington tax lawyer and the former head of the IRS’s tax-exempt division, sent a letter asking the tax agency to say whether it will ever enforce a gift tax on such donations. Mr. Owens says he worries the tax agency is bowing to pressure from Republican lawmakers who objected to the gift-tax enforcement.
Mr. Owen’s letter came after the IRS announced in July it was changing course and dropping any plans to enforce the rule, at least until Congress took action to force it to charge the tax or until the tax agency could spend time studying the issue and explain its views to the public.
The tax agency’s pursuit of the gift tax was…
July 18, 2011, 9:29 am
Independent Sector, a coalition of charities and foundations, is asking for ideas about how the Internal Revenue Service can improve the informational tax return for nonprofits, known as the Form 990.
People can submit ideas online, comment on other ideas, and vote for the best suggestion in the IS 990 Feedback Forum until July 25. The group is encouraging nonprofit employees who work in a wide arrange of areas—including those who focus on operations, finances, and legal issues—to submit ideas. Independent Sector will then use the comments in its recommendations to Congress and the Internal Revenue Service.
In June, the tax agency announced it was seeking public comments on the redesigned Form 990, which the IRS overhauled in 2008. The deadline for IRS comments is August 1.
July 7, 2011, 4:09 pm
In a surprise about-face, the Internal Revenue Service announced today that it has dropped any consideration of enforcing gift taxes on donations made to nonprofit advocacy groups.
Several big donors to advocacy groups had reported this spring that they had received questions from the IRS about whether they should have paid gift taxes, a move some Republican lawmakers speculated could have been the result of Obama administration pressure. Many advocacy groups, classified under Section 501(c)(4) of the tax code, spent heavily on political ads in the 2010 election cycle.
Steven T. Miller, a deputy commissioner of the IRS, said in a statement that because so many questions had been raised about the application of the gift tax, the agency would no longer spend time or money pursing its enforcement.
An IRS statement on the announcement added that it’s possible Congress would…
April 8, 2011, 7:51 pm
As tax season ticks down, the IRS is warning Americans not to abuse deductions for charitable giving.
The IRS, in its annual list of the year’s “dirty dozen” tax scams, says that attempts to abuse charitable organizations and deductions are among the most common efforts to skirt the tax code.
In some cases, this means that taxpayers are using charities to shield income from taxation, often by inflating the value of donated assets or income from donated property.
The tax agency said it has also been investigating schemes involving the donation of products and other noncash items by multiple groups that claim the full value for giving and receiving the same contribution. These donations are often highly overvalued—therefore allowing a bigger tax deduction—or the recipient allows the donor to repurchase the items at a later date.