IRS Panel Seeks Comments on Plan to Encourage Groups to Disclose Errors

An Internal Revenue Service advisory committee is seeking feedback from charity lawyers and other officials on whether the tax agency should create a new self-regulation program for tax-exempt organizations. The effort would give nonprofit officials a way to disclose errors or instances of wrongdoing in the hopes of receiving a lesser punishment for the offense than if the IRS had discovered the problems.

A formal "voluntary compliance" program would ensure more equal treatment of charities that come forward to report wrongdoing, according to Betsy Buchalter Adler, a San Francisco lawyer who represents charities and sits on the IRS advisory committee. Currently, it is up to individual IRS agents to decide how to treat charities that tell them about problems, and whether to waive or reduce penalties.

Among other questions, the survey by the IRS Advisory Committee on Tax-Exempt and Government Entities asks what subjects might be covered by such a program, and whether clients would be willing to pay a fee to participate.

A copy of the survey, which must be completed by the end of February, is available at http://www.zoomerang.com/survey.zgi?p=WEB225XPBGG55G.