Go to content Go to navigation Go to search

November 10, 2008

Independent Sector
IRS Officials Say Nonprofit World Must be 'Squeaky Clean'

Two key Internal Revenue Service officials today pledged that the agency will continue efforts to ensure that tax-exempt organizations are following federal laws.

“We are going to continue to insist that the sector is squeaky clean,” Douglas Shulman, the commissioner of Internal Revenue, told attendees at Independent Sector’s annual meeting, in Philadelphia.

Mr. Shulman said it was not the IRS’s job to determine how charities fulfill their individual roles, but explained his concern that the poor economic conditions could tempt tax-exempt organizations to bend the rules by, for instance, using money for capital expenses on operating needs.

At the same time, the agency is trying to use less onerous ways to encourage better compliance with the federal tax rules, Mr. Shulman said.

For example, the IRS is “checking up” on young nonprofit groups, instead of conducting a full-blown audit, to make sure they’re following rules, he said. That kind of action mirrors “soft” notices from the agency asking individual taxpayers to amend their tax returns if there is a problem with their original filings.

As new disclosure requirements go into effect after this year, with the revised Form 990, the IRS is considering beefing up disclosure rules for private foundations, said Steven T. Miller, head of the tax-exempt division at the tax agency.

That may not mean an overhaul of the current Form 990-PF for private foundations, though, because of staff and budget constraints, Mr. Miller said.

— Eric Kelderman

Monday November 10, 2008 | Permalink

Comments

1. I hope they will start with the Church of Jesus Christ of Latter Day Saints, a tax-exempt religious organization that has violated its nonprofit status by using significant influence to affect legislation in the State of California, specifically in promoting Proposition 8, which claims to amend the California state constitution to define marriage as one man and one woman in order to supersede a state supreme court opinion issued earlier this year.

   — Alexander Z.    Nov 11, 03:41 PM    #

2. Fortunately, Alexander, the LDS understand the fact that 501(c )(3) organizations, including churches, can participate in the democratic process through issue advocacy and lobbying activities without violating their tax-exempt status.

   — Patrick    Nov 11, 06:14 PM    #

Commenting is closed for this article.

Previous: For Nonprofit Groups, Time to Speak is Now
Next: Using Games to Solve Gritty Social Problems

---

Copyright © 2009 The Chronicle of Philanthropy