- March 2011
- New Tax Deal Lowers Estate Tax and Extends IRA Charity Break
- Democrats Turn Back Republican Health Care Repeal Amendment
- House & Senate Committees Hold Hearings on Tax Reform
- Obama's Budget Plan Calls for Cut in Charitable Deductions
- Republicans Propose Big Federal Budget cuts That Impact Non Profits
- Many Nonprofits Face Lawsuits over Madoff's Fraud
- Senator's Investigation into Ministries Leads to Tax Review
- Officials Say Oregon Charity Shifted Millions to Iran
- Budget-Strapped Cities Charge Nonprofits New Fees
- Nonprofits in CA Face More Fiscal Strain
- Virginia A.G. Says No State Funds Can Legally Go To Charities
- NV Court Rules Donor-Advised Funds Can Ignore Donor Advice
- CT University Fights to Preserve Donor List Confidentiality
- OR Sues Veterans Charities Accused of Misusing Funds
- The IRS Steps Up Scrutiny of Nonprofits
- IRS Investigates CA Hospital's Charity's Nonprofit Status
- Automatic Revocations Will Reshape Nonprofits Beyond 2011
- Postal Rates to Increase in April 2011
- All Pages
The IRS Steps Up Scrutiny of Nonprofits
The Internal Revenue Services says it plans greater scrutiny of a wide range of charity activities, including loans nonprofits make to top officials and whether they paid sufficient employment taxes.
The plans follow stepped-up efforts over the past few years to oversee nonprofits. Figures released by the Internal Revenue Services show its audits of charities increased from about 7,800 in 2008 to just over 10,00 in 2009, a jump of about 30 percent. In 2010 the numbers of audits jumped 12 percent, to approximately 11,500.
The greater oversight is largely the result of an increased number of IRS employees. IRS officials also said their enforcement efforts benefited from increased collaboration with the Social Security Administration and with state regulators, yielding valuable electronic data that allowed them to spot organizations that were trying to avoid paying employment taxes.
The IRS has been studying the employment-tax reporting practices of about 4,000 tax-exempt organizations each year since 2007. The agency was able to pinpoint organizations that reported paying wages to employees but didn’t file a federal form to report employment taxes. Other showed compensation for officers on their informational tax forms but didn’t file wage or employment tax documents for those workers.
Agents also found loans to charity officials that were not correctly reported on the organizations’ Form 990 in several cases and assessed more than $5-million in penalties.