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Charities used as tax dodges, IRS chief says; Many nonprofits, donors profiting through loopholes
COPYRIGHT 2005 The Washington Post Company ^ | April 5, 2005 | Albert B. Crenshaw

Posted on 04/05/2005 9:39:29 AM PDT by Liz

Charities and other nonprofits exempted from taxes because they serve a public purpose have become a hotbed of tax evasion and abuse, according to the head of the Internal Revenue Service.

"We can see that tax abuse is increasingly present in the sector," and unless the government takes effective steps to curb it, such organizations risk "the loss of the faith and support that the public has always given to this sector," Internal Revenue Commissioner Mark W. Everson said in a letter to the Senate Finance Committee detailing abuses his agency has found.

Everson said that the IRS is finding problems in virtually every type of tax-exempt organization. Nonprofits include not only charities, but colleges and universities, many hospitals, pension plans, trade associations and think tanks. In fact, eight of the 10 largest private employers in the District are nonprofits.

"Unfortunately, we have no precise way to gauge the revenue impact of these issues," Everson said, though he noted that the nonprofit sector, including pension plans and the like, now totals roughly 3 million entities controlling $8 trillion in assets.

Feds probe abuse "It's a seminal letter that rips off the rose-colored glasses with which we usually look at tax-exempt organizations," Senate Finance Chairman Charles E. Grassley (R-Iowa) said yesterday. "What's going on isn't a pretty picture in the harsh light."

The Finance Committee began examining the nonprofit sector last summer, finding, among other things, that localities and transit systems were collecting fees for allowing corporations to benefit from tax shelters designed to help finance public works. Several provisions of last fall's tax bill were aimed at abuses uncovered by the panel, but members have suspected, and Everson's letter confirms, that many more exist. Another hearing will begin today.

The findings have already sent alarms through the nonprofit community.

(Excerpt) Read more at msnbc.msn.com ...


TOPICS: Crime/Corruption; Culture/Society; Extended News; Government
KEYWORDS: irs; taxes; taxfraud; taxreform
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To: Liz

Chuck Grassley's been feeding at the government teet for too many years. He killed the car donation to charity program last year. Now he wants to find more ways to take your money. This guy needs to be put out to pasture.


21 posted on 04/05/2005 11:43:55 AM PDT by ClintonBeGone (In politics, sometimes it's OK for even a Wolverine to root for a Buckeye win.)
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To: Liz

I have been told that Grassley has been made aware of the issues and is hell-bent on getting something in the law - good, bad, or indifferent. Like so often happens in Congress, the hype of an issue makes simplistic solutions attractive, because they do not require as much technical understanding as the actual circumstances may warrant. You wind up creating more problems than what existed before the new law was made, but you go to the next election claiming a legislative victory, before the extent of the problems you created have become apparent. You could chalk up 3/4 of the IRS code to problems like what Grassley would allow to be created, and the years of additional, convoluted, legislation trying to undo them.

What is needed at this time is not a rush to new regulations, but more extensive economic, legal and tax analysis to understand the best way to employ regulatory changes that will achieve a good intent without destroying more good than what that intent represents.

Someone is looking too much at 2006 and not the public good.

I can only hope that enough House members will take a longer, more thoughtful look and kill any new regulation of non-profits until the issue has more facts to work with.


22 posted on 04/05/2005 11:44:28 AM PDT by Wuli
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To: Leatherneck_MT

Yup. Charity frauds, cash businesses, illegals paid under the table, dealers in contraband all get an extra 30-40% reward for being outlaws as things stand.

Under an NRST, all would pay, and only based on what they consume. It would make obeying the law much easier, and being a criminal 30-40% less attractive.


23 posted on 04/05/2005 11:49:31 AM PDT by eno_ (Freedom Lite - it's almost worth defending.)
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To: Liz; ancient_geezer
Everson said, though he noted that the nonprofit sector, including pension plans and the like, now totals roughly 3 million entities controlling $8 trillion in assets.

"And it really chaps my ass that we can't force them to turn it over to the nanny state. It's for the chilrun."

24 posted on 04/05/2005 11:53:47 AM PDT by dread78645 (Sarcasm tags are for wusses.)
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To: RepCath; Liz; IronJack; Grampa Dave; MeekOneGOP; Iris7; wkdaysoff; ApesForEvolution; EdReform; ...

ping!


25 posted on 04/05/2005 1:18:44 PM PDT by Jay777 (My personal blog: www.stoptheaclu.blogspot.com)
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To: All
You can join the fight against the ACLU and their ilk by becoming involved with and supporting the following organizations:

Alliance Defense Fund (ADF) - http://www.alliancedefensefund.org

Thomas More Law Center (TMLC) - http://www.thomasmore.org

American Center for Law and Justice (ACLJ) - http://www.aclj.org

The Rutherford Institute - http://www.rutherford.org/

Stop the ACLU Coalition (GREATLY ORGANIZED ACTIVIST SITE..PLEASE JOIN) - http://www.stoptheaclu.org


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Additional information:

The ACLU must be destroyed: Joseph Farah supports Boy Scouts, urges Americans to fight back

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ACLU fulfilling communist agenda

Revealing FACTS on the ACLU from its own writings

See how YOUR Senator or Representative ranks with the ACLU

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Anti-ACLU Page

The Center For Reclaiming America (petitions to congress)

The Becket Fund

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The Liberty Council

ACLU-Watch

ACLU (Know Thine Enemy)

My personal Anti-ACLU Blog


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Let me know if you would like to join my ACLU ping list


26 posted on 04/05/2005 1:19:36 PM PDT by Jay777 (My personal blog: www.stoptheaclu.blogspot.com)
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To: dread78645

Lookit, the point is this: until the system changes, if we have to pay, they have to pay.


27 posted on 04/05/2005 3:10:20 PM PDT by Liz ("There is no safety for honest men except by believing all possible evil of evil men." Edmund Burke)
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To: 2banana

Calling George Soros......


28 posted on 04/05/2005 5:21:11 PM PDT by smokeyb
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To: rconawa

http://www.pafairtax.org/calc.php


29 posted on 04/05/2005 5:22:50 PM PDT by smokeyb
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To: Liz
Is there a way to find out what tax status and organization has? I know that Veterans for Peace holds a 501(c)3. That status is supposed to be a charitable organization that is nonpolitical in natures. I have been looking at United for Peace and Justice. They state that a donation over 100 dollars is tax deductible. What other status allows for a tax deduction other than 501(c)3?
30 posted on 04/05/2005 5:30:06 PM PDT by armymarinemom (My sons freed Iraqi and Afghanistan Honor Roll students.)
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To: CyberAnt

PING -- FYI to what we were talking about yesterday re the veteransforpeace.org phony nonprofit.


31 posted on 04/05/2005 10:48:20 PM PDT by FairOpinion
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To: FairOpinion

Thanks - I'll check it out.


32 posted on 04/05/2005 11:12:16 PM PDT by CyberAnt (President Bush: "America is the greatest nation on the face of the earth")
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To: Liz

Bump.


33 posted on 04/05/2005 11:18:57 PM PDT by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
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To: Blood of Tyrants

Floyd D. Loop, the head of the Cleveland Clinic Foundation, a "non-profit" charity, was paid $1.6-million ofr the year 2000.


34 posted on 04/05/2005 11:22:59 PM PDT by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
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