Tax Abuse Rampant in Nonprofits, IRS Says

[NVMojo]

Having worked for more than one of these ...I'd have to agree ...and there is so many ways and excuses as to why they are not held accountable. Most are for profit but we can't know that.

Tuesday, April 5, 2005; Page E01

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.

more...

http://www.washingtonpost.com/ac2/wp-dyn/A26388-2005Apr4?language=printer

[cap]

1. purge of democratic and left leaning organizations...

eom

[NVMojo]

2. I'd like to see a few crooked Repug non profits purged too ...

there is alot of this type of abuse in the healthcare industry. I've seen in the past.

[thedevilinthedetails]

5. That's already been the MO for Bushco since day one!

I work for a company that sells services to non profits (primarily left leaning non-profits). They have been harassed by the Bush admin since day one. Audits, audits, audits, budget cuts, grants awarded (but money never shows up). It's a real travesty.

I'm sure if you call yourself "faith based" you don't have any kind of trouble with this.

Now the IRS is going to start auditing? Great.

[tanyev]

3. Faith-based initiatives initiate tax evasion.

Not too surprising.

[DulceDecorum]

4. Cantor Fitzgerald UK Charitable Relief Fund: Charity defaulter

“A charity that has persistently failed to submit its accounts is unlikely to be a well managed, efficient organisation worthy of continued support,” the commission says. “People and organisations should think carefully before providing it with funding or supporting it as volunteers.”
http://www.timesonline.co.uk/article/0,,2087-1462227,00.html

Charity Defaulters in the EC Post Code Area
http://www.charity-commission.gov.uk/investigations/defaulters2.asp?pc=EC&area=LONDON%20(EC1-EC4)&page=4

Area of Benefit NOT DEFINED
http://www.charity-commission.gov.uk/registeredcharities/showcharity.asp?chyno=1088683

[toopers]

6. This is why we need to go to a national sales tax

Kill the income tax which the IRS admits it cannot patrol, and go to a national sales tax.

[Lindacooks]

10. BS

A national sales tax is probably the most regressive tax there is. The burden will fall mostly on the poor.

[elehhhhna]

7. If you collected the taxes dodgedby disguising private-church school ...

tuition as Tax deductable tithes, we could balance the budget.

Start there.

[Boomer]

8. No mention of sheer incompetence...

I'm surprised they can manage to abuse the tax system, since that kind of trickery implies a minimum level of financial astuteness.

As a graphic artist and web developer, I've worked for dozens of non-profits for over two decades now, and the vast majority of them squander money through sheer incompetence. They make bonehead decisions, or they miss crucial project deadlines because they can't get their act together, blow money on software they don't need and never use, blow even more money demanding marginally useful programming that gums up the works for the basic funcationality.

Key staff positions are held in perpetuity by employees without a professional level of qualifications. Critical technical issues must bend to the demands of office turf-wars. And all the time they're pissing money away, they keep stressing that they have a tight budget.

The list of business malpractice just goes on and on...

These aren't political/activist non-profits, btw, just your average run of the mill NPOs for foundations, mental and physical health issues, professional associations, etc.

[primavera]

9. Well, it's always easier to go after the little guy

...than to tackle the Enrons, Halliburtons, and MalWarts of the world. Why go after a trillion dollar corruption with powerful lawyer to defend themselves when you can go after some left-leaning charity with a staff of volunteers and a budget of $50,000?

[davsand]

11. How about auditing non-profit hospitals as a start?

You know who I mean--the ones charging uninsured poor people TWICE what they charge insurance companies for insured patients...Seems like a good place for an audit, in my opinion.


Laura