In two March 2, 2007 letters to the IRS, Senators Baucus and Grassley requested more information on compliance and tax avoidance schemes associated with exempt organizations. Of interest to both Senators was the fact that the IRS listed abuses of charities and charitable giving as one of the “Dirty Dozen” tax matters for 2007. Their concerns, as set forth in their letters, include the use of charitable organizations as shelters for income and assets.
In their letters, Baucus and Grassley request a report from the IRS that includes compliance issues "involving tax-exempt and government entities and charitable contributions. This report should describe each issues, include information on the nature and scope of the problem, including the revenue at issue, provide a technical analysis of the IRS's position with respect to the issue, and what actions the IRS is taking to mitigate each issues". The Senators also express concern about corporate and individual abuse of the charitable contribution deduction rules.
The recipients of the letters, IRS Commission Mark Everson and Donald Korb, IRS Chief Counsel, were asked to report to the Senators by April 1.
This indicates a continued – and tightening – focus by the IRS and Congress on exempt organizations and those who contribute to them. For more information, contact Joe Smith, Sean Taylor, Marc Azar or Greg Cashman at 404.874.6244.
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