The House Ways and Means Subcommittee on Oversight held a hearing on Tax-Exempt Charitable Organizations on July 24, 2007. Among the witnesses testifying before the Subcommittee were Steven T. Miller, Commissioner, Tax Exempt and Government Entities Division (TE/GE), IRS; Gregory D. Kutz, Managing Director, Forensic Audits and Special Investigations, Government Accountability Office (GAO); Diana Aviv, President and CEO, Independent Sector; and Steve Gunderson, President and CEO, Council on Foundations.
The Subcommittee questioned the witnesses about a June 2, 2007 GAO Report stating that "nearly 55,000 exempt organizations had almost $1 billion in unpaid federal taxes as of September 30, 2006." Miller responded that his office lacks sufficient resources to properly monitor all charities and requested Congress’ support for the President’s 2008 budget which provides for a 10.8 percent increase to TE/GE. He also identified five areas of concern: (1) charitable contribution overvaluation, (2) charities established to benefit the donor, (3) a blurring of the line between tax-exempt and commercial sectors, (4) executive compensation and inurement, and (5) regulation and reporting of political activities.
Both Aviv and Gunderson discussed the impact of, and problems created by, the Pension Protection Act of 2006 and called on Congress to expand and extend the IRA charitable rollover. Aviv further called for creation of a Small Nonprofit Administration, similar to the Small Business Administration, and a mandatory online information return filing requirement. Gunderson elaborated on two areas in which philanthropy can improve: risk-taking and championing diversity.
Click here for the Hearing Archives.
Click here for the Independent Sector press release.
Click here for the Council on Foundations press release.