Friday, April 25, 2008
In an article today, the Chronicle of Philanthropy reports on the efforts of Senator Charles Grassley who, yet again, takes a close look at nonprofit accountability as he considers whether nonprofits who skip lines or misreport information on informational tax forms should face steep fines for doing so. Below is an excerpt from the article:
Sen. Charles Grassley, the senior Republican on the powerful Finance Committee, says tougher penalties are possible if charities do not take steps to improve their reporting on the Form 990 informational tax return.
Mr. Grassley and his staff will be paying attention to what degree charities comply with upcoming changes to the Form 990. Many nonprofit groups will have to fill out an updated version of the form beginning in 2009.
Mr. Grassley said the new form — as well as the Pension Protection Act of 2006 — will make it easier for the public and the government to monitor the financial effectiveness of charities.
But, he said, more needs to be done.
“Time and again, problems at nonprofits come back to boards that aren’t independent or hands-on enough,” Mr. Grassley said. “Another challenge is making sure nonprofits are accurately reporting the amount of money going to their charitable purpose.”
The Chronicle further reports that, in addition to the steeper fines, "Congress could also revisit plans to calculate ratios that show how much of a charity’s revenue is used to fulfill its mission versus how much pays for executive salaries and fund-raising costs. " The story also reports that, "Steven T. Miller, commissioner of the IRS’s tax-exempt and government-entities division, said, . . . at a conference . . . held by the Georgetown University Law Center Continuing Legal Education Department, that the IRS is still considering similar plans."
See Article for the full story.