In Wednesday’s (5/16) Chronicle of Philanthropy, Ben Gose reports on Wednesday’s “hearing held by the House Ways and Means Committee. The wide-ranging hearing, the first in a series of sessions expected to be held by a Ways and Means subcommittee that oversees the Internal Revenue Service, also featured a call to change the standards for getting charity status so that groups would have to prove they are making a positive contribution, rather than giving them an exemption simply because they avoid things like lobbying and engaging in untaxed business activities. … Rep. Xavier Becerra, a Democrat from California, said he worried that too many tax-exempt organizations were engaging in ‘noncharitable activities’ and that the IRS was ill-equipped to catch them. He cited statistics that he said show the IRS audited just 7,900 charities in 2008—less than 1 percent of the nation’s total. He also pushed [Roger Colinvaux, a former top aide to Congress’s Joint Committee on Taxation,] to illustrate how federal laws could be shaped to show a charity is engaging in ‘positive’ activities. … Mr. Colinvaux didn’t have a ready answer and said the IRS and Congress would need to ‘do more work in defining what a charitable activity is.’ ”
Posted May 18, 2012
