IRS Reports on Investigation of Charities
The Government Accountability Office has released a report (linked here) recommending that Congress take action to require more extensive e-filing of tax returns by charities. The report noted that in 2013, an extensive review of tax-exempt organization returns was conducted by the Exempt Organizations division of the IRS, covering, among others, about 1/2 of 501(c)(3) charities. While the IRS can only examine a small portion of such organizations, apparently due to staffing limitations, the GAO noted that increased e-filing, coupled with the additional data provided by the Form 990 as revised in 2008, enables the EO to take advantage of data-mining to more effectively spot issues on returns, thus, at least to some degree, offsetting the decrease in EO staff.
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