August 9, 2007 | Read Time: 1 minute
Kevin Brown, the Internal Revenue Service’s outgoing acting commissioner, says the agency is facing “difficult and fact-intensive administrative challenges” as it attempts to keep up with the constant changes in the structure and behavior of the nonprofit world.
Mr. Brown, in a letter to Sen. Charles E. Grassley, of Iowa, pointed to the explosion in popularity of donor-advised funds, the changing face of nonprofit hospitals and higher-education institutions, the expansion of commercial enterprises into the charitable sector, and complicated executive-compensation arrangements as areas of concern for the tax agency.
And, he added, the IRS has few tools to properly sanction nonprofit groups that fail to comply with federal laws that govern their behavior.
“Our remedial tools are largely ineffective,” Mr. Brown wrote. “The revocation of tax exemption — often the only available tool — is a remedy that may work a disproportionate hardship on innocent charitable beneficiaries, retirement-plan participants, or bondholders.”
Mr. Brown recently announced that he is leaving his position to become chief operating officer at the American Red Cross, which recently hired the former IRS commissioner Mark W. Everson as its chief executive. Linda Stiff, formerly the agency’s deputy commissioner for operations support, will take over as acting commissioner of the IRS.
