July 20, 2006 | Read Time: 1 minute
The Internal Revenue Service has asked nonprofit groups and others to comment on how the agency should enforce a law Congress passed last month to impose steep fines on charities, churches, and other tax-exempt groups that participate in abusive tax shelters.
The law, which covers tax years ending after May 17, requires nonprofit groups to disclose publicly whether they were involved in tax shelters that the tax agency decides are improper, and pay a penalty of up to 100 percent of any income resulting from the shelter.
In addition, a penalty of $20,000 will be imposed on any nonprofit official who knowingly approves a group’s involvement in an abusive tax shelter. A copy of the notice explaining the law is available online at http://www.irs.gov/pub/irs-drop/n-06-65.pdf.
Comments on both the law and on enforcement rules the revenue service plans to issue so charities know how to follow the law must be submitted by August 11.
They may be mailed to: CC:PA:LPD:PR (Notice 2006-65), Room 5203, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington, D.C. 20044. They may be sent electronically to: notice.comment@irscounsel.treas.gov (mention Notice 2006-65 in the subject line).
