January 8, 2010 | Read Time: 1 minute
The Internal Revenue Service should collect information from small nonprofit groups about the kind of help they need to comply with tax-reporting requirements, then develop a plan to meet their needs, the agency’s advocate for taxpayers has recommended.
“Tax-exempt organizations must meet tax compliance and reporting obligations that can be surprisingly complex,” Nina E. Olson, the national taxpayer advocate, said in her annual report to Congress. “Smaller organizations, which constitute the majority of the tax-exempt sector, are more likely to face this complexity without the assistance of professional tax preparers.”
Only nine IRS employees are now primarily responsible for providing information and education to 1.8 million diverse tax-exempt organizations, the report says, and the agency has no way to obtain comprehensive information about which services the groups need or how they prefer to receive them.
Ms. Olson recommends the IRS design an “Exempt Organization Taxpayer Assistance Blueprint” — similar to one that was developed for individual taxpayers — to collect data and develop a plan to reach out to nonprofit groups. The data should be used to justify an increased budget for services to educate nonprofit groups, she adds.
