November 10, 2005 | Read Time: 1 minute
TAX WATCH
Atop official of the Internal Revenue Service says that the agency will take a hard look at charities over the next year to try to catch any organizations that give officials improper benefits or allow donors to take charitable deductions that are worth more than the gifts themselves.
Martha Sullivan, the head of the IRS office that oversees tax-exempt groups, said her department has hired 105 auditors in recent months as part of a “cultural shift” toward stricter and more thorough enforcement of the laws governing nonprofit organizations. The IRS has been criticized in the past for not policing charities effectively.
The revenue service will pay added attention to nonprofit hospitals that may pay excessive compensation, Ms. Sullivan said. At the same time, she said, the IRS will be checking to see if nonprofit hospitals provide benefits to society that set them apart from for-profit hospitals and justify their tax-exempt status.
Ms. Sullivan said her office will begin examining charities that may have allowed donors to take overly generous deductions for donations of facade and conservation easements. It will also check to see if donors are receiving improper benefits from their charitable trusts.
Continuing efforts it began last year, the IRS will track grants made by charities to overseas groups to determine whether organizations are doing enough to ensure that the money is not used to support terrorism. Ms. Sullivan said the IRS will continue to try to spot charities involved in abusive tax shelters.
