Friday, November 2, 2012

No Churches Have Been Audited by the IRS in Over Three Years

We all subsidize tax exempt organizations. Churches and public charities (nonprofits classified as "501(c)3" by the IRS) receive donations that are tax deductible for the donor. They are prohibited from "electioneering." They can neither endorse nor campaign for political candidates or parties. Referendums and ballot initiatives are classified as lobbying. They are limited to an "insubstantial" amount of lobbying (about 5% to 15% of total activities). Yet, a Bush appointed commissioner and a rule making failure have put church audits on hold.

Our tax dollars at work in the bureaucracy 
  1. According to a law passed in 1984, IRS audits of churches require the approval of a regional commissioner or above.
  2. Since 1996, the office of regional commissioner has been eliminated.
  3. The IRS designated someone. However, in 2009 a federal court determined, in a Minnesota matter, that the designated person was not of sufficient rank.
  4. Nobody at the IRS seems to know why a higher ranking official has not been designated or, for that matter, why the Commissioner of the IRS has not been approving audits in the interim.
There is some good news

IRS commissioner Douglas Shulman will be stepping down on November 9 at the end of his five year term. Hopefully, President Obama will appoint someone who will pay more attention to this issue.
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