United States: Senate Finance Committee Holds Hearing on Charity Oversight and Reform (Tax Exempt Organizations Advisory)

On Tuesday, June 22, the Senate Finance Committee heard testimony on "Charity Oversight and Reform: Keeping Bad Things from Happening to Good Charities." The Committee focused on a number of issues related to exempt organization tax law reform, including: corporate governance, enhanced technology (e.g. electronic filing of returns), compensation packages for board members and trustees, revamping Form 990’s, self-dealing and related party transactions, tax shelters, monitoring of charitable purposes through reapplication for tax-exempt status, information-sharing between the IRS and state charity regulators, and donor-advised funds.

One issue of concern raised by many witnesses and addressed by both Chairman of the Committee Senator Chuck Grassley (IA) and Ranking Democratic Member Senator Max Baucus (MT) was the disparate and adverse impacts that increased regulation could have on smaller, less sophisticated charity organizations vs. larger tax-exempt institutions and charities. At the close of the hearing, Senator Grassley stated that he intends to introduce legislative reform on these issues this fall or earlier.

Statements of Senators Grassley and Baucus, as well as written testimony for all witnesses are available on the Senate Finance Committee website (links posted below). Senator Grassley indicated that further written questions may be submitted to some or all of the witnesses. We will forward these questions and answers as they become available.

(General site link: http://finance.senate.gov/sitepages/hearing062204.htm )

Opening Statement of Senator Charles Grassley, IA:

http://finance.senate.gov/hearings/statements/062204cg.pdf

Opening Statement of Senator Max Baucus, MT:

http://finance.senate.gov/hearings/statements/062204mb.pdf

The Honorable Mark Everson Commissioner, Internal Revenue Service, Washington, DC

http://finance.senate.gov/hearings/testimony/2004test/062204metest.pdf

Mr. William Josephson, Assistant Attorney General-in-Charge, Charities, State of New York Office of the Attorney General, New York, NY

http://finance.senate.gov/hearings/testimony/2004test/062204wjtest.wpd

Mr. Mark Pacella, President, National Association of State Charity Officials, Harrisburg, PA

http://finance.senate.gov/hearings/testimony/2004test/062204mptest.pdf

Mr. Jay D. Adkisson, Editor of Quatloos.com and Director of Private Client Services Select Portfolio Management, Inc., Aliso Viejo, CA

http://finance.senate.gov/hearings/testimony/2004test/062204jatest.pdf

Ms. J. J. MacNab, CFP CLU QFP, Analyst, Insurance Barometer, LLC, Bethesda, MD

http://finance.senate.gov/hearings/testimony/2004test/062204jmtest.pdf

"Mr. Car", Confidential witness to discuss fundraising

http://finance.senate.gov/hearings/testimony/2004test/062204ctest.pdf

"Mr. House", Confidential Witness to discuss exploitation of charitable assets for private gain

http://finance.senate.gov/hearings/testimony/2004test/062204htest.pdf

Ms. Diana Aviv, President and CEO, Independent Sector, Washington, DC

http://finance.senate.gov/hearings/testimony/2004test/062204datest.pdf

Mr. Derek Bok, President Emeritus, Harvard University, Cambridge, MA

http://finance.senate.gov/hearings/testimony/2004test/062204dbtest.pdf

Mr. Willard L. Boyd, Professor of Law and President Emeritus, University of Iowa, Director, Iowa Nonprofit Resource Center, and Chair, The Iowa Governor's Task Force on the Role of Nonprofit Organizations in Iowa, Iowa City, IA

http://finance.senate.gov/hearings/testimony/2004test/062204wbtest.pdf

Mr. Rick Cohen, Executive Director, National Committee for Responsive Philanthropy, Washington, DC

http://finance.senate.gov/hearings/testimony/2004test/062204rctest.pdf

Mr. Herman Art Taylor, President and CEO, BBB Wise Giving Alliance, Arlington, VA

http://finance.senate.gov/hearings/testimony/2004test/062204httest.pdf

Mr. Rock Ringling, Managing Director, Montana Land Reliance, Helena, MT

http://finance.senate.gov/hearings/testimony/2004test/062204rrtest.pdf

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