This hearing will be the first in a series of hearings exploring tax-exempt issues and related IRS compliance efforts.
Tax-exempt organizations, especially charitable organizations, serve an important role in our society. From the local little league to non-profit hospitals to major universities, tax-exempt organizations are intertwined with our communities and economy.
Tax-exempt organizations also control vast resources. It is estimated that in 2008, charitable organizations had $2.5 trillion dollars in assets. In addition, tax-exempt organizations employ 10% of the workforce.
With so many Americans relying on, working for, and engaged in economic relationships with tax-exempt organizations, taxpayers should have confidence that tax-exempt organizations, especially charitable organizations, are operating efficiently and hopefully using good governance practices to maximize benefits provided to the community. To support these goals, it is important that this Committee review the substantive rules that apply to tax-exempt organizations, IRS compliance efforts, and the operations and governance of tax-exempt organizations.
In addition, Congress must ensure that the IRS has the information it needs to effectively interact with tax-exempt organizations. The IRS is charged with ensuring tax-exempt organizations are operating in furtherance of their tax-exempt purpose, and it is important that tax-exempt organizations and the IRS effectively communicate with each other to meet this goal.
With this in mind, in October of last year, I sent a letter to Commissioner Shulman to discuss a variety of current issues involving tax-exempt organizations and IRS compliance efforts.
Today, we have invited witnesses who can provide information from the tax-exempt sector’s perspective on the issues that were raised in my letter, such as good governance and compliance, the IRS College and Universities Compliance Project, and new reporting requirements for non-profit hospitals. In addition, we have a witness who can provide historical background about recent changes in tax-exempt rules and the general structure of the tax-exempt sector.
This is an opportunity to hear from the tax-exempt community on these important issues and learn what the current landscape looks like for tax-exempt organizations.