House Committee on Ways and Means Hearings Identify Tax-exempt
August 2007
On July 24, 2007, the House
Committee on Ways and Means held hearings on the oversight of tax exempt charitable
organizations. These hearings were attended by various leaders addressing the current
state of the tax-exempt sector of the economy. The United States Government
Accountability Office testimony on Nonprofit Sector - -Increasing Numbers and
Key Role in Delivering Federal Services - identified several policy issues that
have emerged:
- Coordination and
Collaboration -- the increasing importance of collaboration between all levels
of the government in nonprofit organizations
- Internal Governance Issues
-- the need to strengthen internal governance of nonprofit organizations
- Capacity -- the need to
improve smaller nonprofit organizations' capacity to address weaknesses and
finances, administration, and human capital
- Nonprofit Sector Data -- the
need for improved data on the sector's size financial status, and funds from
federal resources
- Administrative and Reporting
Requirements -- the many requirements to be accountable which, while important
and necessary, require information in different formats and with increasing
complexity
- Fiscal Challenges for
Nonprofits -- the instability of some nonprofits' financial position
This testimony is very
informative and helps you understand the magnitude of the nonprofit sector in the
United States
economy. From recent years' data, the nonprofit sector held $3 trillion in
assets and $1.4 trillion in revenues, equaling approximately 12% of the
nation's gross domestic product. In addition, the number of charitable
organizations has almost tripled over the last two decades.
In addition, Steve Miller,
with the Internal Revenue Service (IRS), discussed key issues that the IRS is addressing
with regard to the tax-exempt sector. It's important that your management team
be aware of these documents.
You can link to these Ways
and Means documents by clicking here.
Transparency, Accountability
and Reporting - For tax-exempt organizations, this is the way the business of
tax-exempt organizations must be governed. Your RSM McGladrey business advisors
are here to help you meet these increasing challenges. If you would like to
discuss these issues further as they relate to your organization, please
contact one of our advisors at the end of this news brief.
Author: Ginny Striegel is a
tax director based in RSM McGladrey's Des
Moines office who works exclusively with tax-exempt
clients across the country. If you have any questions regarding the information
in this article, please contact Striegel at 515.281.9272 or ginny.striegel@rsmi.com
