Executive Pay
March 22, 2007

Rooting Out Errors on Charity Tax Forms

The Chronicle of Philanthropy

By Elizabeth Schwinn
Washington

Now that it has completed its two-year investigation of executive compensation at nonprofit organizations, the Internal Revenue Service is weighing whether to impose new penalties on charities and foundations that fail to provide complete and accurate information about the salary and benefits paid to top officials.

In addition, the IRS says it will continue to examine nonprofit pay closely because its investigation showed what it considered to be a troubling number of errors by nonprofit organizations.

The study, which examined the informational tax returns of 1,826 charities and foundations, found that almost half of them had made mistakes.

Nearly 400 did such a poor job of filling out their forms that they had to file amended returns. The IRS sent written warnings to 115 organizations that it said engaged in improper practices, and imposed $21-million in penalties on officials at 25 groups it said had substantially overcompensated their leaders.

Under federal law, people who receive overly high pay, and those who approve such compensation — including board members of nonprofit organizations — are assessed penalties...

Full article: Rooting Out Errors on Charity Tax Forms

Copyright © 2007 The Chronicle of Philanthropy

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