Sweeping Legislative Changes for Nonprofits Move Closer to Reality

Leadership of nonprofit, tax-exempt organizations should take particular notice of the tenor of many of the comments of those testifying on April 5, 2005 at the Senate Finance Committee Hearing on oversight of charities. Common themes expressed included the lack of effective enforcement vehicles available to the IRS to police tax-exempt organizations; perceived lax oversight exercised by governing boards of nonprofit organizations; concerns with respect to excessive compensation paid to executives of tax-exempt organizations; deficiencies in Form 990 reporting by tax-exempt organizations; and perceived excess in travel, entertainment and other related expenses of tax exempt organizations. The nonprofit health care industry received specific criticism at the hearings.