Proposals for Government Encouragement of Best Practices
Accreditation There would be an authorization of $10 million to the IRS to support accreditation of charities nationwide, in states, as well as accreditation of charities of particular classes (e.g., private foundations, land conservation groups, etc.). The IRS would have the authority to contract with tax-exempt organizations that would create and manage an accreditation program to establish best practices and give accreditation to members that meet best practices and review organizations on an ongoing basis for compliance. The IRS would have the authority to base charitable status or authority of a charity to accept charitable donations on whether an organization is accredited.
What does this mean for nonprofits? This proposal seeks to empower the IRS with the authority to require accreditation of nonprofits as a requisite to accepting charitable donations. The authors are seeking to empower the IRS to add another layer of compliance to the Form 990 proposals and five-year reauthorization of nonprofits. The staff discussion draft recommends the following oversight provisions:
- Establish Exempt Organization Hotline for reporting abuses by charities and complaints by donors and beneficiaries.
- Information sharing with State Attorneys General, the Federal Trade Commission (FTC), and the U.S. Postal Service for enforcement purposes, including referrals by the IRS and an annual report to Congress by the General Accounting Office of the results of such referrals. The staff discussion draft recommends that: This proposal would establish a hotline for anyone anywhere to file complaints about nonprofits and/or report abuses. Whether this is an anonymous hotline remains to be seen, but the authors appear to want to collect this information at a national level. How the complaints and claims would be investigated and by what agency remains to be seen. [Sarbanes Oxley for Non Profits, Peggy M Jackson]
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