Testimony: Charitable Giving Problems and Best Practices

IR-2004-81, June 22, 2004

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Written Statement of Mark W. Everson, Commissioner of Internal Revenue,
before the Committee on Finance, U.S. Senate:
Hearing on Charitable Giving Problems and Best Practices

• INTRODUCTION
   
• DETERRENCE OF ABUSES WITHIN TAX-EXEMPT ORGANIZATIONS AND GOVERNMENT ENTITIES
  • The Need for Enhanced Governance
    • Specific Examples of Failures in Governance and the IRS Response
      • Credit Counseling Organizations
      • Compensation Issues
      • Terrorist Financing and Charities
  • Enhancing Governance – The Need for Better Coordination with the States and with Other Federal Agencies
    • Coordination with States
    • Coordination with Other Federal Agencies
  • Enhancing Governance – The Need for More Outreach
     
• DETERRENCE OF THIRD PARTY MISUSE OF TAX-EXEMPT AND GOVERNMENT ENTITIES
  • Abuse Involving Tax-exempt Accommodation Parties
    • Offsetting Foreign Currency Option Contracts
    • The S Corporation Transaction
    • Problems the IRS Faces in Addressing This Area
      • Disclosure
      • Lack of Sanction
    • IRS Response to Accommodation Party Strategies
  • Misuse of Tax-Exempt Entities by Donors and Investors
    • Section 509(a)(3) supporting organizations
    • Corporations Sole
    • Donor Advised Funds
    • Certain Employee Stock Ownership Plans (ESOPs)
  • In-Kind Donations to Charities—the Problem of Overvaluation and Other Issues
    • Intellectual Property
    • Conservation Easements
    • Vehicle Donations
       
• CONCLUSION

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