Donating one’s time and money to charity is as American as baseball and apple pie. Charitable organizations serve an important link in our nation’s social structure, giving the less fortunate a helping hand and building avenues of opportunity between those that have and those that have not.
The good news is that charitable contributions are on the rise, exceeding $203 billion last year. The federal government also gets into the act by encouraging charitable giving via the tax code. And by exempting non-profit charitable organizations, also known as section 501(c)(3) entities, from paying federal income taxes, Uncle Sam clears the way to allow the lion’s share of donated money to benefit those it was intended to help. Unfortunately, even good works sometimes fall victim to the unscrupulous.
It appears some folks are bilking well-intentioned donors out of millions of dollars to line their own pockets. Disguising their scam under the guise of a tax-exempt charitable organization, these charity cheats apparently are using misleading fund-raising tactics, spending a pittance on legitimate charitable activities, and defrauding taxpayers who believe they are contributing to a worthwhile cause. A popular ruse exploited by scam artists appears to revolve around the wish-granting organizations which raise money to grant a wish to sick children.
It’s shameful and unconscionable that some people see fit to defraud taxpayers and the federal government under the pre-text of raising money for sick and dying children. Deceitful charities are a social blight, draining limited money from real needs. What’s more, the publicity generated from a rotten banana can spoil fund-raising efforts for the well-established do-gooders in the bunch. Even one anecdotal spoiler can plant the seed of doubt in people’s minds the next time they are approached for a donation. Some may even think twice during the next holiday season, wondering how much of the money they drop in the red kettle goes to those who need assistance paying for food, rent or rising utility bills.
That’s why I have called for an audit by the General Accounting Office, the investigative arm of the Congress, to check the tax records of tax-exempt entities to determine the size and scope of deceitful charities hiding among the high-performing charitable organizations.
The Internal Revenue Service charges 850 employees with overseeing more than one million tax-exempt entities, including more than 750,000 charities. It appears a number of charities with gross income exceeding $25,000 may be skirting their legal obligation to file an annual tax return that itemizes certain income, receipts and disbursements. What’s more, it doesn’t seem to carry any risk with the IRS if a charity’s tax form contains omissions or outright falsifications.
Charities that mislead the public are doing a grave disservice to this country. By calling for a congressional investigation, I hope to restore public confidence in the vast majority of charitable organizations that make a big difference in the lives of countless Americans. The IRS needs to root out those that game the system and shut them down for good.