WSJ.com - IRS's Tougher Stance Faces Resistance:
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"One focus of Mr. Everson's enforcement efforts has been tax-exempt organizations. He has increased the number of personnel overseeing tax-exempt and charity organizations, and plans to assign more if he gets sufficient funding. The IRS is scrutinizing half the tax-exempt credit-counseling industry, as measured by asset size, he says.
The examination of tax-exempt organizations stems from the sector's huge growth, Mr. Everson says. There are 1.8 million nonprofits with $3 trillion in assets, up from 500,000 such groups in 1995. The IRS, he says, is seeing an increase in questionable behavior, including partnerships with for-profit businesses that muddy such issues as financial relationships and governance. Abuses include individuals taking large tax deductions for donating worthless automobiles to charities or 'donating' large sums of money to organizations and then getting 'loans' in return."
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