Federal Undersight of Charities
According to this piece in the Chronicle of Philanthropy, the IRS has taken the rare step of actually revoking a charity's tax-exempt status because the IRS "investigated" the group, the San Francisco Neighbors Resource Center (SFNRC), and found that the directors of the charity were engaged in illegal activities. The IRS investigation revealed that the group received a $500,000 grant from the state of California to build a community center, but never built the center, and instead used intermediaries to funnel the money into the election campaign funds of then-California Secretary of State Kevin Shelley.
Sounds great, right? The IRS identifies a state charity doing bad things and swoops in from DC to close them down, protecting the good folks of California from corrupt local politicians abusing the system for their own personal and political gain.
Wrong.
The IRS revoked the SFNRC's non-profit status in early 2007 and made this decision public just last month. However, according to public court records, the state of California dissolved this charity in 2004 and Mr. Shelley was forced to resign in 2005! It took the IRS nearly three years from the date that California AG Bill Lockyer filed formal papers to dissolve the entire bogus charity and seize any assets not already illegally diverted to decide that maybe the group shouldn't be allowed to have a tax-exemption any more.
As always, my good friends, you're on your own.
Sounds great, right? The IRS identifies a state charity doing bad things and swoops in from DC to close them down, protecting the good folks of California from corrupt local politicians abusing the system for their own personal and political gain.
Wrong.
The IRS revoked the SFNRC's non-profit status in early 2007 and made this decision public just last month. However, according to public court records, the state of California dissolved this charity in 2004 and Mr. Shelley was forced to resign in 2005! It took the IRS nearly three years from the date that California AG Bill Lockyer filed formal papers to dissolve the entire bogus charity and seize any assets not already illegally diverted to decide that maybe the group shouldn't be allowed to have a tax-exemption any more.
As always, my good friends, you're on your own.
Labels: IRS, Kevin Shelley, Lockyer, San Francisco Neighbors Resource Center
posted by Trent Stamp at 8:36 AM
3 Comments:
Wow. I bet if I misfiled my tax return they wouldn't be nearly so slow about it.
...and who was at the helm of IRS at that time?
Exactly.
The IRS is a federal agency. It is slow and bureaucratic. What a surprise! It does not have the legislative mandate or the resources to monitor charities beyond the basics of issues related to tax-exempt status. Given the results in this case, do you want it to assume greater control? Doesn't this result show that regulation of charities should be first and foremost an issue for state governments?
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