In June, the Panel on the Nonprofit Sector (a panel convened by Independent Sector) issued its final report discussing the current state of the nonprofit sector and providing recommendations to Congress and the IRS to strengthen the transparency, governance, and accountability of charitable organizations. The Panel’s twenty-five members invited input from a wide variety of nonprofit representatives and conducted fifteen hearings to discuss the current issues.

The following is a brief list and discussion of the Panel’s recommendations. Most of the recommended law changes would primarily apply to organizations that currently file a Form 990 series return. Smaller organizations and religious organizations that are currently exempted from filing returns would generally be exempt from the recommended provisions.
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Senate Finance Committee hopes to have charitable reform bill out of committee in September. Senator Grassley originally planned to have the bill out in July, but a host of other legislation plus a delay in a report from Independent Sector pushed this timetable back.

IRS is in the process of performing 100 examinations of nonprofits involved in grants to foreign countries. These audits are seen as helping the IRS to create additional guidance in the area of international grant making to help prevent the possibility that charitable assets are used to fund terrorist activities overseas.
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