December 20,2007

Grassley: More Transparency from Non-Profits is Welcome, IRS Makes Good Effort


To: Reporters and EditorsRe: IRS releases revised form for non-profitsDa: Thursday, Dec. 20, 2007

Today the Internal Revenue Service (IRS) issued a final updated version of Form 990, thereturn that charities and other tax-exempt organizations are required to file annually. Sen. ChuckGrassley, ranking member of the Committee on Finance, had urged an updated Form 990 and moredisclosure in certain areas, such as non-profit hospitals and their definition of community benefit.Grassley has conducted oversight of tax-exempt policy for the past five years. He made thefollowing comment on the final revised Form 990.

“This means more consistent transparency from tax-exempt groups. Under the current setup,some groups are very transparent and others are secretive or lackadaisical about what they file.For the most part, this form is the only document tax-exempt groups have to file with the IRS inexchange for their billions of dollars in tax breaks. That form should be useful. Donors andtaxpayers need reliable information to gauge how well these groups serve their charitable purpose.More transparency and accountability will help keep the charitable sector going strong. The IRShas done a good job of bringing about more reporting across the board and recognizing that the taxexemptsector is a growing part of the economy.

“I’m glad the IRS is seeking more reporting about endowments, including universityendowments. Universities are tax-exempt, and the of their tax-free endowments should bepublic. That’s of interest to the public as tuition costs go through the roof. On non-profit hospitals,it’s good to see a clearer, more uniform definition of community benefit. Some hospitals use a veryloose definition, and this will help them focus. I’m disappointed that the revised Schedule H forhospitals will be voluntary for the first year, but I’m confident that a lot of hospitals will use theform anyway. As we saw with the Catholic Health Association, non-profit hospitals can accomplisha lot of good on their own. I’m also disappointed that the IRS isn’t doing more to make sure nonprofitsare accurately reporting the amount of money going to their charitable purpose. I justsubmitted testimony at a House hearing on veterans charities that spend more money on salaries andfund-raising than helping veterans. The IRS easily could have done more to help donors readilyunderstand where their money goes. I plan to revisit that issue.”