On the Record: Charity Laws Face Changes

10. Federal oversight of exempt organizations
The staff report proposes to extend federal control over nearly all aspects of tax-exempt organizations. The IRS and Tax Court would have the same powers as presently exercised by the states over exempt organizations’ operational decisions, boards of directors and finances. For example, the IRS could seek the removal of directors via the Tax Court. The Tax Court would have broad equity powers to remedy any detriment to an exempt organization resulting from any violation of the substantive rules.