Internal Revenue Service

The Internal Revenue Service is preparing to question some large 501(c)(4) advocacy groups about their political activities, signaling a possible investigation into whether the organizations are violating their nonprofit status, The Wall Street Journal reports.

Holly Paz of the IRS's tax-exempt division told a conference of certified public accountants Friday that the agency is working on a questionnaire to send to such groups. The agency has not set a date for when the queries will go out.

A complaint filed Monday charging a conservative nonprofit with tax fraud brings a new legal twist to the thorny issue of what constitutes lobbying and how much charities can engage in it.

The number of charities and foundations registered with the Internal Revenue Service fell by 16 percent in 2011, mostly because more than 272,000 organizations lost their tax-exempt status after failing to follow the law by filing informational tax forms.

New figures released by the tax agency show that the number of groups classified under Section 501(c)(3) of the Internal Revenue Code totaled nearly 1.1 million in 2011, down from nearly 1.3 million in 2010.

The chief executive of GuideStar, a nonprofit that puts online a wealth of data about charities, will step down from his post later this year, the organization announced.

Bob Ottenhoff, who has led GuideStar for a decade, will leave once his successor is in place. The organization is now conducting a search for a new leader.

Check out recent posts from Tony Martignetti and NTEN.

Rick Santorum and his wife, Karen, gave 2.2 percent of their income to charity from 2007 to 2010, according to tax returns the candidate for the Republican presidential nomination released last night to Politico, a newspaper that covers politics.

The Santorums gave 1.8 percent of their $930,227 in total income to charity in 2010. In 2009, they donated 2.7 percent of their $1,127,266 total income.

The tax returns do not disclose the names of the organizations they supported.

Does the live free or die philosophy of the New Hampshire Legislature pertain only to organizations making a profit? That's what officials at many of the state's nonprofit organizations are beginning to wonder after the Senate passed a bill mandating that state charitable organizations send at least one board member to a training session with a heavy focus on fiscal management and ethics.

The bill requires that one board member go through the training every other year, with penalties to be named later by the charitable trusts unit of the state Justice Department.

Nonprofits that automatically lost their tax-exempt status last year face unnecessary obstacles if they attempt to get reinstated, the Internal Revenue Service’s internal monitor said this week, as part of her annual report to lawmakers.

More than 385,000 nonprofits were knocked off the tax-exempt rolls after they failed to file their tax returns with the IRS for three consecutive years. But while the IRS allows groups to regain their tax-exempt status, Nina E. Olson, the tax agency’s national taxpayer advocate, says the process is marred by bureaucracy.

Americans gave about $290 billion to charity last year. That was $10 billion more than the amount of charitable giving in 2009. The estimates are from the Giving USA Foundation and its research partner, the Center on Philanthropy at Indiana University.

The largest share of charitable giving goes to religious groups. Giving USA says the received 35 percent of all donations in 2010. Schools and other education-related organizations were second on the list. They received an estimated 14 percent of all charitable giving last year.

Tax-exempt organizations with January and February filing due dates will have until March 30, 2012, to file their annual returns, the Internal Revenue Service announced.

The IRS is granting this extension of time to file because the part of the e-file system that processes electronically filed returns of tax-exempt organizations will be off-line during January and February. The agency stressed that the rest of the e-file system will continue to operate normally and urged all individuals and businesses to choose the accuracy, speed and convenience of electronic filing.