We’re on our own checking charities – one scammer creates 76 IRS-approved fakes
As we say in our Savvy Donor series, it’s up to donors to evaluate charities. Although most charities must register with the IRS and file annual information returns on Form 990, the IRS is not set up to evaluate or monitor charities.
Want proof? Recently a single scammer used the same Staten Island, NY, address to obtain tax-exempt status from the IRS for 76 fake charities — as reported by The New York Times.
The report notes that the scammer played with the names of well-known charities, calling one the “American Cancer Society of Michigan” and another “the United Way of Ohio” — and raised money through online giving platforms that let users choose among IRS-approved charities.
The IRS has now come under fire in Congress for lax oversight of the process for approving tax-exempt status. A letter from House Ways and Means Oversight Subcommittee chairman Bill Pascrell demands, among other things, to know “What happens with respect to an application when the IRS is notified of concerns by individuals, the media, law enforcement, state tax agencies, or other organizations?” Read or download the letter.