Congressional investigators have uncovered a new breed of tax chiselers - deadbeat charities that shortchange the government and their own employees by failing to pay millions of dollars in payroll taxes.As tax-exempt organizations, or EOs, charities are excused from income tax liability, but are required to withhold and pay employment taxes for their workers. With one in 12 U.S. civilian workers now employed by exempt organizations, even a small percentage of non-compliance by charities can add up to a significant drain for federal tax collectors.
At a recent Capitol Hill hearing on the problem, auditors from the Government Accountability Office identified more than 1,280 charities that owed a total of $27 million in unpaid employment taxes, some of it dating back to 1988.
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