IRS MAY HAVE MISSED 15,000 TAX-EXEMPT GROUPS

Washington, D.C. -- The Internal Revenue Service identified 279,500 tax-exempt organizations that did not file a return or notice for three consecutive years, but it potentially did not identify more than 15,000 organizations that failed to file for three consecutive years, according to a new report from the Treasury Inspector General for Tax Administration, which noted that, due to a programming error, the IRS did not notify them that their tax-exempt status had been automatically revoked.

The Pension Protection Act of 2006 requires the service to maintain a list of organizations whose tax-exempt status has been automatically revoked for failing to file a return or notice for three consecutive years. At the IRS's request, TIGTA reviewed the service's readiness to handle those provisions, and confirmed that, in most cases, the IRS appropriately identified organizations that did not file a return or notice for three consecutive years.

However, TIGTA auditors also determined that programming changes were incomplete and did not potentially identify more than 15,000 organizations that failed to file for three consecutive years. As a result, these organizations were not informed that their tax-exempt status had been automatically revoked.

 

INDIRECT TAX INCREASES TREND DOWN THIS YEAR

New York -- The number of indirect tax increases fell from 154 in the first quarter of 2011 to 107 in the first quarter of this year. The latest ONESOURCE Indirect Tax rate report from Thomson Reuters found that the total number of state, county and city sales tax increases in the U.S. declined from 100 to 90, while the number of value-added tax increases globally dropped from 54 to 17. There were 30 percent fewer indirect tax increases reported globally in the first quarter of 2012 than in the same period in 2011.

The global Q1 2012 report found that in the U.S., the average state sales tax was 5.48 percent, down from 5.52 percent in Q1 2011.

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