Action Being Taken to Prevent Refundable Payments of Social Security and Federal Unemployment Taxes by Charitable Organizations

GGD-76-102: Published: Feb 1, 1977. Publicly Released: Feb 1, 1977.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Many charitable organizations are exempt by law from paying social security and unemployment taxes. However, the exemption from social security taxes can be waived if a written request or waiver is filed with the Internal Revenue Service. If a waiver was not filed and payments were made, the organization could withdraw any payments accepted over the last 3 years. Transcripts of the employment tax payments of 1,000 randomly selected charitable organizations were examined and waiver certificate files were reviewed. Taxpayer case files, pertinent statutes, and regulations were also examined.

In 1975 about 12,700 to 20,200 organizations which had not waived their exemption paid social security taxes ranging from $118 to $369 million. Because of Internal Revenue Service administrative errors, these amounts were all refundable. Legislation signed in October 1976 designed to correct the problem stated that if charitable organizations have made social security payments for three consecutive calendar quarters, they could not withdraw their money whether or not they failed to file a waiver. Pursuant to the law, the Internal Revenue Service is taking actions which will also correct the lesser problem of improper unemployment tax collections.

Oct 19, 2020

Sep 23, 2020

Aug 31, 2020

Jun 29, 2020

Jun 16, 2020

May 1, 2020

Apr 30, 2020

  • tax icon, source: Eyewire

    Priority Open Recommendations:

    Internal Revenue Service
    GAO-20-548PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.

Apr 1, 2020

Mar 2, 2020

Feb 26, 2020

Looking for more? Browse all our products here