Tax Debt: Some Combined Federal Campaign Charities Owe Payroll and Other Federal Taxes
GAO-06-887
Published: Jul 28, 2006. Publicly Released: Jul 28, 2006.
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Highlights
The continued success of the Combined Federal Campaign (CFC), which is administered by the Office of Personnel Management (OPM), is predicated on donor confidence that each donation reaches a legitimate charitable organization. The Ways and Means Committee's review of tax-exempt entities has led to concerns that charities listed in CFC are failing to remit payroll and other taxes to IRS as required by law. Specifically, GAO was asked to determine whether and to what extent (1) charities listed in the 2005 CFC have unpaid payroll and other taxes; (2) selected charities, their directors, or senior officers are abusing the federal tax system; and (3) OPM screens charities for federal tax problems before allowing them to be listed with CFC.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Personnel Management | To help ensure continuing donor confidence and improve control over participation in CFC, the Director of the Office of Personnel Management should direct the Director of CFC Operations to create and maintain a comprehensive database of all local, national, and international charities that participate in CFC. |
In 2008, OPM implemented the CFC comprehensive database of participating charities nationwide and began to verify with IRS the tax-exempt status of all new charities to be included in the CFC. These new verification procedures will help ensure that only legitimate tax-exempt organizations are approved to participate in the CFC.
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| Office of Personnel Management | To help ensure continuing donor confidence and improve control over participation in CFC, the Director of the Office of Personnel Management should direct the Director of CFC Operations to verify with IRS the tax-exempt status of all charities applying to be included in CFC. |
For the 2007 CFC campaign, OPM began to confirmed OPM began to verify the tax-exempt status of all charities applying to be included in the CFC. Local campaigns provided OPM with a list of all their participating organizations and new applicants. This information was entered into a database. OPM was provided with an electronic file from the Internal Revenue Service (IRS) listing the 501(c)(3) public charities in their Business Master File (BMF). This file was uploaded into the database. The Employer Identification Number (EIN) and Name of each organization in the database was compared to the IRS file to ensure that they still have tax-exempt status.
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Topics
Charitable organizationsDelinquent taxesFederal taxesTax exempt organizationsTax exempt statusTax violationsTax debtTaxesPayroll taxesPayroll records