According to a new report by the Treasury Inspector General for Tax Administration (TIGTA), IRS managers overseeing tax-exempt bond enforcement have reported that several multi-million dollar penalties have been assessed against bond underwriters and counsel involved in abusive transactions under Section 6700 of the US tax code.
The report, released on Friday, concluded that further development of the IRS Tax-Exempt and Government Entities Division's strategy for abusive tax avoidance transactions is needed.
“This important new report highlights the need for the IRS to take aggressive action in identifying and dealing with tax shelters in the tax-exempt area,” commented Senate Finance Committee Chairman, Charles Grassley.
The issue of governance in the non-profit sector is currently being investigated by Senator Grassley, who is considering a legislative response to the problem through the increase of penalties and tightening of disclosure requirements.
“Along with seeking stepped-up IRS enforcement, the Finance Committee is actively reviewing current law to determine whether penalties and disclosure are adequate to deter and prevent tax-exempt organizations from participating in tax abusive transactions,” he stated.
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