"IRS not doing enough" to fight terrorism

America's tax agency needs to do a better job of identifying sham non-profits that funnel money to terrorist organizations. At least that's the conclusion of an audit report published by the Treasury Inspector General for Tax Administration. "IRS investigators look at paper documents and use a limited terrorist watch list to pinpoint possible ties between charitable and other nonprofit groups and terrorists," wrote Jim Abrams in his summary of the report for the AP wire service.

The key issue is that the IRS could be doing more to fight terrorism. TIGTA highlighted their main findings:

"The IRS does not systemically match filing data of tax-exempt organizations against a comprehensive list of potential terrorists to identify instances in which charitable and other nonprofit organizations may be linked to terrorist activities. Instead, IRS personnel manually review all tax-exempt documents and compare information from them to a United States Department of the Treasury terrorist watch list. This list, however, is incomplete compared to the more comprehensive terrorist watch list available for use by all Federal Government agencies. As a result of using a manual process and a limited terrorist watch list, the IRS provides only minimal assurance that tax-exempt organizations potentially involved in terrorist activities are being identified."

TIGTA "provides independent oversight of IRS activities" and conducts audits and special investigations of the tax agency. The audit report is Screening Tax-Exempt Organizations’ Filing Information Provides Minimal Assurance That Potential Terrorist-Related Activities Are Identified (Highlights | Full Audit Report).

More information:

• IRS not doing enough to link tax-exempt groups and terrorists, report says (North County Times)
• Audit criticizes IRS screening of non-profits (USA Today)
• Treasury Inspector General for Tax Administration