Senator Grassley Asks for Investigation of Charities' Fundraising - April 15, 2002 Vol. 3 No. 8

April 15, 2002 Vol. 3 No. 8:

Published: 04/15/2002

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Senator Grassley Asks for Investigation of Charities' Fundraising

Sen. Chuck Grassley (R-IA) has asked the Internal Revenue Service (IRS), the Federal Trade Commission and the Department of Justice to conduct an investigation of charities that raise large amounts of money, but use only small amounts for charitable purposes.

While the request specifically cites the Children's Wish Foundation International, which has spent only 8% of its funds on charitable purposes over the past 10 years, the investigation will look at the entire charitable sector.

The investigation will also look into the scrutiny that the IRS gives to charities' income versus expenses, the IRS's standards for revoking the tax-exempt status of misleading charities, the number of complaints that were referred to the IRS by states concerning charitable tax fraud, and whether the IRS should share information about its examinations of charities with states. The investigation will also focus on off-shore telemarketers who fraudulently solicit contributions to charities. Grassley has asked for the agencies to respond by May 2, 2002.