Senator Max Baucus (D-MT) has made another noteworthy formal communication to Treasury Secretary Paulson, this time along with ranking Finance Committee member Charles Grassley (R-IA). The leaders of the Senate Finance Committee have urged Treasury to update Form 990, the federal tax form nonprofits file each year to report tax information, so that the financial operations of nonprofits can be better understood. There is a particular focus of concern on scrutinizing hospitals and universities. "Large, complex institutions, such as hospitals and universities, require more detailed questions tailored to the specifics of their fields if transparency and openness are to have real value." The letter from Baucus and Grassley addresses seven areas they feel are of particular importance in regards to the oversight of charities. These include endowments, related organizations, joint ventures, governance, fund raising, hospitals, and executive compensation. This request should be no surprise; given the two Senators past focus on any inappropriate practices of tax-exempt organizations.

Meanwhile, an overhaul of the Form 990 is expected to be released in June with a period for comment. The draft will probably include more detailed questions for charities. Is the letter any indication that the two entities worked together, or that the project will be completed earlier? This blog post at charitygovernance.com agrees with Baucus and Grassley's suggestions. "Baucus and Grassley also urge Paulson to make sure that the new form permits the IRS to more effectively and efficiently audit tax-exempt entities. No one should disagree with that sentiment. The two senators are concerned in particular with UBIT and tax-exempt bonds."