Every year tens of thousands of charities and non-profit organizations apply to the IRS for tax-exempt status. Charities with less than $250,000 in total assets and less than $50,000 in donations in each of the past three years are eligible to file the "streamlined application", known as Form 1023-EZ. Although the IRS approves 94 percent of these applications, many of these charities may not be fully compliant with IRS requirements.
The IRS has many tools at its disposal to enforce the collection of unpaid tax debts, among them liens, levies, and even asset seizure. Beginning in late March, the IRS, in conjunction with the State Department, will have yet other weapon in its arsenal. Very shortly, the IRS will be forwarding the State Department information regarding individuals who have substantial tax deficiencies. Upon receipt of this information, the State Department can deny a taxpayer's passport application or renewal or place other restrictions on the taxpayer's passport.