Charities, foundations and other nonprofit organizations play a crucial role at all levels of society with the overarching goal of serving the public good. While this mission is admirable, the fact remains that nonprofits must comply with a number of tax regulations in order to keep their tax-exempt status. The IRS and state tax agencies expend substantial resources in order to ensure that nonprofit organizations are enriching the public, and not enriching themselves.
Tax Issues and Nonprofit Organizations
Reporting Offshore Holdings? Watch out for an Audit.
In recent years, the IRS has devoted vast resources to compel taxpayers to report and pay taxes on offshore assets. As a result of these efforts, the IRS has recovered billions in unpaid taxes. Perhaps the most widely-known tool the IRS uses is the Offshore Voluntary Disclosure Program, or OVDP. When taxpayers submit to the OVDP, they will have to file up to eight years of amended tax returns and Foreign Bank and Financial Account (FBAR) statements, while paying taxes, interest and a penalty of 27.5%, or up to 50%, of the highest balance of these accounts.
