An open letter to Representative Tim MurphyPublished May 21, 2013 at 8:04 pm (Updated May 21, 2013 at 8:04 pm)
Dear Rep. Murphy;
I hope to encourage you and Mr. Kelly to take swift and decisive action in regard to the recent IRS scandal over improper exemption rulings.
Currently, the IRS is running more than a year behind in reviewing IRS tax exemption applications, which puts real nonprofit organizations at a significant disadvantage. Often, these organizations are the only companies offering services to needy segments of our community.
As someone who runs a nonprofit, and whom works with startup nonprofits, I can tell you that without exempt status these organizations cannot raise funds or keep offering the services they do.
When an IRS reviewer’s time is wasted by fraudulent applications it does irreparable harm to the nonprofit system, and, I suspect, to the economy on the whole.
The system of exempt application status review is not a complicated one. The code is clear on which companies qualify and which do not. It is posted directly on the IRS website here: http://www.irs.gov/pub/irs-tege/eo_determ_process080409.pdf, and it was further broken down on my own website here: http://orgspring.com/irs-501c3-application-for-tax-exemption-process-infographic/. More complex applications are handled every day by other government departments. Other than a clear abuse of power and poor management, there is no reason a tax exempt application should take a year or more to review.
Absent scandal and fraud, this process should take only a few weeks to complete. I hope this scandal sheds light on this fact, and helps return the system to a more consistent application review process.
Hopefully with your urging, and possibly your participation, Mr. Kelly can cut through the partisan rhetoric and blaming that is sure to come out of these congressional hearings, and actually clear the air of the wrongdoers so the response time for worthy applications can be cut down to more reasonable time frames.