Some charities are apparently using their tax-exempt status as cover to commit crimes, according to Iowa Senator Chuck Grassley. As chaiman of the Senate Finance Committee, Grassley is holding a hearing today in Washington D.C. to study alleged abuses by a variety of nonprofit groups, including hospitals, universities, the American Red Cross and the United Way. Grassley says it’ll be a “bombshell” as witnesses will include “insiders of charities” who will testify from behind screens and through voice scramblers about “terrible abuse.” Grassley says he’s seen reports of how executives in tax-exempt groups go to extremes like having the nonprofit group pay for a daughter’s wedding. Grassley says “It’s been alarming for me to see how powerful insiders have used the assets of charities to line their own pockets instead of the purpose of the charity, which in many cases is to help the needy.” Other examples include: buying private jets or taking European vacations on the tab of charitable donors. Grassley says reform is also needed in another area involving charities — when a person donates their car and writes off far too much on their taxes. He says the average car write-off is four-thousand dollars while the charity only gets 900-dollars. He says taxpayers should only be allowed to deduct what the charity gets for the car. Grassley says today’s hearing is also to lay the groundwork for legislative reforms that would curb fraudulent activity and that would tighten laws governing tax exemptions from charities and non-profits. He says the committee will seek to clarify many of the laws that govern non-profits, making it easier for the I-R-S to see and enforce violations.
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