IRS Screening of Tax-Exempt Organizations for Potential Terrorist Activities Found to be Inefficient and Incomplete
The Treasury Inspector General for Tax Administration (TIGTA), which provides independent oversight of IRS activities, recently issued a report finding that the Internal Revenue Service does a poor job in identifying tax-exempt groups that may have links to terrorists.
In its report, TIGTA found that:
The IRS does not systemically match filing data of tax-exempt organizations against a comprehensive list of potential terrorists to identify instances in which charitable and other nonprofit organizations may be linked to terrorist activities. Instead, IRS personnel manually review all tax-exempt documents and compare information from them to a United States Department of the Treasury terrorist watch list. This list, however, is incomplete compared to the more comprehensive terrorist watch list available for use by all Federal Government agencies. As a result of using a manual process and a limited terrorist watch list, the IRS provides only minimal assurance that tax-exempt organizations potentially involved in terrorist activities are being identified.As a result of its review, TIGTA recommended that the IRS develop and implement a long-term strategy to automate the matching of information provided by charitable organizations against a consolidated terrorist watch list to initially identify potential terrorist activities related to tax-exempt organizations. In addition, TIGTA recommended that the IRS should evaluate whether more comprehensive terrorist watch lists should be used in conjunction with the Treasury Department's SDN List "to improve the identification of organizations and/or individuals potentially involved in terrorist-related activities."
The PDF version of the report can be found at the following link: www.treas.gov/tigta/auditreports/2007reports/200710082fr.pdf.
Labels: OFAC
|posted by Douglas N. Jacobson| Permalink 
