IRS Moves to Weed Out Deadwood Charities

Donors should get a much clearer picture of how secular charities handle their money, and which charities are legitimate, due to new rules imposed by Congress. Now, even the tiniest nonprofit, like garden clubs with a few hundred dollars of income a year, must file simple disclosure statements online with the IRS.

Under the new law, the Pension Protection Act of 2006, any nonprofit (except virtually all religious organizations) that fails to file within three years will automatically lose its tax exemption, said Lois G. Lerner, the IRS's director of exempt organizations.

Read more of this 11.12.07 New York Times article by David Cay Johnston.