Tax-exempt groups rack up tax debts

Tens of thousands of tax-exempt groups racked up $875 million in tax debt by 2012, according to a new federal audit.

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Treasury’s inspector general for tax administration found that 64,200 organizations — or around 4 percent of all tax-exempt groups — had a tax liability.

But while many of those groups owed a minor amount, roughly 1,200 of them had debts of more than $100,000. Nine groups collected their debts over more than a decade, to the tune of a combined $5.5 million.

Tax-exempt groups don’t have to pay income taxes, but are on the hook for payroll taxes.

As the inspector general noted, roughly 25 of the groups with the greatest tax liabilities also got $148 million from the government over a three-year span, including Medicare payments, which are supported by payroll tax revenues.

The IRS’s exempt organizations division — the group at the center of the agency’s Tea Party controversy — “was generally not aware of the behavior of the organizations,” the inspector general said. That’s because another IRS unit was in charge of bringing in the tax debts.

In any event, the IRS doesn’t have any power to take away a group’s tax-exempt status for failing to pay taxes.