If you believe a tax-exempt organization—such as a charity or nonprofit—is misusing funds or violating federal tax laws, you can report it directly to the Internal Revenue Service (IRS). The IRS relies on public reports to identify fraudulent or noncompliant behavior within the nonprofit sector. Reporting helps protect donors, maintain transparency, and ensure that charitable organizations continue to operate for the public good.
When to Report Tax-Exempt Organization
You should consider reporting a tax-exempt organization if you suspect:
- Misuse of charitable assets, such as personal spending or unauthorized benefits
- False or misleading statements on Form 990 or other IRS filings
- Political campaign involvement, which most 501(c)(3) charities are prohibited from
- Failure to operate for charitable purposes, such as excessive executive compensation or private benefit
- Unreported business income unrelated to the organization’s mission
The IRS reviews such reports to determine whether the organization still qualifies for tax-exempt status under federal law.
How to Report Misconduct to the IRS
To report suspected wrongdoing, individuals should complete Form 13909, Tax-Exempt Organization Complaint (Referral Form). This form can be submitted anonymously if desired and is available directly on the IRS website.
You can submit the completed form in any of the following ways:
- Mail:
Internal Revenue Service
EO Classification
Mail Code 4910DAL
1100 Commerce Street
Dallas, TX 75242-1198 - Fax: 214-413-5415
- Email: [email protected]
When filing a complaint, include as much information as possible—such as the organization’s name, EIN (Employer Identification Number), description of the alleged activity, and any supporting documents. The more detail you provide, the more effectively the IRS can investigate.
What Happens After You File a Report
Once received, the IRS reviews the information to decide whether an examination or audit is warranted. Due to federal privacy laws, the IRS cannot disclose the outcome of its investigation or confirm whether action was taken. However, each report contributes to maintaining accountability within the nonprofit sector.
The Bottom Line
If you suspect a charity or nonprofit is misusing its tax-exempt privileges, reporting it to the IRS helps uphold the integrity of the nonprofit system. Use Form 13909 to ensure your concerns reach the right department and are reviewed confidentially and professionally. If you need expert assistance, contact us today. Dimov Tax presents expert assistance to nonprofit organizations.