Murphy-Led Bill to Crack Down on Scam Charities and Protect Taxpayers Unanimously Passes U.S. House

Press Release

The U.S. House of Representatives today unanimously approved H.R. 5443, a bipartisan bill introduced by Reps. Mike Kelly, R-Pa., and Stephanie Murphy, D-Fla., that would crack down on fraudulent charitable organizations that scam Americans out of their hard-earned money. This bill creates greater transparency in the tax filing process for charitable organizations so that federal and state authorities can weed out tax scammers. It would also cut red tape and compliance costs to make it easier for legitimate charities to focus on their missions. The National Association of State Charity Officials (NASCO)--which is an association of state agencies that oversee charitable organizations--has endorsed the bill.

"Millions of Americans contribute to charitable organizations every year, and they deserve assurance that their hard-earned money will be used the way it was intended," said Murphy. "Charity scams hurt the ability of legitimate organizations to raise funds and awareness for important causes. This bill will make it easier for the government to identify, shut down, and prosecute scam organizations that use charitable contributions for their personal benefit, rather than to help those in need. I'm proud to file this bipartisan bill with Congressman Kelly to help charitable organizations fulfill their vital missions."

"When it comes to charitable giving, the United States is the most generous nation on Earth," said Kelly. "That makes it all the more important to ensure that Americans are protected from scammers who despicably steal well-intended donation money from the people and causes that actually need them. By instituting an e-filing policy for all charitable giving organizations, we can help reduce fraud and increase accuracy, efficiency, and accountability throughout the giving community. This will also help eliminate paperwork, reduce IRS administrative costs, and ultimately save taxpayer money. I thank my colleague Rep. Murphy for working with me on this bipartisan bill to use the joint power of transparency and technology to make it easier to catch bad actors who shamefully abuse charity for personal gain."

The bill would require charities to annually file Internal Revenue Service Form 990 -- the form used by tax-exempt organizations -- in electronic as opposed to paper format and would also require the IRS to make these electronic filings available to the public. This will give government officials the timely information they need to prevent and punish fraud in connection with charitable solicitations and the use of charitable assets. These changes would help the federal government and states crack down on fraudulent charitable organizations, protect taxpayers who donate to these charities, and reduce excessive compliance costs for legitimate organizations so they can focus more on their charitable mission.

In its letter in support of H.R. 5443, NASCO President Karen Gano wrote: "Having electronic data for all Form 990 filers is necessary in order to fully realize these potential savings for charities, and to ensure that the states have ability to identify and stop fraudulent activity that harms charities and donors more quickly and effectively."

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