In 2009, Sarah Hull Ingram, the attorney who served as IRS commissioner of the office responsible for determining tax-exempt status when the unit targeted conservative groups, said that a step her division was taking in the direction of “good governance” was emphasizing “the importance of transparency and accountability in maintaining the public’s confidence in the integrity of individual organizations and of the tax-exempt sector as a whole.”
Ingram, who is now the director of the IRS’ Affordable Care Act office, gave her address as part of a continuing education forum at Georgetown Law, her alma mater, on the subject of non-profit governance. Ingram and her office will have a large role in the enforcement of ObamaCare.
In praising the “tax-exempt sector,” Ingram said:
I think we all – and by “all” I mean not only those of us in this room but the public at large – appreciate the special contribution the tax-exempt sector makes to the country… Those who aid the poor and the distressed, those who educate, who perform scientific research, who enliven our arts and our cultural life, who cure the sick, who provide religious leadership in our churches, synagogues and mosques – all are serving others. And all are an essential part of our national fabric and collectively reflect our diverse and creative nation… Accordingly, we want to help you where we can, and often that means not standing in your way.
Ingram then went on to provide her view of “good governance,” using as a guide the notion that “…a tax-exempt charity should… provide some meaningful and measurable benefit or service to the public.”
Ingram identified several “key organizational and operating principles” of “good governance,” among them the notion that the organization should have principles that “are supported by policies and practices that… protect against conflicts of interest…”
“Transparency is another key principle,” Ingram explained. “I believe that board decisions should be reflected in minutes, that records supporting decisions should be retained for reasonable periods, that whistleblowers should be protected…”
Regarding her anticipated work leading the IRS Tax Exempt division, Ingram asserted:
Let me be clear–we will be gathering objective data, not subjective views. And we will do this over time. As we collect enough information to be interesting, we will share it with the community, and everyone can have a go at it.
Ingram quoted from a speech made by the Commissioner of the Australian Tax Office on the issue of tax compliance by Australian businesses:
“A core feature of [Australia’s] Annual Compliance Agreements is an emphasis on strong corporate governance. The [Australian Tax Office] firmly believes that the level of corporate governance has a direct bearing on whether a company has a high, medium or low risk profile.”
Exactly. Whether you are a commercial business, a federal agency, or a tax-exempt organization, it just makes sense. And just as there are public conversations about governance elsewhere, we need to continue to discuss what good governance looks like in the tax-exempt sector as well.
Ingram went on to say that “the IRS has a clear, unambiguous role to play in governance… The federal tax law must be applied consistently across the country, and we will use both our education and outreach programs and a meaningful enforcement presence to accomplish this.”
Ingram said that her views were informed by former IRS Commissioner Doug Shulman.
“He is, as many of you know, a strong believer in the efficacy of sunlight,” she said. “He believes that it can help cure weak institutions and protect healthy ones. He believes that transparency, accountability, and disclosure are virtues in the tax-exempt area, and I agree.”
In March of 2012, Shulman asserted that there was “absolutely no targeting” by the IRS of tax-exempt conservative organizations while testifying before the House Ways and Means Subcommittee on Oversight.
According to the Wall Street Journal, an investigation revealed that a high-ranking IRS official knew as early as mid-2011 that conservative groups were being inappropriately targeted, a year before Shulman stated that his division was not targeting these groups.
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