IRS Essay Example | Topics and Well Written Essays - 1250 words

IRS - Essay Example Taxation is one of the main ways in which the government gets money to fund its budget and offer service to the citizens. IRS is therefore a very important department of the government as it facilitates the government to collect funds from both individuals and corporations. IRS is also involved in formulating tax laws to help the government improve its tax collection methods and look in to new ways of helping the government get more finances through taxation (Malamut and Blach, 2008). Both corporations and individuals have the legal obligation of paying taxes to enable the government in its operations. There are however other institutions, individuals and corporations that have been legally exempted from paying taxes for various reasons. Since the IRS is only concerned with tax collections, it is expected that those exempted from paying taxes fall outside the legal mandate of the Internal Revenue Service. Among those exempted from paying taxes include Non Profit Organizations (NPO). These are organizations whose main objective is to serve the community through offering goods and services that help improve the living standards and the lifestyle of the people. Nonprofit Organizations are involved in activities such as sensitizing the community on health issues, enlightening the community with respect to their legal obligations, fighting discrimination among other issues. Unlike other organizations, the nonprofit organizations do not have profit making as their prime objective. Due to the good work these organizations are engaged in within the community, the law exempts them from paying taxes so as to motivate them to carry on with their good work. Despite profit not being their main objective, nonprofit organizations often report huge profits from their activities. Questions have arisen over whether these organizations ought to be taxed in such cases where they make huge profits (Malamut and Blach, 2008). A move to tax the organizations has been vehemently oppose d with most people being of the view that the profits only help the organizations improve the quality of their services. This has maintained the nonprofit sector outside the scope of the IRS. The national tax collection agency, IRS, has come under intense pressure from various sections of the country for its involvement in the affairs of nonprofit making organizations. The Internal revenue service (IRS) has recently been meddling in the management of nonprofit organizations (Chait & Taylor, 2005). The nonprofit organizations and other people see this as the IRS acting beyond its scope of work. The IRS however claims it is justified to monitor the leadership of these organizations despite them falling outside its scope. IRS has stated that its monitoring of the management affairs of nonprofit organizations is meant to ensure they comply with tax laws of the country (Hopkins, 2011). The organizations fall under the scope of the tax collection institutions since they are required by la w to adhere to observe tax regulations by strictly engaging in charitable missions within the community. The Internal Revenue Service aims at ensuring the organizations operate exclusively for charitable works. There is also great need to ensure that these organizations use their assets, including profits they earn, to help them accomplish charitable ends. By insisting on good governance, the IRS hopes to