(FiveNation.com)- The Internal Revenue Service is another bloated bureaucratic agency that isn’t necessarily known for its efficiency. As the agency combats internal issues on multiple fronts, a recent scandal rose to the surface as they allowed multiple fake charities to exist. These charities were not even good fakes, but because they were so bad and clearly a fake, concerns have risen over whether the IRS can even manage the American charity system.
The IRS has failed in its vetting system to the point where they approved a fake charity called the “American Cancer Society of Michigan.” No, the supposed charity was not even registered in Michigan, according to the StarTribune.
The group applied for nonprofit status in 2020 and listed its mailing address to a rented mailbox in Staten Island, New York. The IRS did not note the odd address nor did they care that the charity was nearly identically named to the actual charity called the “American Cancer Society,” who even warned the IRS about the fake.
Ian Hosang who ran the fraudulent charity also ran another called “the United Way of Ohio,” which was registered to the same mailbox in Staten Island. Now that Hosang has been accused of the fraud, the IRS is raising eyebrows from regulators who doubt that the government agency can even handle being the alleged gatekeeper of charities.
But what is more concerning is that the scam was not even that good. The signs were so blatant that only a convoluted government entity could mess up so bad.
Hosang was previously a convicted stock market fraudster, accused of running “pump and dump” operations. But, of course, the IRS does not check for previous history either. So Hosang was able to register a whopping 76 nonprofits that the IRS approved.
As a result, the agency’s “fast track system” to handle the approval process for nonprofits appears to be extremely incompetent. The system reportedly denies one out of every 2,400 applications.
The IRS has declined to provide comment regarding Hosang’s case, saying that doing so would be an invasion of taxpayer privacy laws.