IRS Can't find Terrorists

IRS screening of tax-exempt organizations for potential terrorist activities is inefficient and incomplete, a new federal government audit warns.

The tax agency fails to systematically match filings of tax-exempt groups against a comprehensive list of potential terrorists, the Treasury Inspector General for Tax Administration audit found. Instead, the IRS manually compares the filings with an incomplete list.

As a result, "The IRS provides only minimal assurance that tax-exempt organizations potentially involved in terrorist activities are being identified," the audit released Friday concluded.

"A significant source of alleged terrorist support has been through charities and non-profit organizations, and the IRS needs to use all of its available resources to identify tax-exempt organizations with potential links to terrorist groups," said Senate Finance Committee Chairman Max Baucus, D-Mont., who called the audit findings "disturbing."

Since the Sept. 11 terrorist attacks, the Treasury Department has designated six U.S.-based Muslim charities as terrorism supporters. The action halted their activities and led to seizure of millions of dollars in assets.