IRS Approved One Guy's 76 Blatantly Fake Charities

'New York Times' examines lax policies at tax agency that make fraud easy
By Mike L. Ford,  Newser Staff
Posted Jul 10, 2022 5:35 PM CDT
IRS Approved One Guy's 76 Blatantly Fake Charities
This file photo shows the Internal Revenue Service building in Washington.   (AP Photo/Susan Walsh, File)

Ian Hosang says he’s sorry and wants to make full restitution. “I did very wrong. I know that,” he tells the New York Times. Hosang, 63, was arrested in May for fraud and other charges tied to 76 fake charities he established between 2014 and 2020. According to the Times, his case raises major “concerns about the IRS’s ability to serve as gatekeeper for the American charity system.” The facts suggest Hosang’s scheme was quite unsophisticated. He used fake names like “American Cancer Society of Michigan” and “United Way of Ohio,” all listed under the exact same PO box on Staten Island, and he included deceased and imaginary people among his “directors.”

A big factor in all this: In 2019, the IRS unveiled a new fast-track system with a heavily simplified application process intended to free personnel in the stripped down agency from cumbersome paperwork. Now, just 1 in 2,400 nonprofit applications are rejected; in the old days, it was more like 1 in 53. The real American Cancer Society spotted Hosang’s scam, but it got no help from the IRS. Instead, the agency continued approving his fraudulent applications, including 56 between 2019 and 2020. Hosang's arrest puts him in familiar territory; he was convicted of federal fraud charges for a pump-and-dump stock scam in the 1990s. But Congress hasn’t empowered the IRS to make rules that prevent crooks from establishing charities, and so there are none. Read the whole story here. (More fraud stories.)

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