As part of a stepped-up enforcement effort, the Internal Revenue Service Exempt Organizations division (EO) is sending letters to approximately 2,000 charities asking them to detail their method of determining executive compensation. EO Director Martha Sullivan estimates 25 percent of organizations receiving the letter will be examined further. In a related issue, the IRS is contacting charities that have not answered question 89B of Tax Form 990. Question 89B deals with excess benefit transactions, and is considering the use of penalties up to $50,000. In April 2005 the IRS will open a Fraud and Financial Transaction Unit (FFTU) to scrutinize charities for possible transactions with terrorists and will begin examinations of U.S. charities that make foreign grants. A team devoted solely to examining charities that send money overseas has been created to study whether changes to current enforcement procedures are necessary. This effort appears to duplicate or conflict with the Treasury Department's Voluntary Best Practice Guidelines for U.S. Based Charities. These guidelines are inconsistent with current IRS regulations and have been criticized for being overbroad and ineffective to prevent diversion of funds to terrorists. Currently a working group of nonprofits and foundations is working on alternatives to the guidelines. See OMB Watch website for more information.