The House Ways and Means Subcommittee on Oversight, led by Chairman John Lewis (D-GA), held a hearing July 24 on tax-exempt charitable organizations. Lewis praised charities and foundations, acknowledging they "make up the very fabric of our communities. They know the deepest human needs of our friends and neighbors and they know the solutions that work." Other members spoke positively about the work of nonprofits, referencing successful groups in their districts. The opening remarks of Rep. Bill Pascrell (D-NJ) challenged the Department of Treasury's assertion that charities are a "significant source of terrorist funding," observing that Treasury seems to be "painting the sector with a wide brush." Committee members focused on what could be done to promote charitable giving and increase volunteerism. Pascrell's opening remarks were welcome, given that Treasury continues to allege that charities are a significant source of terrorist financing. OMB Watch and others have asked Treasury to withdraw this claim. During questioning, Pascrell asked Steve Gunderson, the President and CEO of the Council on Foundations, if he agrees with Treasury's claim. Gunderson responded that he does not and went on to explain the difficulties facing the sector as a whole. Pascrell emphasized Gunderson's statement that not a single U.S. charity has been found to have redirected funds to a terrorist organization. Gunderson's written statement stated, "In fact, we have seen no evidence to indicate that U.S. charities are a major source of terrorist support. Out of hundreds of thousands of U.S. charities and billions of dollars given out in grants and material aid each year, only six U.S. charities are alleged to have intentionally supported terrorists. Thus far, Treasury has not identified a single case of inadvertent diversion of funds from a legitimate U.S. charity to a terrorist organization. . . . An even larger issue is that, by exaggerating the extent to which U.S. charities serve as a source of terrorist funding, Treasury is fueling an environment in which wary donors may refrain from making charitable contributions." The Internal Revenue Service (IRS) confirmed that nonprofits face challenges, including a blurred line between the tax-exempt and commercial sector, the overvaluation of donations, and charities established to benefit the donor. However, Steven Miller, IRS Tax Exempt and Government Entities Division commissioner, prefaced this by saying, "The charitable sector deserves to be commended for the vital work it does throughout America, and indeed throughout the world. Second, on the whole, the charitable sector is very compliant with the Tax Code. While we have seen problems, some of them serious, and some of them involving major charitable institutions, they are not widespread." A new Government Accountability Office report that was released in conjunction with the hearing found that about 55,000 tax-exempt organizations have unpaid taxes. The alarming title of the report — "Thousands of Organizations Exempt from Federal Income Tax Owe Nearly $1 Billion in Payroll and Other Taxes" — moved Rep. Stephanie Tubbs Jones (D-OH) to observe that there are currently over one million 501(c)(3) charitable organizations in the U.S. She wanted a clarification in what she saw as a clearly skewed title given that only roughly three percent of charities have unpaid taxes. "Don't you think it would have been good to tell us there are 1.8 million exempt organizations when you threw out that 55,000 number? It's your job to get the numbers right," she said. There was also discussion of the Pension Protection Act because certain provisions will expire on Dec. 31. Witnesses from both the Council on Foundations and Independent Sector stressed their support for expanding the IRA Charitable Rollover, which allows older Americans to make charitable contributions from their individual retirement funds without suffering tax consequences. Diana Aviv from Independent Sector also proposed that Congress create a Small Nonprofit Administration comparable to the Small Business Administration.