Yesterday the IRS released its Report on Exempt Organizations Executive Compensation and the New York Times reported on these findings. About 600 charities and foundations had to file amended tax forms and problems were found in the way nonprofits reported payments to their executives and other employees. One of the reasons for the study that began in 2004 was to pin point excessive compensation to nonprofit executives through audits and questionnaires, ultimately improving tax law reporting of compensation practices of exempt organizations. Senate Finance Committee Chairman Baucus (D-MT) reacted with this statement; If the reporting errors were caused by confusing paperwork, that should be fixed immediately. But as Chairman of the Finance Committee, I am committed to pursuing abuse in this sector where so much good is otherwise done. In response to the New York Times article and the IRS report, this blog at Inside Philanthropy asks, "can nonprofits police themselves?" And according to a BNA Money and Politics ($$) article, nonprofits are more likely to be under scrutiny by the financial investigative unit of the IRS. The financial investigative unit, with more experienced agents trained in forensic accounting, was originally designed to support the criminal investigations division at IRS in audits of terrorist fund raising, but of late has not been busy enough with that, so it has been deployed to inspect larger, more complex nonprofits. The investigative units are based in St. Paul and Denver but have been making stops everywhere, he said.