The Treasury Inspector General for Tax Administration (TIGTA) released a report on the Internal Revenue Service's (IRS) function to identify instances in which charitable organizations may be linked to terrorist-related activities. The report, Screening Tax-Exempt Organizations' Filing Information Provides Minimal Assurance That Potential Terrorist-Related Activities Are Identified, calls on the IRS to use the consolidated Terrorist Screening Center (TSC) list as opposed to manually reviewing all tax-exempt documents and comparing the information with the Treasury list maintained by the Office of Foreign Assets Control (OFAC). Meanwhile, use of the OFAC list by private companies for similar screening has caused innocent people to be flagged as terrorists. Why then should the IRS expand its screening program when problems with the lists have already been identified? The report highlights the claim that the "use of charities and nonprofit organizations is a significant source of alleged terrorist activities." Yet, Treasury has never provided documentation to back up its claims that the charitable sector is a significant source of terrorist financing. In response to the TIGTA report, Senate Finance Committee Chairman Max Baucus (D-MT) wrote a letter to Treasury Secretary Henry Paulson expressing his concern. Baucus' letter states:TIGTA investigators found that the current IRS screening process has never identified any person or organization with links to terrorists and that the agency is using a system that is, at best, woefully inefficient. IRS personnel told TIGTA that they primarily look for "Middle Eastern sounding names" when considering which tax filings to flag for further review. For more information, see this article from the latest Watcher.