Who has authority to investigate the activities of a nonprofit corporation?
The Attorney General has statutory authority to (1) investigate charities that operate as nonprofit corporations, and (2) inspect the books and records of all corporations, including nonprofit corporations. The Secretary of State has no such authority. The IRS can revoke a nonprofit corporation’s tax exemption for violations of federal tax laws.
The Secretary of State is a filing officer for the documents that create nonprofit corporations, but the Secretary does not have any regulatory authority or enforcement authority over those corporations. There are some circumstances under which the Attorney General has authority to take action against nonprofit corporations. The Attorney General has statutory authority under the Texas Nonprofit Corporation Act to investigate the operations of charities that are operated as nonprofit corporations. Additionally, the Attorney General has authority under the Texas Miscellaneous Corporation Laws Act to inspect and examine all books and records of corporations, including nonprofit corporations. Contact the Charitable Trust Section, Consumer Protection Division of the Office of the Attorney General to determine if the section has authority to take action in a particular matter. If a nonprofit corporation is exempted from federal taxes, the Internal Revenue Service may revoke the exemption of
