Sunday, July 13, 2008

National Taxpayer Advocate's Report to Congress Raises Nonprofit Issues

In her 2008 report to congress, National Taxpayer Advocate Nina Olson raises at least one nonprofit issue concenring delays in issuance of 501(c)(3) determination letters.  Here is the excerpt from the report:

3. Delays in Determination Letters for Nonprofit Organizations

The Tax Exempt and Government Entities (TE/GE) Division of the IRS is responsible for processing applications from entities seeking nonprofit status under IRC § 501(c).256 Many of these organizations provide vital services to the community, and thus, it is important for the IRS to timely process the exemption applications. The National Taxpayer Advocate has concluded that, while the IRS is taking positive steps to reduce the processing time for exemption applications, TE/GE is not doing everything it can to reduce the processing time.257 In her 2007 Annual Report to Congress, the National Taxpayer Advocate noted that while TE/GE had achieved a 55 percent decrease in the backlog of applications, the improvements are not sustainable without permanent changes to the application review process, such as a mandatory managerial review when applications remain unapproved.258 One of Systemic Advocacy’s FY 2008 operational priorities is to collaborate with TE/GE on a TAS-IRS Rework Study to determine other ways to speed the review process.

For the full report, go to the IRS website.


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