Wednesday, March 3, 2021

IRS Exempt Organizations FY2020 Accomplishments and Compliance Initiatives

DownloadThe IRS Tax-Exempt and Government Entities Division recently released its list of Fiscal Year 2020 Accomplishments. The list included the following items for Exempt Organizations:

  • Examining 3,240 returns, including but not limited to the Form 990 series. But as previously reported by TIGTA using FY2019 data, this represents an audit rate of less than 0.2 percent. The examinations had a change rate of 88 percent, but only led to 36 proposed revocations.
  • Compliance initiatives included hospital unrelated business income, 501(c)(7) social clubs, 4947(a)(1) non-exempt charitable trusts, 501(c)(3) charitable nonprofits that previously operated as for-profit entities, and organizations with private benefit or private inurement indicators.
  • Closed 95,864 applications for recognition of exemption, including 85,509 approvals (of which 79,730 were under 501(c)(3)). More than 60,000 of the slightly over 100,000 applications received in FY2020 were Form 1023-EZs, continuing the increasing importance of that streamlined application form.
  • Transition to mandatory electronic filing for both Form 1023 and Form 990.

It should be acknowledged that much of this work was done even as IRS employees had to pivot to remote work because of the pandemic.

Lloyd Mayer

https://lawprofessors.typepad.com/nonprofit/2021/03/irs-exempt-organizations-fy2020-accomplishments-and-compliance-initiatives.html

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