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Public Policy
- IRS Expands on Compensation Inquiries
Continuing its investigation into nonprofit compensation practices,
the IRS sent compliance check letters and began
examinations focusing on loans made to tax-exempt organizations insiders.
The script and presentation materials from an IRS
phone forum on executive compensation are posted on the agency's
website....May 2006
The IRS began a Tax Exempt Compensation Enforcement Project in 2004 to study compensation practices of almost 2,000 nonprofit organizations. The initiative focused on compensation of officers, transactions (such as loans and leases) with officers, and excess benefit transactions reported on Forms 990.
- IRS Studies Nonprofit Hospital Compliance
The IRS sent a compliance questionnaire
(PDF) to nonprofit hospitals that contains
over 70 questions in areas including executive compensation, uncompensated
care, and community programs....5/19/06
- IRS Releases Report on Abuses by Credit Counseling Agencies
The IRS recently released a report outlining the results of
over 40 audits the agency conducted over the past two years of tax-exempt
credit counseling agencies. In each case, the audits resulted in the
revocation, proposed revocation, or other termination of tax-exempt
status. The IRS will take additional action, including issuing expanded
guidance; sending compliance inquiries to 740 other credit counseling
agencies not already under audit; and tightening its review of new applications
by credit counseling firms for tax-exempt status. More
on the credit counseling initiative....5/19/06
- Past Changes to the Form 990
The IRS released a revised Form 990 for tax year 2005 containing changes that reflect areas of concern with tax-exempt accountability that the IRS has been focusing on lately. Form 990-EZ and Schedule A have were revised as well.See the IRS posted frequently asked questions with respect Form 990 changes for tax year 2005. Also available is the script (PDF) from a March 2006 phone form that the IRS held on Form 990.
More....5/11/06
IS comments (PDF) on changes to IRS Form 990 in 2003. IRS request for comments (PDF) ..1/29/03
- IRS Proposes Guidance on Excess Benefit Transactions
The IRS has released proposed
regulations (PDF) on factors that it
will consider in determining whether a charitable organization that
engages in excess benefit transactions will lose its tax-exempt status.
The new rules provide examples of the existing requirement that a 501(c)(3)
organization serve a public rather than a private interest. If the proposed
rule is adopted, the examples will be made a part of the regulations.
The IRS notes that the examples reflect current law. The rule also lists
facts and circumstances that the IRS will consider when determining
whether revocation of tax-exempt status is appropriate in addition to
excess benefit transaction excise taxes.
The IRS website also provides explanations of key terms in the excess benefits
rule, also known as intermediate sanctions (section 4958 of the Internal Revenue Code). The new page is linked to the the Life Cycle of a Public Charity web page. More
- IRS Releases Vehicle Donation Form
IRS has released a new form for charities and donors to use in reporting
vehicle donations. Charities will be required to complete Form 1098-C
with information about the donated vehicle, whether it was sold or used
by the charity, and the amount the vehicle sold for. One copy of the
form will be filed with the IRS and another copy is to be sent to the
donor as an acknowledgment of their contribution. The IRS has also clarified
that sales at auction will not be considered sales to needy persons
at substantially below fair market value.
Form 1098-C
(PDF)
Instructions
for Form 1098-C (PDF)
Clarification
regarding vehicle sales to needy individuals
More on vehicle donations
- IRS Web Pages on Conservation Easements
The IRS website provides information on conservation
easements along with a link for submitting comments and questions
about such arrangements. Conservation easements were also the topic
of a June 8, 2005 Senate Finance Committee hearing.
The House Ways and Means Oversight Subcommittee also held a hearing on June 23, 2005 to review tax deductions for historic facade easements.
- IS Comments on Mandatory E-Filing
for Certain Nonprofits...3/3/05
- IRS Final Regulation
on Duplication Fees for Exempt Organization Disclosures...1/10/05
- Form 1023 Revised
The revised
Form 1023 (PDF), the exemption application
form for section 501(c)(3) organizations, is now available on-line on
the IRS website. More...11/05/04
Independent Sector comments on IRS proposed revisions to Form 1023...12/03/02
- Section 527 Initiative
The IRS announced an initiative to improve reporting and disclosure
by Section 527 political groups. Section 527 organizations are not required
to register with the Federal Elections Commission, but they must file
certain contribution and distribution disclosure reports with the IRS. IRS
notice on 527s...9/27/04
Read more on 527s
- Joint statement by nonprofits on IRS
audits of charities that lobby...4/29/03
- Independent Sector letter
to Appropriations Committees in support of IRS funding...7/8/02
- GAO study on Tax-Exempt Organizations | Read
the IS analysis...5/28/02
- IRS final rule on corporate
sponsorship...5/28/02
- IS urges the IRS to continue fair, impartial, nonpartisan standards
in determining which organizations should be audited. Letter
to the IRS...3/7/01
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