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In 2012, the Internal Revenue Service will focus examination resources on tax-exempts that face "allegations of impermissible political intervention."
The IRS also will scrutinize unrelated business income tax, political activity, governance and foreign operations as set in its work plan for 2012, according to ASAE.
ASAE Inroads reports that the IRS intends to use information collected from the Form 990 over the past several years to “focus its examination resources on serious allegations of impermissible political intervention” by tax-exempt organizations. An internal committee of career civil servants will identify cases to refer for examination.
The agency also will scrutinize organizations that report unrelated business income activities on Form 990 but have not filed a Form 990-T. Many organizations report significant gross receipts from unrelated business income activities but declare no tax due, according to the IRS.
Governance practices related to tax compliance also are on the IRS watch list now that the Form 990 includes a section focused on the governance structure and financial controls put in place by tax-exempt organizations since the form's redesign in 2009.
The Exempt Organizations division will continue to analyze recommendations on group exemptions. An advisory panel's report to the IRS last June recommended eliminating group returns and requiring chapters of tax-exempt parent organizations to file their own Form 990 returns. The EO division is preparing a questionnaire to gather more information about practices used by parent organizations to satisfy annual filing requirements. Details: wwww.asaecenter.org.