• Private benefit and inurement
• Political activities by section 501(c)(3) organizations
• Employment tax issues
• Organizations not operated as required by their exempt status
IRS’ concern is whether some organizations may be circumventing the goal of transparency by hiding compensation levels.
• Have a written mission statement
• Always use comparability data when making compensation decisions
• Have controls in place to ensure the proper use of charitable assets
• Provide for Form 990 review by the entire board of directors before filing
To learn more about whether and how governance practices may have contributed to these significant diversions of assets, in FY 2013 EO will conduct examinations that will include a review of governance practices, both before and after the diversion event.
IRS hopes the exams will generate relevant information on how organizations can avoid these events, as well as help EO refine our indicators of potential noncompliance to better target our examinations resources.
In about one-quarter of the cases, organizations picked for UBI examination provided inaccurate reporting on their returns.
About half of the examinations closed to date resulted in additional taxes or penalties. Adjustments to date included:
• Excise taxes on net investment income
• Taxes on unrelated business income
• Taxes on certain expenditures that are taxable when made by private foundations
• Employment taxes
At-your-fingertips information now includes:
• Many of the reasons an organization might be selected for review
• The distinctions among various types of review, including field audits, correspondence audits and non-audits, such as compliance checks
• What to expect during an examination, from initial contact to closing letter
• Taxpayer rights, including appeals, and
• Fast Track Settlement, which is a quicker way to resolve disputes
• The Charity and Nonprofit Audits: Exempt Organizations Examinations page has the Exams organizational chart I mentioned earlier.
Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)