December 14, 2009
The IRS has released a check sheet that will be used by agents during examinations of exempt organizations to gather information on the governance practices and internal controls of organizations. According to the IRS, the check sheet will be used to collect data for its continuing efforts to understand the intersection between governance practices and tax compliance. The check sheet reports on organizations’ governance structure including bylaws provisions, board meetings, and relationships between directors; board practices for compensation decisions; adoption of written conflict of interest and document retention policies; and financial oversight practices.
Interestingly, although all exempt organizations are required to answer governance questions as part of the redesigned Form 990, the checklist contains a notation that it is to be used by revenue agents in examinations of 501(c)(3) public charities. While the IRS would not be precluded from raising governance issues in examinations of other exempt organizations, this notation may suggest that the IRS intends to focus its efforts concerning governance on Section 501(c)(3) organizations.
The check sheet and other materials are available here.
Source: Steptoe & Johnson, December 11, 2009
Source: Steptoe & Johnson
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