The IRS will focus on private benefit, private inurement, payroll tax, and other compliance issues associated with exempt organizations in upcoming year.
On September 28, 2017, the Internal Revenue Service’s (IRS’s) Tax Exempt and Government Entities (TE/GE) Division released its work plan for fiscal year 2018. The plan summarizes the division’s accomplishments in fiscal year 2017, and outlines the following areas of focus in fiscal year 2018.
Compliance strategies will focus on supporting organizations, previous for-profit entities, and private benefit and inurement.
Compliance strategies will also focus on complex worker classification and complex fringe benefit issues in coordination with Federal, State, and Local/Employment Tax (FSL/ET).
Compliance checks will focus on wage reporting issues, unrelated business income tax issues, and financial assistance policies.
The IRS will continue its focus on taking a data-driven approach to examinations alongside referrals, claims, and other casework.
The work plan also highlights changes that EO implemented during fiscal year 2017. These changes include modifications to Form 1023-EZ, the development of a Compliance, Planning & Classification Unit, and the consolidation of Indian Tribal Governments and Tax Exempt Bonds into one function, as well as moving Federal, State, and Local Governments (FSLG) to EO.
Finally, during fiscal year 2017, EO continued publishing “issue snapshots” and “issue podcasts” as additional resources. Snapshots focus on a specific technical tax topic. The snapshots include summaries of key case law, rulings, and other authorities; analysis; and issue spotting and audit tips. Podcasts are audio presentations that summarize certain areas of EO practice and are accompanied by written materials. The first two podcasts concern 501(c)(3) denials and commercial activities that further a nonexempt purpose.