There have been two major developments in the tax exempt bond area warranting your attention and follow-up action. The first involves a Compliance Check Questionnaire that was

randomly sent out in August 2007 to 209 Section 501(c)(3) organizations with tax-exempt debt outstanding. (See Compliance Check Questionnaire.) This initiative signaled the IRS’ concern with the compliance practices of nonprofits.

The second, announced in December 2007, requires expanded Form 990 disclosure for tax-exempt bond issues on a new Schedule K beginning in 2009. Although this may seem a long

way off, it is not too early to begin the development of practices and procedures to establish and maintain compliance with the federal tax-exempt bond rules for each of your bond issues.