There have been two major developments in the tax exempt bond area warranting your attention and follow-up action. 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.....

We have worked with Section 501(c)(3) organizations who are under audit or have received the Compliance Check Questionnaire, and there are steps you can take to be better prepared in this new enforcement environment. We recommend starting now to develop the systems you will need in place by 2009 to generate the information required by the new Schedule K and avoid adverse impact on your operations and staffing levels. (See Schedule K.) THIS IS SCHEDULE K (FORM 990).