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Industry Alerts

The New IRS Checklist for Examination of Exempt Organizations

Mar 1, 2010

In December 2009, the IRS issued a new checklist for agents who examine tax exempt organizations. According to the IRS, the checklist is to be used “to capture data about governance practices and the related internal controls of organizations being examined. The data will be included in a long-term study to gain a better understanding of the intersection between governance practices and tax compliance.”

It is not meant to be a checklist of qualifications for maintaining tax-exempt status.

Perhaps the most interesting questions on the checklist relate to the auditor’s report.  The checklist asks if a Management Letter was obtained, if it was reviewed by the Board or a committee, and if the organization acted on any of the recommendations.

It is unlikely that these checklist questions will change what an auditor puts into a Management Letter, but it is important to note that IRS examiners may now ask more questions about what was in the Management Letter.

If you have any questions, please contact us.

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The American Association for Marriage and Family Therapy (AAMFT)