IRS TE/GE division’s FY 2017 work plan

IRS TE/GE division’s FY 2017 work plan

The Tax-Exempt and Government Entities (TE/GE) division of the IRS today released a work plan for fiscal year (FY) 2017.

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The work plan describes and documents the results of FY 2016 activities and outlines projects and priorities for FY 2017 regarding exempt organizations; employee plans; federal, state, and local governments; Indian tribal governments; tax-exempt bonds; and government entities compliance services. Read the TE/GE work plan [PDF 724 KB]

FY 2017 work plan

The FY 2017 work plan outlines the focus areas in which IRS Exempt Organizations (EO) is deploying resources. The following are highlights of the work plan.

EO examinations

EO will continue to use data-driven case selection models to identify and address existing and emerging high-risk areas of noncompliance. Forms 990, 990-EZ, and 990-PF case selection models will be improved based on feedback received from field employees, and EO will implement new models for Form 5527, Form 990-T and the post-determination compliance program. EO will also develop a referral model. As in FY 2016, examinations will continue to focus on five strategic issue areas: 

  • Exemption—Issues include non-exempt purpose activity and private inurement
  • Protection of assets—Issues include self-dealing, excess benefit transactions, and loans to disqualified persons
  • Tax gap—Issues include employment tax and unrelated business income tax liability
  • International—Issues include oversight on funds spent outside the United States, exempt organizations operating as foreign conduits, and report of foreign bank and financial accounts (FBAR) requirements
  • Emerging issues—Issues include non-exempt charitable trusts and section 501(r)

EO will also implement a statistical sampling methodology to assess compliance in the EO population. 

Compliance data included in the work plan indicate that EO is focused on the following issues in 2016:

  • Hospital reviews for compliance with section 501(r) (e.g., community health needs assessment, financial assistance and emergency medical care policies, billing and collection requirements)
  • Post-determination compliance (e.g., Form 1023-EZ)
  • Data-driven case selection models (e.g., Forms 990, 990-EZ, and 990-PF)

EO rulings and agreements

In FY 2017, EO intends to emphasize the following:

  • Form 8976: EO will improve the processing of Form 8976 notifications as required under section 506. Section 506 was added by the PATH Act and requires organizations that intend to operate under section 501(c)(4) to notify the IRS within 60 days of formation.
  • Form 1023-EZ: EO will continue to mitigate Form 1023-EZ applicant compliance risks by performing pre-determination application reviews.
  • Knowledge management: EO will continue preparing and presenting approximately three to four live technical events or CPE sessions each quarter. Additionally, EO will continue to prepare and post technical Issue Snapshots for EO employees and the general public. Issue Snapshots that are currently being developed explain conservation easements, limited liability companies, and requirements for community health needs assessments.
  • EO determinations quality assurance (EODQA): EODQA will continue to review and evaluate EO determinations cases for correctness and consistency. This information will be used to identify trends and areas for improvement. 

Other TE/GE groups

The FY 2017 work plan also includes objectives for other TE/GE groups, including: employee plans; federal, state, and local governments; Indian tribal governments; tax-exempt bonds; and government entities compliance services. 

 

For more information, contact the Managing Director-in-Charge of KPMG's Washington National Tax Exempt Organizations Tax group

D. Greg Goller | +1 (703) 286-8391 | greggoller@kpmg.com

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