IRS Exempt Organizations Division FY2010 Annual Report

Published on: by Gene Takagi Category:IRS & FEDERAL TAX ISSUES

Audit Check

The IRS Exempt Organizations Division Annual Report for its Fiscal Year 2010 was released earlier this month.  The EO Division has three principal offices:

EO Examinations (Examinations) is responsible for audits and (less intensive) compliance checks of tax-exempt organizations.

EO Rulings and Agreements (R&A) is responsible for reviewing applications for exemption, issuing private letter rulings, providing technical advice, and collaborating to deliver formal guidance.

EO Customer Education and Outreach (CE&O) offers specialized education and outreach programs to help exempt organizations understand their tax responsibilities.

Here are some highlights of the EO Division Annual Report

  • Examinations audited 11,449 returns in FY10 (up 12% from FY09) and performed 3,893 compliance checks (down 43%).  2010 legislation necessitated the higher ratio of audits (traditional exams) vs. compliance checks.
  • R&A closed 65,590 cases/applications for tax exemption (down 15%), 56% through the screening process (down 1%) and the remainder after full development.
  • CE&O:
    • provided an online toolkit to internal and external  stakeholders to alert the tax-exempt community of the filing relief program available to small organizations at risk for losing their tax exemption for failure to file;
    • prepared and distributed information about new legislation, including the American Recovery and Reinvestment Act and Affordable Care Act, to the tax-exempt community; and
    • released an updated gaming publication, Tax-Exempt Organizations and Gaming, which helps organizations understand how their activities impact their tax-exempt status by describing the unique reporting and filing responsibilities of each type of exempt organization.
  • Size of Organizations by Gross Annual Receipts
    • Form 990
      • Less than $500K:  48%
      • $500K – $5M:  36%
      • $5M+:  16%
    • Form 990-EZ
      • Less than $200K:  79%
      • $200K – $500K:  14%
      • $500K – $1M:  7%
  • Form 990 Preparer Statistics
    • Form 990
      • Paid prepared:  87% (up 6% from FY09)
      • Self-prepared:  13% (down 6%)
    • Form 990-EZ
      • Paid prepared:  68% (up 18%)
      • Self-prepared:  32% (down 18%)

You can read the entire Annual Report and the FY2011 Workplan here.