IRS Exempt Organizations Division FY2010 Annual Report

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.