Industry Insights

IRS Exempt Organization Voluntary Compliance Check

November 2012

The IRS recently mailed more than 2,000 letters to the central organization of randomly selected exempt organizations with group exemptions, requesting the completion of a 12-page online group rulings questionnaire. The questionnaire aims to provide the IRS further clarity on the relationship between the parent and its subordinate organizations, including how the parent controls and oversees activities of affiliates, modes of communication, services provided to assist affiliates and tax return filing requirements (type and number).

Selected exempt organizations will have 60 days from the date of the IRS letter to complete the optional—but highly encouraged—online questionnaire. Although this questionnaire is not part of an exam and the IRS is not reviewing the organization’s books and records, failure to complete the questionnaire could increase the organization’s exposure with the IRS. 

If the organization is unable to complete the questionnaire within 60 days, an extension will be granted by contacting the phone number on the IRS letter. It should be noted that the parent organization will be the only one provided with the necessary security information—PIN, password and source ID—to complete the questionnaire. The questionnaire can be completed in parts over multiple login sessions and does not need to be completed in one sitting. However, after the end of the 60-day response period (or 90 days if a 30-day extension is granted), the IRS will collect all responses and will not allow further access to the questionnaire or opportunity for revisions.

The IRS has issued additional guidance and information on related topics, including Group Exemptions, Compliance Checks and Applying For/Maintaining a Group Exemption.

For more information or assistance completing the questionnaire, contact your BKD advisor or Jason Bombeck.

BKD LinkedIn BKD Twitter BKD Youtube BKD Google Plus