TaxNewsFlash-Exempt Organizations

April 28, 2008
No. 2008-40

IRS Officials Address Scope of Charitable Activities, Governance, and University Questionnaire

Speaking at a program in Washington, DC, Steven T. Miller, Commissioner of the IRS’s Tax-Exempt and Government Entities Division, indicated that the IRS is working on a program that will address whether charities conduct activities that are commensurate in scope with their financial resources. Miller did not discuss the program in detail, but indicated that it is expected to be rolled out within 18 months.

Miller also defended the IRS’s focus on the governance practices of tax-exempt organizations, asserting that good governance drives tax compliance. Responding to an audience member’s assertion that volunteer boards are appropriately occupied only with high-level policy matters, Miller responded that there are many “mid-level” decisions that the board of directors of a tax-exempt organization should be aware of, such as large-scale investments, involvements in joint ventures, and large scale decisions regarding activities. Miller also indicated that IRS agents may begin reviewing aspects of organizational governance during audits.

In the same program, Robert S. Choi, Director of the IRS Exempt Organizations Rulings and Agreements Division, stated that the IRS is currently completing preparation of a questionnaire to be sent to colleges and universities as part of the research and compliance initiative concerning colleges and universities that was in the IRS Exempt Organizations Division’s 2008 Implementing Guidelines. See TaxNewsFlash-Exempt Organizations 2007-148.. The questionnaire will be sent to a statistical sample of 400 small, medium, and large colleges and universities.

For more information, contact Rick Speizman, National Partner-In-Charge, KPMG’s Exempt Organizations Tax Practice (ExoTax), at (202) 533-3084 or rspeizma@kpmg.com

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