TaxNewsFlash-Exempt Organizations

June 30, 2008
No. 2008-58

PRINTABLE VERSION

Report of Treasury Inspector General’s Audit of Prohibited Political Activities of Exempt Organizations

The Treasury Inspector General for Tax Administration recently issued a report—Improvements Have Been Made to Educate Tax-Exempt Organizations and Enforce the Prohibition Against Political Activities, but Further Improvements Are Possible (2008-10-227, dated June 18, 2008)—with results of the review of the IRS Exempt Organizations (EO) function’s process for reviewing alleged political campaign intervention by tax-exempt organizations.

The mission of the review was:

To assess the effectiveness of the IRS Tax Exempt and Government Entities (TE/GE) Division in addressing alleged political campaign intervention by section 501(c)(3) organizations

To determine whether actions to date had detected potential repeated campaign intervention by previously identified organizations

The report includes recommendations that all referrals of potentially prohibited political intervention are reviewed in a timely manner and that there is adequate IRS staffing to track all significant activities. It was also recommended that the IRS improve the consistent understanding of prohibited political intervention criteria within the EO function.

An electronic version of the report (18 pages) is available on the Treasury Department Web site: http://www.treas.gov/tigta/auditreports/2008reports/200810117fr.pdf

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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