TaxNewsFlash-Exempt Organizations

August 19, 2008
No. 2008-78

PRINTABLE VERSION

Comments on IRS’s Proposed Exempt Organization Voluntary Compliance Program Are Due by October 3, 2008

Draft text of a proposed revenue procedure, if finalized, would establish procedures for participation in the Exempt Organization Voluntary Compliance Program (EOVCP)—a program intended to allow certain tax-exempt entities to redress their noncompliance with certain obligations under the Code. Comments are due by October 3, 2008.

The IRS intends for the EOVCP to assist exempt organizations voluntarily comply with their reporting and filing obligations under sections 6033 and 6011—specifically with respect to the filing of Forms 990, 990-EZ, 990-PF, and 990-T.

The draft of the proposed revenue procedure contains information on which entities would be eligible for participation in EOVCP as well as which tax and information reporting noncompliance issues would be resolved through the program.

For an electronic version of the draft of the proposed revenue procedure: Rev. Proc. 2008-XX

Overview

According to the IRS, other than penalty and closing agreement provisions, there are no established procedures for redressing past noncompliance of exempt organizations with respect to certain annual tax and information return filing requirements.

The EOVCP is being proposed to help aid in the resolution of prior noncompliance and to facilitate future compliance with respect to the annual return filing requirements. The program would address an exempt organization’s failure to file:

Form 990, 990-EZ, or 990-PF, as required by section 6033
Form 990-T, as required by section 6011

In addition, if an organization has not complied with the Form 990 series filing requirements and has not filed employment tax returns under section 6011 (Forms 940, 941, 945 and 1099) or required Forms W-2, the organization could also submit those employment tax returns along with the relevant Forms 990, 990-EZ, 990-PF or 990-T for the corresponding tax year. The proposed revenue procedure states that employment tax returns and Forms W-2 would not be accepted under the EOVCP unless they are for the same tax years for which Form 990 series returns were not filed. However, submission of previously unfiled employment tax returns would not be required for participation in the EOVCP.

A user fee would apply for the EOVCP, and acceptance or rejection into the program would be at the discretion of the IRS.

For returns filed under the EOVCP, no penalties generally would be assessed for late filing, late payment, failure to deposit, or failure to pay estimated tax.

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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