IRS Ramping Up Its Focus on Tax-Exempt Entities

The news: “IRS auditors who focus on tax-exempt groups will be kept busy this year. Among the issues they’ll be eyeing … Charities that run afoul of the private benefit and private inurement prohibitions. ... Misclassification of workers. And groups that operate gaming activities such as bingo. More examiners will be brought on board. After an almost 10-year drought in hiring and loss of a significant portion of its workforce, IRS now has job openings for revenue agents in both its exempt organizations and employee plans programs.” –Kiplinger Letter

The Church Law & Tax take: Several resources and articles are available to help address the topics the IRS plans to target. Chapters 4, 5, 6, and 7 of the Church & Clergy Tax Guide, as well as Chapters 2 and 3 of Church Compensation: From Strategic Plan to Compliance address private benefit and private inurement issues specifically for ministers and church leaders. Chapters 4 and 5 of Church Compensation also address worker classifications for churches. This unrelated business income article discusses bingo games and their effect on churches.

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