IRS Audits of Nonprofits

Posted on Wednesday, March 07, 2018

Nonprofit organizations that file Form 990 with the IRS may be selected by the IRS for review.  If your organization is selected, you will receive a letter from the IRS Tax Exempt Organizations (EO) Examinations detailing the type of review required. 

There are different reasons that the organization may be selected for a review.

The IRS has issued Audit Technique Guides (ATGs) to help IRS examiners during an audit of a nonprofit organization.  Although the ATG is designed for IRS examiners, it provides helpful information for nonprofit management and boards by explaining specialized business practices and terminology and common issues of exempt organizations.

The ATG for organizations exempt under IRC Section 501(c)(3) for public charities focuses on the following issues specific to nonprofits.

These are three key issues for nonprofit organizations.  Failure to follow the requirements in any of these areas could possibly lead to loss of tax-exempt status.  For additional information to make sure your nonprofit is in compliance, you can read the entire ATG for public charities on the IRS website. 

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

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