“Reasonable belief” employed to assess tax status complaints

Posted in Not-for-Profit Edge November 2008

Keywords: not-for-profit, tax-exempt status

Have you wondered how the IRS handles complaints challenging a not-for-profit's tax-exempt status? Here's what happens, according to new IRS Fact Sheet 2008-13, issued in February 2008:

After the party complaining submits Form 13909, the complaint—also innocuously called "a referral"—is sent to the Exempt Organization's (EO) Classification Office. There, an EO agent analyzes the allegation. The agent must determine whether the facts support a reasonable belief that the allegations may be true "when considered fairly and in light of other reliable information." The reviewing agent will then find that the complaint does one of the following:

  • Warrants no further action
  • Relates to activities that should be considered at a future date
  • Should be forwarded to an EO committee for evaluation
  • Warrants an examination of the organization. If this is the case, a revenue agent contacts the not-for-profit to schedule an appointment to begin the exam.

If you're targeted for an exam, it's a good idea to contact your CPA.

Questions?
Contact Gen Burns at 312-980-2910.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.


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This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.