Washington, DC - UL alumnus and Chairman of the Subcommittee on Oversight, Charles Boustany, sent a letter on October 6 to Internal Revenue Service Commissioner Shulman requesting general information on the tax-exempt sector, including updates on IRS audit and compliance activities related to tax-exempt organizations.  He included specific questions about universities and hospitals in his request.

The request follows a joint hearing of the Subcommittees on Oversight and Health that reviewed activities undertaken by one of the nation’s largest tax-exempt organizations, AARP.

Chairman Boustany’s letter requests the IRS provide information on five specific areas related to the tax-exempt sector by October 20, 2011:

To locate the specific chapters cited below from the Internal Revenue Code (IRC) click here.

1. Overview of the tax-exempt sector

“How many tax-exempt organizations have been audited since 2008? Provide a breakdown of all audits opened for each type of tax-exempt entity, the issues identified for audit, and the current status of such audits. What was the average length of a tax-exempt audit during this period?”

2. Compliance

“Provide a detailed explanation of how the redesigned Form 990 increased transparency and accountability of tax-exempt organizations.”

3. Unrelated business income

“In 2009, the Congressional Research Service estimated that revenues from tax-exempt organizations were $1.4 trillion and the value of assets held by tax-exempt organizations totaled $2.6 trillion. Provide IRS data regarding the revenue and assets of tax-exempt organizations for 2008, 2009, and 2010.”

4. Audit process

“Explain how the IRS reviews allegations of excessive political campaign activity by tax-exempt organizations.”

5. Current tax-exempt enforcement initiatives

“What steps is the IRS taking to comply with the requirement under IRC §9007(e) of Pub. L. 111-148, Patient Protection and Affordable Care Act, to submit an annual report to Congress, including the Ways and Means Committee, regarding the level of charity care provided by all hospitals (taxable, charitable, and government)?”

His questions on hospitals and universities follow.  For the full text, click here.

Hospitals

  1. Describe the IRS's current plans to comply with the new requirement in IRC §4959 to review, at least once every three years, the community benefit activities of each hospital organization that is subject to the requirements under IRC §501(r).
  2. What steps is the IRS taking to comply with the requirement under IRC §9007(e) of Pub. L. 111-148, Patient Protection and Affordable Care Act, to submit an annual report to Congress, including the Ways and Means Committee, regarding the level of charity care provided by all hospitals (taxable, charitable, and government)?

Universities

  1. On May 7, 20 10, the IRS issued its interim report on the colleges and universities compliance project. What is the status of the final report and when does the IRS anticipate completing the final report?
  2. Based on college and university responses to the compliance project questionnaire, the IRS has initiated audits looking at a number of issues, including excessive compensation and unrelated business income.
  • Provide a detailed explanation of how the IRS is identifying and selecting issues for audit as part of the college and university compliance project.
  • List all issues the IRS has identified for audit related to the college and university compliance project.

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