990s to Get Greater Scrutiny

April 7, 2015 Posted by Arthur Rieman in Form 990, IRS, Non-profits, Nonprofits, Uncategorized

IRS to Ferret Out Inconsistent and Error-Laden 990s

Late last month, the IRS announced enhanced electronic processing of Forms 990 that will result in their getting greater scrutiny to ferret out inconsistencies and missing information. According to IRS tax law specialist (and former Los Angeles-based colleague of The Law Firm for Non-Profits) Elaine Leichter, exempt organizations should fill out form 990 as completely as possible and according to the instructions in order to avoid being flagged by new automated processes that may result in an audit.

What is an organization to do to avoid having their 990 flagged? Simple – avoid inconsistencies. Also, filers are warned to not include or omit information the IRS can easily find on public websites.

The new scrutiny will apply to electronically filed 990s. However, Ms. Leichter assured filers that electronically filed returns will not automatically have a greater chance of being audited.

Given the IRS’ recent track record, do you trust the IRS to maintain a level playing field between paper and electronic returns? If your organization has filed an electronic return and been audited would love to know about it. Please add a comment telling us what happened.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607

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