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Charity and nonprofit audits: Initial contact letter/document request

The following is an example of information commonly requested in an information document request:

Please have the following items available for the year to be covered by the examination.

  1. In order to learn background and activities of the organization as well as to view the facilities:
    --Initial discussion between organization representative and Internal Revenue Agent
    --Tour of the organization's facilities 

     

  2. In order to ensure that the organizational test is still met:
    --Governing instruments (Articles of Incorporation, Trust Indenture, Bylaws, Code of Regulations, etc.) including any subsequent amendments
    --Copy of letter granting exemption from income tax received from Internal Revenue Service
    --List of names & addresses of all officers, directors & trustees to include compensation, if paid

     

  3. In order to verify that your activities are exempt activities:
    --Minute books showing any recorded meetings of your governing body (Officers, Directors, or Trustees) including committees
    --Copies of newspapers, newsletters, brochures, magazines, pamphlets and other literature printed
    --Any contracts, leases or agreements to which the organization was a party to in the year under examination

     

  4. In order to verify the correctness of income, gross receipts, deductions and credits and to reconcile the return to your books:
    --Books of account including general ledger, general journal, cash receipts and cash
    --disbursements journal, accounts payable and accounts receivable journal plus subsidiary ledgers and a chart of accounts
    --Auditor's financial statements, year end audit and any work papers and/or schedules necessary to reconcile the return to your books

     

  5. In order to determine whether your organization has properly filed all applicable return/forms for which it may be liable:
    --Federal employment tax returns, Form 940 and Form 941, plus employee earnings records
    --Form W-2 and Form W-4.  In addition, any Form 1099 issued for the year
    --Pension plan information such as latest IRS approval letter plus Form 5500 series filed during the year under examination, and deferred compensation plans or tax sheltered annuities in effect during the year
    --Copies of reports made to other Federal agencies
    --Copies of prior and subsequent year return
    --Correspondence file, if any, with IRS
 
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Page Last Reviewed or Updated: 21-Aug-2014