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Charity and Nonprofit Audits: Exempt Organizations Audit

To conduct a quality audit, the revenue agent must review the operations and records of the organization. The revenue agent will provide a written request - an information document request - for records.

For example, an information document request may ask for the organization’s

  • Organizing documents and other information
    • Articles of incorporation
    • By-laws
    • Board minutes
    • IRS exemption determination letter
    • Application for exemption (Form 1023 or 1024)
    • Correspondence to/from the Internal Revenue Service
  •   
  • Books and records  
    • Trial balance (beginning and ending balances)
    • General ledger
    • Subsidiary journals (e.g., cash receipts, cash disbursements)
    • Bank statements and cancelled checks
    • Sales receipts
    • Donations received
    • Purchase invoices
    • Deeds and other title documents
    • Contracts, leases, mortgages and loans

See Sample IDR for a list of information typically requested in an audit of a tax-exempt organization.

 
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Page Last Reviewed or Updated: 21-Aug-2014