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Charity and Nonprofit Audits: Selecting Organizations for Review

Returns filed by exempt organizations are selected for review for a variety of reasons, including:

  • Information on a filed return (Forms 990-EZ, 990, 990-T, or 990-PF) appears to be inconsistent or incomplete.
  • IRS receives a complaint (referral) from the public or a federal or state regulatory agency about potential noncompliance by an exempt organization.
  • The Exempt Organizations Division participates in an IRS-wide examination initiative, such as initiatives generated by the National Research Program.
  • Related returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors.
  • One of the IRS’ document matching programs identifies a discrepancy between information reported by a payor and payee, such as on Forms 1099 or W-2.
  • A claim for refund or request for abatement requires further review.

In some circumstances, an exempt organization may be selected for audit or review even though it has not filed a return, either because it has no filing requirement or it has not filed a required return.

For more information about Exempt Organization’s work plan and priorities, see Tax-Exempt and Government Entities - Annual Priority & Program Letters.

 

 

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Page Last Reviewed or Updated: 08-Nov-2016