Exempt Organizations - Potential Examination Consequences

An examination can result in the following actions:

  • No change to the organization's exempt status or tax liability,
  • No change to the organization's status or liability, with an advisory and later IRS follow-up to see if advice has been followed,
  • Imposition of tax (unrelated business income, employment, or excise) and/or penalties,
  • Revocation of the IRS's determination that the organization is tax-exempt, and/or
  • Reclassification of foundation status (for § 501(c)(3) organizations and § 4947(a)(1) trusts only).

Return to Life Cycle of a Public Charity

Return to Life Cycle of a Social Welfare Organization

Return to Life Cycle of a Labor Organization

Return to Life Cycle of an Agricultural or Horticultural Organization

Return to Life Cycle of a Business League (Trade Association)