The BNN Tax-Exempt Organizations Blog

Posts tagged post-issuance bond compliance

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IRS Is Looking to Use Form 990 Schedule K to Audit Exempt Organizations

This year’s AICPA National Not-For-Profit Industry Conference in Washington D.C. in June generated a lot of buzz with respect to Form 990’s Schedule K. If your organization has tax-exempt bond debt and files Form 990, you may be aware that the 2012 version of Schedule K featured some new questions. These questions were added to collect data on how closely organizations monitor their compliance with tax-exempt bond regulations. However, one of the biggest takeaways from this portion of the conference was that the IRS intends to use the answers to these questions as a potential trigger for an audit examination.

Arguably the largest area of focus for the IRS in the exempt organization world has been and continues to be unrelated business income (UBI). To that end, for a number of years, the IRS had been using the redesigned 990 to gather information about colleges and universities as there were perceived abuses specifically related to their athletic programs. Over the past couple of years the IRS used the information collected in annual 990 filings to examine these institutions for potentially unreported UBI. As the window on these examination projects begins to close, the IRS appears to be turning its attention to other types of exempt organizations – most notably hospitals and organizations maintaining tax-exempt bonds.