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Additional Information on Tax-Exempt Sector Compliance Requested

March 01, 2012

Washington, DC – Today, Subcommittee on Oversight Chairman Charles Boustany (R-LA) sent a letter to Internal Revenue Service (IRS) Commissioner Shulman requesting a complete response to a previous request on general information on the tax-exempt sector, IRS audits and compliance activities related to tax-exempt organizations.  The letter also requests additional information following reports that the IRS was questioning certain tax-exempt applicants, including grassroots political entities such as local Tea Party groups, about their operations and donors.

In the letter, Boustany requested the following information by no later than March 15, 2012:

  1. How many new tax-exempt organizations has the IRS recognized each year since 2008?
  2. How many new applications for 501(c)(3) and (c)(4) tax-exempt status have been received by the IRS since 2008?  Provide a breakdown by year and type of organization.
  3. What is the IRS process for reviewing each tax-exempt status application?  Is this process the same for entities applying for section 501(c)(3) and (c)(4) tax-exempt status?  Please describe the process for both section 501(c)(3) and (c)(4) applications in detail.  
  4. Your preliminary response in my October 6, 2011, letter stated that, “if the application is substantially complete, the IRS may retain the application and request additional information as needed.”  How does the IRS determine that an application for tax-exempt status is “substantially complete?”  Please provide guidelines or any other materials used in this process.  
  5. Does the IRS have standard procedures or forms it uses to “request additional information as needed” from applicants seeking tax-exempt status?  Please provide any forms and related materials used.  
  6. Does the IRS select applications for “follow-up” on an automated basis or is there an office or individual responsible for selecting incomplete applications?  Please explain and provide details on any automated system used for these purposes.  If decisions are made on an individual basis, please provide the guidelines and any related materials used.  
  7. How many tax-exempt applications since 2008 have been selected for “follow-up”?  How many entities selected for follow-up were granted tax-exempt status?