This course examines how tax-exempt organizations should navigate IRS examinations, investigations, and related litigation in the current enforcement environment. It will address examination control, information-document requests, interviews, summonses, eggshell-audit concerns, and the principal legal theories that may threaten exempt status, including revocation, the fundamental-public-policy doctrine, illegality, and Section 501(p). The program will also analyze potential criminal exposure under Titles 26 and 18, recent enforcement priorities, and the evidentiary significance of Form 990 filings, governance records, donor representations, payroll taxes, and federal funding certifications. Attendees will receive practical guidance on privilege, internal investigations, remediation, forum selection, and coordinated responses to IRS, DOJ, state attorney general, and congressional scrutiny.
Principles
- Effective Management of IRS Examinations Requires a Coordinated Response
- Tax-exempt organizations should respond strategically to IRS examinations by managing information document requests (IDRs), interviews, summonses, and interactions with enforcement agencies while preserving legal rights and maintaining accurate records.
- Organizations Must Understand the Legal Standards That Can Jeopardize Exempt Status
- Exempt status may be challenged under doctrines involving revocation, fundamental public policy, illegality, and Section 501(p). Recognizing these risks enables organizations to identify potential compliance issues and implement corrective measures.
- Civil Tax Examinations Can Present Criminal and Enforcement Risks
- IRS examinations may raise concerns beyond civil tax compliance, including potential criminal exposure under Titles 26 and 18, particularly in eggshell audit situations. Early assessment of referral risk and careful handling of sensitive issues are essential.
- Governance, Documentation, and Internal Investigations Are Critical to Risk Management
- Form 990 filings, governance practices, compensation decisions, donor representations, payroll tax compliance, and federal funding certifications can significantly affect enforcement outcomes. Organizations should use privilege, internal investigations, remediation, and thoughtful litigation strategy to respond effectively to IRS, DOJ, state attorney general, and congressional scrutiny.
Syllabus
- Current IRS and DOJ enforcement priorities
- Managing exempt-organization examinations and IDRs
- Eggshell audits and criminal-referral risk
- Revocation, public-policy, and illegality doctrines
- Section 501(p) suspension and designation risk
- Form 990, governance, compensation, and private benefit
- Title 26 and Title 18 criminal exposure
- Privilege, internal investigations, and litigation strategy
