Tax Administration:

Availability and Completeness of Returns for Tax-Exempt Organizations

GGD-88-128: Published: Sep 30, 1988. Publicly Released: Sep 30, 1988.

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Jennie S. Stathis
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In response to a congressional request, GAO reviewed Internal Revenue Service (IRS) procedures to determine whether: (1) IRS could locate and provide requested Form 990 annual information returns, which tax-exempt organizations filed; and (2) the Form 990 returns were complete.

GAO analyzed 450 sample Form 990 returns and estimated that: (1) IRS could locate about 99 percent of requested returns if the requester provided the name that the organization used to obtain its tax-exempt status; (2) IRS would provide about 95 percent of the requested returns, with the remaining returns in use internally; (3) 48 percent of Form 990 returns were missing one or more of the required supporting schedules, and 95 percent were incomplete, according to IRS criteria; and (4) although supporting schedules provided detailed information concerning such activities as fund-raising and payments to affiliates, IRS did not include them in its Incomplete Returns Program criteria.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: A review of the IRM instructions indicated that internal procedures are adequate. On June 1, 1989, memorandums were issued by both Returns Processing and Exempt Organizations to stress the importance of providing copies of 990's to requesters. The memorandums highlighted applicable sections in the IRM.

    Recommendation: The Commissioner of Internal Revenue should establish procedures to ensure that copies of requested Form 990 returns being used internally are provided to requesters.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  2. Status: Closed - Implemented

    Comments: New Form 990-EZ eliminated the need for many organizations to supply supporting schedules. In addition, management determined that four required supporting schedules could be incorporated into the revised Form 990.

    Recommendation: The Commissioner of Internal Revenue should expand the criteria for the Incomplete Returns Program to ensure that missing Form 990 return supporting schedules are obtained from tax-exempt organizations.

    Agency Affected: Department of the Treasury: Internal Revenue Service


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