TE/GE Compliance Program and Priorities

The Internal Revenue Service’s Tax Exempt and Government Entities (“TE/GE”) Division released its fiscal year 2021 Compliance Initiatives. These initiatives align with the Fiscal Year 2021 Program Letter and Strategic goals that have been previously released by the IRS. The list below contains a summary of some the strategies outlined in the release.

• Worker Classification: Review of worker classification of treatment of independent contractors instead of employees.
• Officers treating exempt organization as Schedule C business: Determine if officers and other insiders of exempt organizations are claiming expenses of exempt organizations as business deductions that are taken on Schedule C of the Form 1040, US Individual Income Tax Return.
• Form 990-N Filers/Gross Receipts Model: Determine if exempt organization were eligible to file a Form 990-N, Annual Electronic Filing Requirement for Small Exempt Organizations, where related filings indicate that the $50,000 gross receipts threshold was not met.
• Excise Tax on Excess Compensation: Review of the impact of the IRC 4960 excise tax on excess compensation. Based on a review of IRS data, there is a high volume of exempt organizations that paid compensation over $1 million to at least one “covered employee” but did not file and report on the Form 4720, Return of Certain Excise Taxes Under Chapter 41 and 42 of the Internal Revenue Code.
• Misfiling of Form 990-N by IRC Section 509(a)(3) organizations: Review IRC section 509(a)(3) organizations that file the Form 990-N to determine if the organizations meet the eligibility standards to file the form.
  

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Public Comments Request for IRS 2021-2022 Priority Guidance Plan
The Internal Revenue Service released Notice 2021-28, which it requests comments on the 2021-2022 Priority Guidance plan. This plan will identify guidance projects that the Department of Treasury and Internal Revenue Service will actively work on as priorities from July 1, 2021 to June 30, 2022. Submissions of any comments for consideration for the 2021-2022 priority guidance plan are request by Friday, May 28, 2021 and can be made online via the Federal eRulemaking Portal at www.regulations.gov (using IRS-2021-0004 in the search) or by mail to the following address:

Internal Revenue Service
Attn: CC:PA:LPD:PR (Notice 2021-28) Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044

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