IRS ACT – Action in the Not-For-Profit Community
The Internal Revenue Service (IRS) Advisory Committee on Tax Exempt and Government Entities (ACT) “provides an organized public forum for members of the tax-exempt and government entities communities to discuss important tax issues of the day with IRS officials. ACT members provide observations about current or proposed IRS policies, programs and procedures, and suggest improvements through a yearly final report.” The recommendations in the recently released 2016 report include:
- Communication: The ACT report indicated a desire to “find ways to solicit input from a greater number of voices (including small nonprofits) and provide open channels for stakeholders to take issues to the IRS.”
- Determination letter: The ACT report describes a need to revise the IRS tax-exempt determination letter “to educate exempt organizations on their tax obligations and responsibilities.”
- Flexibility: The ACT report notes the IRS should be more flexible and user-friendly, especially with respect to certain programs geared towards employee benefit plans. The ACT received feedback that current IRS programs are not flexible enough to meet the needs of certain benefit plans. For example, the current IRS Pre-Approved Plans Program currently does not include certain plan types such as multi-employer plans and 401(k) plans that have non-safe harbor hardship provisions.
- Resources for tax-exempt organizations: The ACT report suggested increasing expert resources with the IRS tax-exempt and government entities phone customer service and other resources.
- Tax-exempt bonds: The ACT report also recommends revisions to IRS Form 8038 for tax-exempt private activity bond issues. These changes could include electronic filing, which will give more data about market segments and tax compliance to assist in the examination process.
For further information on the ACT and its deliberations, please see a full summary of its most recent meeting here.