This post was originally published on Forbes Apr 30, 2015
If you are weary of the interminable, never ending IRS scandal - now on Day 721 by the TaxProf count -, you may see a glimmer of hope in the report released today by the Treasury Inspector General for Tax Administration. The report is titled Status of Actions Taken to Improve the Processing of Tax-Exempt Applications Involving Political Campaign Activities (downloads as a pdf).
We reviewed the Emerging Issues Committee charter and related procedures and confirmed that EO function senior managers on the committee determine if emerging issues require further development. This elevates the review process above the front-line manager level in the Determinations Unit. In addition, we reviewed committee meeting minutes and resulting referrals. All of the documentation we reviewed indicates that decisions on referrals containing emerging issues are being made based upon activities and not names or policy positions. Since decisions are made by a committee and not a single front-line manager, as we found in our previous audit, the approvals provide increased assurance that emerging issues are being considered impartially.
For I.R.C. § 501(c)(4) applications, the IRS designed an optional expedited process in which Determinations Unit specialists send a letter to organizations whose applications include indications of political campaign intervention. Organizations can choose to make representations to the IRS under penalties of perjury regarding their past, current, and future activities and receive a determination letter based on those representations.
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