Melissa Wiley was quoted in a Thomson Reuters Checkpoint article titled “Inside Tax-Exempt Status Audits, Revocation Challenges.”
The article discusses emerging trends in tax-exempt organization enforcement, as discussed by Melissa and others during a panel at the American Bar Association (ABA) Virtual Fall Tax Conference.
According to the panelists, the number of tax-exempt organizations has significantly grown, with about 1.9 million exempt organizations now recognized by the IRS. To address this significant increase, the IRS has adopted more data-driven approaches to improve oversight and identify noncompliance.
Once an organization is identified for audit, it typically then receives one or more information document requests (IDRs) for a wide range of records. “Normal procedures largely apply,” Melissa said regarding these requests. “Expect third-party contacts, interviews, and site visits, which is all very similar to what we would see in representing a taxable client.”
Common noncompliance issues that put exempt organizations at risk for status revocation include poor internal controls, omission or inaccurate reporting of unrelated business income, and failure to file the correct forms. Melissa said that small tax-exempt organizations often struggle to implement best practices for keeping such records, which leads to noncompliance.
To ensure a smooth audit or appeal, Melissa recommends that small organizations keep printed copies of key IRS guidance on hand and use The Wayback Machine to research historical website content. “Take a look at all of your controls and procedures you have in place and make sure you really need all of them, because the last thing you want are a bunch of policies not legally required … especially because a lot of the exempt organizations we work with are on the smaller side.”
Read the complete article here.
About Melissa
With more than 20 years of experience in tax law, Melissa has represented a diverse range of clients, from large corporations to high-net-worth individuals, in complex disputes with federal and state taxing authorities. Known for her calm, empathetic style, Melissa excels at distilling intricate tax issues into clear, actionable insights — helping her clients efficiently resolve disputes and focus on what matters most in their businesses and lives.
