This table represents the August 24, 2013 status of recommended actions from the Treasury Inspector General for Tax Administration’s (TIGTA) report on IRS’s tax-exempt area. Exempt Organizations Recommended Actions Ending August 24, 2013 No. Recommendation Lead ECD Status* Actions Taken 1 Ensure that the memorandum requiring the Director, Rulings and Agreements, to approve all original entries and changes to criteria included on the BOLO listing prior to implementation be formalized in the appropriate Internal Revenue Manual. Director, Exempt Organizations 06/28/2013 09/30/2013 Completed Because the use of the BOLO lists was suspended (reported in June), the memorandum is no longer operational therefore we are closing this recommendation. However, separately, we are revising the IRM that provides guidance on processing exempt application and have incorporated into the draft comments received from the Taxpayer Advocate and providing training to staff on how to apply appropriate screening criteria. 2 Develop procedures to better document the reason(s) applications are chosen for review by the team of specialists (e.g., evidence of specific political campaign intervention in the application file or specific reasons the EO function may have for choosing to review the application further based on past experience). Director, Exempt Organizations 09/30/2013 Green Assessment of existing documentation and business processes has been completed. An Emerging Issue Committee (EIC) is being established to serve as a central point for consistent and timely resolution for employees and managers needing additional assistance, beyond interim and published guidance, to refer cases and issues. EIC will review and monitor emerging issue referrals and recommend appropriate disposition. EIC will develop a documentation process for the reasons applications are chosen for additional review. 3 Develop training or workshops to be held before each election cycle including, but not limited to, the proper ways to identify applications that require review of political campaign intervention activities. Director, Exempt Organizations 01/31/2014 Green Team continues development of training materials. Internal virtual learning program applications will be used to schedule and monitor training. Training will be incorporated into the FY14 training plan. 4 Develop a process for the Determinations Unit to formally request assistance from the Technical Unit and the Guidance Unit. The process should include actions to initiate, track, and monitor requests for assistance to ensure that requests are responded to timely. Director, Exempt Organizations 06/28/2013 01/31/2014 Completed The new process is documented in written procedures, which enables the use of a spreadsheet-based tracking tool. We are closing this recommendation as the required actions have been completed. However, IRS will expand its efforts through development of a long-term plan. 5 Develop guidance for specialists on how to process requests for tax-exempt status involving potentially significant political campaign intervention. This guidance should also be posted to the Internet to provide transparency to organizations on the application process. Director, Exempt Organizations 06/27/2013 01/31/2014 Green Draft procedures for addressing additional pending cases and future applications involving tax-exempt status have been circulated to EO leadership, EO Determinations, and staff of the office of the Division Counsel/Associate Chief Counsel (TEGE). 6 Develop training or workshops to be held before each election cycle including, but not limited to: a) what constitutes political campaign intervention versus general advocacy (including case examples) and b) the ability to refer for follow-up those organizations that may conduct activities in a future year which may cause them to lose their tax-exempt status. Director, Exempt Organizations 01/31/2014 Green Team continues development of training materials. Internal virtual learning program applications will be used to schedule and monitor training. Training will be incorporated into the FY14 training plan. 7 Provide oversight to ensure that potential political cases, some of which have been in process for three years, are approved or denied expeditiously. Director, Exempt Organizations 01/31/2014 Green As of August 20, 2013, will have closed 85 cases in original backlog (64%). This includes 65 cases that received favorable determination letters including 29 applicants participating in the optional expedited process. Remaining cases continue to be processed. Developed Action Plan for additional pending cases not included in the original backlog. Realigned staffing resources to application processing. 8 Recommend to IRS Chief Counsel and the Department of the Treasury that guidance on how to measure the “primary activity” of I.R.C. § 501(c)(4) social welfare organizations be included for consideration in the Department of the Treasury Priority Guidance Plan. Commissioner, Tax Exempt and Government Entities 05/03/2013 Completed Updated August 2013 Department of the Treasury released the 2013-2014 Priority Guidance Plan on August 9, 2013 and includes guidance under §501(c)(4) relating to measurement of an organization's primary activity and whether it is operated primarily for the promotion of social welfare, and guidance relating to political campaign intervention. June 2013 Recommendation closed last month. On May 7, 2013, EO representatives discussed (c)(4) recommendation with TE/GE Counsel and Treasury Office of Tax Policy. Treasury agreed to include these items in the next Priority Guidance Plan. 9 The Director, EO, should develop training or workshops to be held before each election cycle including, but not limited to, how to word questions in additional information request letters and what additional information should be requested. Director, Exempt Organizations 01/31/2014 Green Team continues development of training materials. Internal virtual learning program applications will be used to schedule and monitor training. Training will be incorporated into the FY14 training plan. * Green = On schedule, Yellow = Behind schedule, Red = Significant issues
