This table represents the June 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 June 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 Green Memo issued on May 17, 2012 Memo suspending use of BOLO spreadsheet and outlining alternative procedures, dated June 20, 2013, was issued to staff on June 21, 2013 Provide training to staff on how to apply the appropriate screening criteria in the absence of BOLO lists 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 Commissioned Team and requested members from other business units within the IRS to develop procedures Team formed and conducted initial meetings week of June 17, 2013 Team to also review the process associated with the selection of applications for tax exempt status for further 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 Engaged Determination Manager to initiate development of training material and establish delivery timeline TEGE Counsel agreed to review training materials produced Met with Internal Revenue Manual (IRM) Coordinator to discuss expedited clearance process Training to be delivered close in time to next election cycle 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 Green Formalized the process of coordination between EO Determinations Unit, Technical Unit, and Guidance Unit Short Term: Designed Excel template to track/monitor “Requests for Assistance.” Delivered snap shot of key data elements Long Term: Engaged Business Systems Planning to research subsequent electronic solutions 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 Instituted a new review process and expedited self-certification option for priority backlog cases IRS Chief Counsel has assigned six additional attorneys to support EO Technical team in handling the most complex cases related to political campaign intervention, beginning on June 11, 2013 Engaged TE/GE Exempt Organizations, Communication Education and Outreach on posting revenue rulings and any subsequent materials to the Internet Working on strategy to address future applications for tax exempt status, to include further guidance from IRS Chief Counsel as necessary 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 Engaged Determinations Manager to initiate development of training material and establish delivery timeline TEGE Counsel agreed to review training materials produced Training to be delivered as needed, and in particular close in time to next election cycle 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 Developed Action Plan for Advocacy Case Inventory Backlog Verified that potential political 501(c)(4) cases are classified and assigned Provided additional clerical staff and instructions to EO Determinations Unit to assist in addressing backlog cases Developed new expedited process for approval of priority backlog, based on applicants self-certifying to certain levels of political and social welfare activity using specified safe harbors for counting activities Reviewed cases to determine if files are complete and whether they involve potential issues of private inurement to determine eligibility for new expedited process As of week of June 24, 2013, will have closed 34 cases in original backlog (26%) Representation letters will be sent to applicants week of June 24, 2013 with the opportunity to self-certify 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 Competed 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 Engaged Determination Manager to initiate development of training material and establish delivery timeline TEGE Counsel agreed to review training materials produced Office of Taxpayer Correspondence will create guidance on the appropriate content and wording of questions for use by the case workers * Green = On schedule, Yellow = Behind schedule, Red = Significant issues
