The IRS stated on October 15 that it is considering increasing penalties for exempt organizations that fail to completely fill out the Form 990. The idea was introduced at a D.C. Bar Taxation Section Exempt Organizations Committee panel, during which Roger Colinvaux, a former Joint Committee on Taxation legislation counsel, said now that there is a new Form 990, there should be a new penalty structure to go along with it. According to Colinvaux, “once you’ve got a new form, the time to strike is right away, to follow up with significant enforcement efforts and send a signal to the sector that forms that are not completely filled out will not be tolerated.” He suggested two possibilities: either making charity managers personally responsible for incomplete forms from the get-go or expanding the current rule that failure to file a form for three consecutive years leads to loss of tax exemption to cover forms that are incompletely filled out over that period. Currently, there is an organization-level penalty for failure to complete the form; managers, however, are given an opportunity to respond to an IRS demand letter and rectify the situation before personal responsibility kicks in. Now that the Form 990 has been redesigned to capture more information about the exempt sector, there is a heightened expectation that the IRS will do something with the information. Among other things, the IRS likely will build compliance initiatives based on the information.