The IRS has articulated that one of its most important goals for 2008 is to enhance compliance with IRS regulations. In 2008, the IRS will participate in the National Research Program, a comprehensive undertaking to study compliance among various groups of taxpayers, including exempt organizations.
The IRS also will begin a new study regarding higher education. The investigation will focus on how colleges and universities:
- Report income and expenses on Form 990;
- Calculate and report losses on Form 990-T;
- Allocate income and expenses in calculating unrelated business taxable income;
- Invest and use their endowments; and
- Determine executive compensation.
Finally, under the PPA, organizations that fail to file an annual return for three consecutive years will have their exempt status automatically revoked. In 2008, the IRS plans to create a voluntary compliance program to allow organizations that have failed to file returns for the three previous years to file the missing returns and pay any late taxes and interest in order to retain their exempt status.