In addition to scrutinizing donors who claim inflated charitable giving deductions and loans to officers that have generous or no terms of repayment, the IRS will focus in 2008 on universities that have questionable ways of dealing with endowments, the Exempt Organizations Director said on Dec. 13. The IRS also will focus on whether supporting organizations in their third to fifth year of existence continue to qualify as that type of organization.

The Exempt Organizations Unit made significant headway in reducing its backlog of applications for tax-exempt status in 2007 and plans to create a new voluntary closing agreement program in 2008 to enable organizations with unfiled returns for the three most recent tax years to avoid the automatic revocation provisions of the Pension Protection Act of 2006 by filing the missing returns and paying all taxes and applicable interest, without facing any penalties.