United States

TE/GE program letter highlights FY 22 compliance initiatives

TAX ALERT  | 

On Oct. 7, 2021, the IRS Tax Exempt and Government Entities (TE/GE) division released its 2022 Program Letter, summarizing its goals and priorities for the fiscal year ending Sept. 30, 2022. The 2022 Program Letter adopts the same streamlined approach that TE/GE adopted last year. In addition, TE/GE continues to provide quarterly updates to its Compliance Programs and Priorities webpage.

TE/GE’s fiscal year 2022 priorities continue to align with the IRS’s overall strategic priorities and fall within six categories: strengthen compliance activities, improve operational efficiencies, maintain a taxpayer-focused organization, ensure awareness and collective understanding, leverage technology and data analytics, and develop our workforce.

Among the priorities for 2022, TE/GE will focus on the following compliance activities:

  • Syndicated conservation easements
  • Abusive charitable remainder trusts (CRTs)
  • Employee stock ownership plans (ESOPs)
  • COVID-related employer credits
  • Private foundation and retirement plan audits for high-income taxpayers

The items on this list represent areas which may be prone to non-compliance and the IRS will use a number of methods (e.g., examinations or letter inquiries, among others) to try to increase compliance. In addition, TE/GE will promote the e-filing of Forms 1024, Application for Recognition of Exemption under section 501(a), as well as other exempt organization and employee plan returns. TE/GE will also develop online resources and promote online access to publicly disclosable filings.

Compliance Programs and Priorities webpage

Last updated on Oct. 7, 2021, the webpage indicates that TE/GE will continue to pursue the compliance program described in program letters for prior years and will update the page to share information about other compliance initiatives as they launch. The webpage will also share findings from recently completed program initiatives.

The webpage does not list any additional compliance initiatives from those that were added in April 2021. However, a number of initiatives have been removed:

  • Exempt organizations: Officers treating exempt organization as Schedule C business
  • Exempt organizations: Form 990-N/gross receipts model
  • Tax exempt bonds: Form 8038-G yield restriction
  • Tax exempt bonds: Student loan bonds market segment
  • Employee plans: Inflated assets
  • Employee plans: Partial termination/partial vesting

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