By Jake Cook, CPA
The IRS Tax Exempt and Government Entities division released its fiscal year 2022 Program Letter on October 7, 2021, summarizing its plans for the upcoming year. The Program Letter addresses the division’s projects and priorities for fiscal year 2022 for tax-exempt organizations, employee benefit plans, Indian tribal government and tax-exempt bonds.
The TE/GE division provides taxpayers assistance to properly file and pay their taxes while also enforcing the tax laws to maintain fairness for all.
The division reports that fiscal year 2022 will be a year of growth and change. TE/GE plans to invest in new resources to expand outreach to the tax‑exempt sector and to increase their enforcement staff to balance their obligation to serve taxpayers as well as enforce the tax laws. For nearly a decade, the TE/GE division’s workforce has declined annually. New employees hired under the growth plan in fiscal year 2022 will focus on enforcement duties.
The hiring of new TE/GE agents focused on enforcement may mean that tax‑exempt organizations could expect an increase in compliance audits and reviews. During these audits and reviews, taxpayers should be patient with the new agents.
The TE/GE division plans to continue its efforts to create a user‑friendly experience for the tax‑exempt community. For example, it will continue to build on its 2021 investment in a new Chief Tax Experience Officer and the opening of the Taxpayer Experience Office, with a focus on multilingual assistance, increased digital services, proactive outreach and advanced data analytics. It will be more important than ever to focus on the accuracy of filings, as selection for compliance audits and reviews will continue to become more data‑driven than random sampling.
The TE/GE division works to carry out its plans while striving to improve efficiency and modernize processes to best utilize government resources. The new Program Letter focuses on the following actions for the upcoming year.
Strengthen Compliance Activities
Compliance strategies are issues approved by the TE/GE’s Compliance Governance Board to identify, prioritize and allocate resources within the TE/GE filing population. The current priorities are:
Improve Operational Efficiencies
As noted previously, the IRS is striving to improve efficiency by incorporating the following steps:
Maintain a Taxpayer-Focused Organization
The IRS is focused on assisting organizations with compliance through the following actions:
Ensure Awareness and Collective Understanding
The IRS is striving to make changes and emphasize the collaborative nature of its relationship with taxpayers by:
Leverage Technology and Data Analytics
As many other organizations, the IRS is focusing on the utilization of technology and data analytics to:
Develop IRS Workforce
To address past labor shortages, the Program Letter lists the following action plans:
Management at exempt organizations should be aware of the role the TE/GE division plays, consider the potential implications the plans outlined in the Program Letter may have on their organizations and consult with their tax advisors as necessary.
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