May 10th, 2012 | Comments Off on Current IRS Concerns for Exempt Organizations: Good Governance and Tax Compliance

The Director of Exempt Organizations for the IRS, in a recent speech, revealed several matters of concern for the Service.

Second, in a non-scientific survey, IRS found that “good governance”  is associated with “tax compliance.”

Organizations are more likely to be compliant if they:

  • have a written mission statement,
  • always use comparability data when making compensation decisions,
  • establish procedures for the proper use of charitable assets, and
  • have the Form 990 reviewed by the entire board of directors.

This may be an more association than causation but it reinforces that if you pay attention to all aspects of your governance, the organization is more likely to stay out of trouble.