The Internal Revenue Service (IRS) recently issued the Tax Exempt & Government Entities (TE/GE) 2019 Program Letter with details of their plans for the upcoming fiscal year. A hefty portion of this relates to tax-exempt organizations but applies to government employers and retirement plan initiatives, as well.
The Letter’s Opening Message
The letter opens with a message from the TE/GE commissioners, in which the commissioners note their expectations for 2019.
A brief overview of key goals includes:
- Expand the use of Pay.gov
- Continue to publish information in the form of videos, articles, and outreach events
- Refine the compliance strategy approach
- Expand efforts to educate taxpayers and help them meet tax obligations, especially related to the Tax Cuts and Jobs Acts (TCJA)
- Further improve their workforce culture
- Expand approaches to identifying non-compliance
- Continue to evaluate the six areas of their compliance program (discussed in the remainder of the program letter)
The letter then outlines the six portfolio programs within the TE/GE compliance platform. They are the following:
1. Compliance Strategies
By utilizing a system of compliance strategies, the TE/GE prioritizes and distributes resources within the TE/GE filing population. TE/GE employees can electronically submit issues to be considered priority projects, ensuring that the TE/GE concentrates on the highest priorities at all times.
Board-approved strategies are also mentioned in this section and throughout the letter and are organized by “Exempt Organizations,” “Employee Plans,” and “Indian Tribal Governments/Tax Exempt Bonds.”
2. Data-driven Approaches
The TE/GE states that they use data to allocate resources and focus on identifying returns of exempt organizations and government entities with the highest risk of employment tax non-compliance.
3. Referrals, Claims, and other Casework
This section outlines what classifies a referral, claim, or other casework. According to the TE/GE, referrals come from outside entities or the IRS alleging non-compliance by a TE/GE person. Moreover, claims are defined as “requests for refunds or credits of overpayments of amounts already assessed and paid,” including tax, penalties, and interests/adjustment of tax paid or credit not previously reported or allowed. Lastly, other casework addresses entities that filed and received exemption under Form 1023-EZ.
4. Compliance Contacts
Compliance checks are correspondence contacts that the TE/GE use to establish a presence in the taxpayer community. This attempts to lower the cost to taxpayers and the IRS.
5. Determinations
Determination letters are provided to exempt organizations and qualifying retirement plans regarding their classification and exempt status. This section of the letter states that Exempt Organizations (EO) anticipate an increase in determination applications received, and they plan to hire roughly 40 new revenue agents to process them.
6. Voluntary Compliance and other Technical Programs
Highlighted in the final portion of the letter, the TE/GE writes that the Employee Plans (EP) program will continue to “review input from the qualified plans community” on expanding the “self-correction of plan qualification failures” under the Employee Plans Compliance Resolution System (EPCRS) program. The EP will also “focus on actuarial letter rulings, 60-day rollover waivers, and technical assistance work for its taxpayers.”
For more information, please reach out to your Sikich representative or contact us today.
