EO Implementing Guidelines/Workplan for Fiscal 2002 Now Available

The 2002 Implementing Guidelines and Plan (which replaces "Workplan Guidelines") identifies the goals, strategies, and priorities of the Office of the Director (EO), Customer Education and Outreach, Rulings and Agreements, and EO Examinations.

Fiscal 2002 initiatives for the Office of the Director (EO) will include reassignment of determinations work from the director of examinations to determination groups reporting to Rulings and Agreements. The EO Division also plans to continue its work in developing electronic filing options for Forms 990.

EO Customer Education and Outreach (CE&O) will focus on recruitment and development of a multiyear education and outreach plan. CE&O also plans to hold one-day conferences for small and midsize exempt organizations and will participate in pilot programs for health care entities, colleges, and universities and with the National Association of Attorney Generals, the National Association of State Charity Officials, or both. With the help of Rulings and Agreements, the EO Division also plans to initiate or update various publications addressing topics such as churches, charitable contributions, and section 527 organizations

In addition to its work with CE&O, Rulings and Agreements will work with IRS Counsel and Treasury on intermediate sanctions and corporate sponsorship regulations and will cultivate projects on the IRS/Treasury Business Plan, such as a guidance project explaining allocation of expenses in determining unrelated business income tax.

One of the goals of EO Examinations in 2002 is to stimulate voluntary compliance by allocating resources to include activities other than traditional examinations. "The FY 2002 plan also recognizes EO Examinations's role in education and outreach and acknowledges that we can no longer limit our exam resources to conducting "traditional" examinations," the Guidelines note. EO Examinations will also begin a six-market-segment study in 2002 to assess the characteristics and compliance risks associated with each segment. The six segments are (1) section 501(c)(7) social clubs; (2) section 501(c)(5) labor organizations; (3) section 501(c)(6) business leagues; (4) community trusts; (5) social services; and (6) religious organizations (excluding churches).

Compliance projects include plans to (1) contact section 527 organizations with inconsistent data listed on Forms 8871 and 8872, (2) verify the compliance of certain private schools that have failed to file Form 5578, (3) follow-up on Forms 990 that revealed rental income and mortgage payable but no corresponding Forms 990-T, and (4) create cross-functional task forces to determine the level of compliance among section 501(c)(15) organizations and donor-advised funds.

[Editor's note: The full text of this document will appear in a future issue of Tax Notes Today. Alternatively, this document may be obtained from Tax Analysts as Doc 2001-25747 (103 original pages) [PDF].]