March 7, 2002 | Read Time: 1 minute
To determine how well different types of nonprofit groups comply with the tax laws, the IRS this year will begin “market segment” studies of six types of nonprofit organizations, including religious groups, groups that offer donor-advised funds, and social-service organizations, according to an IRS official. The IRS will use the studies to figure out where it may need to step up its enforcement efforts.
Rosie C. Johnson, director of examinations for the IRS’s Exempt Organizations Division, said the revenue service will look at 90 to 120 nonprofit organizations in each category to create a “statistically valid” sample of each type of organization.
In April, the revenue service plans to begin looking at informational tax returns filed by community foundations and other groups that offer donor-advised funds to look for patterns in how such organizations pay employment taxes, declare unrelated business income, and handle other issues. The IRS expects to start work on social-service organizations in July and religious groups, other than churches, in September. Churches are not required to file informational returns with the IRS.
