August 20, 2009 | Read Time: 1 minute
The Internal Revenue Service has publicly released educational materials on governance matters that it has been using recently to train its agents and employees.
The IRS says its “areas of interest” include boards that are “active and engaged,” “appropriately sized,” and “composed of primarily independent members.” It adds in boldface type: “Warning — these are areas of interest, not requirements for exemption.”
The materials are of interest to charities because of controversy over the IRS’s role on the topic of governance. The federal tax code does not explicitly set out governance standards for the IRS to enforce, but the tax agency has shown increasing interest in keeping an eye on charities’ governance practices.
For example, the IRS’s revised Form 990 informational tax return, the primary document that charities file each year, includes a series of questions about organizations’ governance policies and practices.
Some charities and legal experts applaud the IRS for its interest in governance matters; others say the revenue service is overstepping its legal authority.
In a speech in June, Sarah Hall Ingram, the top charity regulator at the IRS, said that, once the tax agency had posted the training materials on its Web site, “I invite all who are interested or concerned about what we are up to to review them.”
The IRS’s governance materials are available at http://www.irs.gov/charities/article/0,,id=208454,00.html.
