The IRS appropriately identified and revoked the tax-exempt status of 279,500 organizations but may have missed thousands of others, the Treasury Inspector General for Tax Administration has said.
It said that while the agency appropriately identified tax-exempt organizations that did not file a return or notice for three consecutive years, the IRS potentially did not identify more than 15,000 organizations that failed to do so because of programming changes that were incomplete.
Further, TIGTA determined that improvements were needed to provide better guidance to organizations for when their tax-exempt status is automatically revoked.
Throughout the review the IRS took actions to address issues as they were brought up, TIGTA said. For example, it said computer programming issues were corrected, guidance provided on an IRS website was updated and changes were made to an electronic filing website to reduce inaccurate address updates.
