Washington (March 31, 2004) -- The American Institute of CPAs is urging the IRS to rework the educational letters it sends to some charitable organizations with contribution income because it says the letters are confusing to the groups that receive them.


According to the institute, the IRS letters inform recipients that they aren't disclosing sufficient fundraising expenses, but don't identify a course of action for the organization to take, the parameters of an investigation, or who the organization should contact at the IRS.


"The AICPA understands the service’s desire for complete and accurate Form 990 information, and agrees that 'soft contacts' by mail can be a useful and important educational tool," states the March 26 letter to Lois Lerner, director of the IRS's Exempt Organizations Division. "However, our members are reporting that these letters are confusing and are creating anxiety among their clients."


"Organizations are not comfortable 'doing nothing' in response to an IRS contact," the letter continued. "We recommend that future letters specify any action the organization should take, and -- at a minimum -- include an IRS contact name and telephone number."


The AICPA also told the IRS it should include information about the purpose of the letters on its Web site and should revise the Form 990 instructions to direct organizations with low fundraising expenses to attach an explanatory statement.


-- WebCPA staff

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access