Tracking IRS audit trends. (Eye on the Industry).(audits of nonprofit organizations declined dramatically, but may intensify)

Association Management, November, 2002 by Schuh, Janel S.

The number of nonprofit organizations being audited by the Internal Revenue Service has declined dramatically across the past two decades, according to data collected by ASAE from thousands of nonprofits between 1981 and 2001. From 1979 to 1981, for example, the IRS examined the financial records of more than one third (36 percent) of nonprofit organizations. Only 7 percent, however, reported being audited between 1998 and 2001 (see chart).

A report from the General Accounting Office indicates that this trend may be explained in large part by the IRS's infrastructure. According to an April 2002 report, "Tax-Exempt Organizations: Improvements Possible in Public, IRS, and State Oversight of Charities," the IRS needs different strategies for overseeing the more...

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