TE/GE Division Issues (Mini) FY 2021 Program Letter

• Published date: 01 January 2021
• Date: 01 January 2021
• DOI: http://doi.org/10.1002/npc.30805

THE LAW OF TAX-EXEMPT ORGANIZATIONS MONTHLY

TE/GE DIVISION

ISSUES (MINI) FY 2021

PROGRAM LETTER

The Tax Exempt and Government Entities Division of the IRS, on November

5, made public its Program Letter for FY 2021 (Pub. 5313). As a cover letter from

the TE/GE commissioners states, this letter this time around is a more “compact

summary” (one page) of the division’s goals compared to prior years’ letters

(which themselves were rather compact in relation to their predecessors). The

principal reason for the shrinkage is that updated information will be provided on

a new “Compliance Programs and Priorities” webpage.

This program letter leads with an emphasis on the strengthening of com-

pliance activities. It singles out syndicated conservation easement promotions,

abusive charitable remainder annuity trusts, and private foundations. Mention is

made of the use of “enhanced techniques” to develop civil and criminal fraud

and promoter investigation cases, and the recommendation of civil penalties and

criminal prosecutions against taxpayers and promoters who “evade the assess-

ment or payment of taxes.”

Another focus is on the leveraging of technology and data analytics. These

efforts entail the utilization of “noncompliance research and data analytics to

detect emerging issues,” expansion of “taxpayer digital communications efforts”

and use of “robotic process automation” to make processes more efficient and

effective, and continuation of comparative data analysis of Form 990-N and

1023-EZ filings to identify trends and emerging issues. Reference is made to

collaboration with the Research Applied Analytics & Statistics function to improve

identification of issues with a “high risk for noncompliance.”

A priority for the division is assistance of the IRS generally in implementation

of the Taxpayer First Act (summarized in the September 2019 issue). This objec-

tive includes expansion of e-filing of Forms 990 series and continuation of work

toward “electronic determination letter applications.”

Other goals expressed in the FY 2021 Program Letter are review of systems

and processes to improve efficiencies and internal controls, proactive communica-

tion with communities the division serves to encourage compliance with the tax

laws, and enhancement of employee and manager development through training

and “developmental assignments, coaching and mentoring.” [2.3] ◆

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DOI:10.1002/npc

Analysis of current developments in tax

and related law for nonprofit organiza-

tions and their professional advisors.

Volume 38 Number 1

January 2021

Also in This issue...

Another Appellate Court

Reverses in Conservation

Easement Case 2

Conservation Easement’s

Valuation Held to Support

Promotion, Unreasonable 3

Façade Easement Deductions

Saved Due to Ineffectual Local

Law Enforcement 3

Court Upholds Third-Party

Summons in Conservation

Easement Examination 4

GAO Critical of IRS’s

Administration of Community

Benefit Standard 4

Transfers Between DP Trusts

Ruled to Not Give Rise to

Foundation Expectancy 5

Private Benefit Doctrine

Precludes Exemption 6

Distributions From Foreign

Charity Ruled to Trigger Gift Tax 6

Supreme Court Appears Likely to

Again Rescue ACA 7

Other Recent IRS Private Letter

Rulings 7

Forms, Anyone? 7

Affirmative Action Litigation

Update 8

Other Developments 8