What Is Going on With Church Audits?

• DOI: http://doi.org/10.1002/npc.30325
• Published date: 01 June 2017
• Date: 01 June 2017

THE LAW OF TAX-EXEMPT ORGANIZATIONS MONTHLY

PRESIDENT SIGNS

EXECUTIVE ORDER

FOR REVIEW OF TAX

REGULATIONS

President Trump, on April 21, signed an executive order requiring the

Department of the Treasury to “immediately review all significant tax regulations”

issued by the department on or after January 1, 2016. In consultation with the

administrator of the Office of Information and Regulatory Affairs in the Office of

Management and Budget, the secretary of the Treasury is to identify in an interim

report to the president all regulations that (1) impose an “undue financial bur-

den” on US taxpayers, (2) add “undue complexity” to the federal tax laws, or (3)

“exceed the statutory authority” of the IRS. This report is to be completed within

60 days of the order’s date (June 10).

Within 150 days of the order’s date, the Treasury secretary is required to submit

to the president a report that recommends “specific actions to mitigate the burden”

imposed by the regulations identified in the interim report. The secretary is to take

“immediate steps” to cause the effective date of these regulations to be delayed or

suspended, and to modify or rescind regulations as may be appropriate and lawful.

To ensure that future tax regulations adhere to this policy, the secretary and

the director of the OMB must review and, if appropriate, reconsider the scope

and implementation of the existing exemption for certain tax regulations from the

review process set forth in Executive Order 12866 and any successor order (see

the November 2016 and April 2017 issues). ◆

WHAT IS GOING ON WITH CHURCH AUDITS?

The nonprofit community has been, for years, witnessing drift when it comes

to church audits (inquiries and examinations pursuant to IRC § 7611). Matters

seemed to have come to a halt when, following litigation, the IRS proposed a

regulation identifying the position in the IRS bureaucracy with authority to initi-© 2017 Wiley Periodicals, Inc.

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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 34 Number 6

June 2017

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Tangled Webs Woven

With CRT 2

Refreshing PLR Marred

by Four Errors 3

Organizational Test Corner 4

Informative, Strange PLR 4

No Line of Business Represented,

No Exempt Business League 5

Deer Herd Loss Mitigation Not

Agricultural Activity 5

Promises to Not Charitably

Deduct 5

Other Recent IRS Private Letter

Rulings 6

Court to Rule on Whether

Activity, Where Income Offset by

NOLs, Is a “Business” 6

Status of American Health Care

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Tax Practitioners Offer

Modernization Advice to IRS 7

Other Developments 8