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IRS TE/GE compliance priorities, 2021 program letter

IRS TE/GE compliance priorities, 2021 program letter

The Tax Exempt and Government Entities (TE/GE) division today released a fiscal year 2021 “program letter” that sets out the TE/GE compliance priorities as well as noting how these priorities align with IRS strategic goals.

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The program letter (alternatively called a “work plan” or “priority letter” in past years) takes a new form this year—a one-page summary of IRS goals as opposed to the more detailed, multi-page documents that have been issued in years past.

Among the six general priorities listed in the FY 2021 program letter is “strengthening compliance activities” by, for example:

  • Collaborating across the IRS on existing and emerging issues, such as syndicated conservation easements an abusive charitable remainder annuity trusts
  • Supporting tax compliance in the global high wealth arena, especially for private foundations and retirement plans of closely held businesses, such as employee stock ownership plans

Read the Fiscal Year (FY) 2021 Program Letter [PDF 503 KB] 

Compliance priorities for FY 2021

In a related release (November 5, 2020), the TE/GE division explained that in fiscal year 2021, it will continue to pursue the compliance programs described in the FY 2020 program letter and will share information about new compliance priorities at the end of each quarter during the fiscal year.  The TE/GE release lists the following four priorities for FY 2021:

  • Exempt organizations—excise tax on excess compensation: Review the “high volume” of exempt organizations paying compensation in excess of $1 million to at least one “covered employee” but not reporting section 4960 excise tax on Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code
  • Exempt organizations and governments—Form W-2 and 1099-MISC to the same payee: Review payors that have issued both a Form W-2, Wage and Tax Statement, and Form 1099-MISC, Miscellaneous Income, to the same payee in the same calendar year
  • Tax-exempt bonds—arbitrage violations: Review potential arbitrage violations of section 148 by investment of bond proceeds in higher yielding investments beyond the allowable temporary period under Reg. section 1.148-2(e)
  • Employee plans—participant loans: Determine whether participant loans comply with the section 72(p) rules on maximum loan balances and section 72(t) re-payment rules for early distributions before age 59½ years


For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 | ruthmadrigal@kpmg.com

Preston Quesenberry | +1 202 533 3985 | pquesenberry@kpmg.com

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