Document review procedures for TE/GE examinations | KPMG | GLOBAL
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New organizing document review procedures for TE/GE examinations

Document review procedures for TE/GE examinations

The IRS Tax Exempt and Government Entities (TE/GE) division in late January 2017 released new guidance for use by TE/GE agents in examining organizations that received tax-exempt status after October 2013.


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Memorandum TEGE-04-0117-0007 [PDF 92 KB] recognizes that the IRS may have granted tax-exempt status to these organizations through a streamlined application process that did not evaluate whether organizing documents complied with organizational requirements. The memorandum directs examination agents to request and review organizing documents during all audits of section 501(c) organizations that received recognition of exempt status after October 2013.


Historically, in reviewing an application for recognition of exemption, the IRS would determine whether the organizing document submitted with the application satisfied the requisite organizational requirements; would require the organization to make any necessary conforming changes; and would require the organization to send a copy of the amended documents to the IRS prior to the issuance of a determination letter recognizing the organization (as described in a particular subsection of section 501). 

Beginning in October 2013, the IRS began a pilot program for streamlined processing of exemption applications and accepted attestations, signed under penalties of perjury, that the organizations made the required conforming changes. The IRS later extended this process to all applicants and introduced a similar process for small organizations using Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.

New review procedures

TE/GE’s new guidance requires agents:

  • During every audit of an organization that received tax-exempt status after October 2013, to obtain a copy of the organization’s current organizing documents, including any amendments
  • To review the organizing document to determine whether it contains the required language for the type of exemption granted
  • If the organizing documents are defective, to review the organization’s application for tax-exempt status to determine whether the organization used a streamlined process or Form 1023-EZ

Defective organizing documents may result in proposed revocation of exempt status.


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

Greg Goller | +1 (703) 286-8391 |

Alexandra Mitchell | +1 (202) 533-6078 |

Randall Thomas | +1 (202) 533-3786 |

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