Charity and Nonprofit Audits: Closing Agreements
An exempt organization may request a closing agreement when a satisfactory resolution to tax issues can't be achieved via normal procedures. For closing agreements involving an audit, an organization should work with the revenue agent conducting the audit.
To initiate a closing agreement unrelated to an examination, an exempt organization sends a letter to the EO closing agreement coordinator for Examination closing agreements:
IRS
1100 Commerce Street
MC 4920 DAL, Attn: EOCAC
Dallas, TX 75242
The letter must contain the following information:
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Why a closing agreement is appropriate
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The advantages to the organization and how the government will sustain no disadvantages
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A detailed description of the method proposed for correcting non-compliant activities
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A narrative description of each step of the correction method, providing specific information to support the suggested method
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How the taxpayer will achieve future compliance
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Proposed methodology to calculate any tax, interest, and penalty, for the tax period(s)
Additional information
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Internal Revenue Manual 4.75.25, Exempt Organizations Examination Procedures, Exempt Organizations Closing Agreements
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Page Last Reviewed or Updated: 2012-11-02
