The
IRS is Watching YOU – Part II: Exempt Organizations Executive
Compensation Compliance Project Report
Audio CD & MP3
Recorded March 22,
2007
Faculty: Dan
Mulholland, Henry Casale & Monica Hanslovan

It's
OK. You are not paranoid. The IRS IS watching you — and several
thousand other nonprofit, tax-exempt
hospitals and health systems. There have been two important developments
in the past few weeks that surely augur closer scrutiny of tax-exempt
health care organizations in the months and years
to come.
In
February 2007, the IRS issued what it called a "preliminary
draft" of proposed "guidelines" outlining
Good Governance Practices for 501(c)(3) organizations. Then,
on March 1, the Exempt Organizations Office of the IRS issued
a report on its "Exempt Organizations Executive Compensation
Compliance Project." Both of these documents signal that the
IRS will be much more vigilant in reviewing and, where necessary,
challenging governance and executive compensation practices in
the health care field.
To help make sense of
all this and to tell you what you should be doing now to get
ready for the brave new world of exempt organization compliance
and enforcement, HortySpringer presents two audio CDs.
- What was this project
and how was it conducted?
- Summary of findings
- The good news: most
organizations were found to have followed the "rebuttable presumption" test
in setting executive compensation
- The bad news: 30% of
the organizations reviewed were found to have errors and had
to amend their 990 returns
- The ugly news: 40 organization
managers and "disqualified persons" were found to have engaged
in excess benefit transactions and over $21,000,000 in excise
taxes were assessed
- Compensation practices
that were questioned:
- Excessive salary and incentive
compensation
- Payments for vacation homes,
personal legal fees, or personal automobiles
- Payments for personal meals
and gifts that were not reported as compensation
- Loans to directors and officers
- How should you restructure
your compensation policies?
Please be sure to
also order Part I of this series.

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