By Thomas F. Blaney, CPA, CFE
Recently, the Internal Revenue Service (IRS) announced the areas within an exempt organization that they will be “deploying resources” (auditing) for 2012. The IRS is focusing their efforts on any international transactions. They will continue to examine exempt organizations that have offices or activities overseas.
Private foundations that perform international grantmaking, invest “off shore,” or maintain ownership of a foreign bank account may be subject to these examinations.
The IRS will review a private foundation’s operations to ascertain:
- Whether the foundation maintains adequate books and records to ensure assets are used for charitable purposes,
- Whether the foundation has maintained proper discretion and control over funds that have left the United States,
- Whether the foundation has met all filing requirements, and
- How foreign operations or grantmaking furthers the foundation’s exempt purpose.