Processing a IRC Section 501(p) Organization Identified During Audit

When a case is assigned to an examiner involving an organization whose tax-exempt status has been suspended under IRC Section 501(p) (Status Code 98 in the EO Business Master File (BMF)), or is suspended under IRC Section 501(p) during the audit, the examiner will cease all exam actions and notify his/her manager. After consulting with the manager, the examiner will:

Close the case from the group using either Disposal Code (DC) 36, Surveyed After Initial Contact; DC 31, Survey Before Assignment, or DC 32, Survey After Assignment, depending on the status of the case within the group, and

Identify the case as an IRC Section 501(p) closure and check the Mandatory Review section in the 3198-SH checksheet in RCCMS.

Mandatory Review staff will mail Letter 5324, IRC Section 501(p) Closing Letter, to the taxpayer.