EO - Scope of EO Enforcement

Policy Statement 4-119 states that the primary objective of the EO examination program is regulatory, with emphasis on the continued qualification of exempt organizations. For purposes of applying limited resources, income tax enforcement of revoked or disqualified organizations is incidental to that primary objective. The referral option on Form 5666 is available.

Policy Statement 4-63 provides that deficiencies should be based on meritorious adjustments. No adjustments should be included for punitive, bargaining, or similar purposes. Estimated amounts to protect the Government's interest may be used only when it is impossible to establish exact amounts.

In recognition of existing EO work plans and implementing guidelines, EO examiners will generally enforce income taxes by rolling over amounts known to be correct on the primary return, to the RAR of the tax return. See the Conversion Table at IRM 4.70.14.2.1.3.3.15(2).

Converted return taxes are generally enforced for a maximum of 6 years. See P-5-133 at IRM 1.2.14.1.18 (8/2006).

In appropriate cases, consult with TEGEDC to determine whether special statute conditions exist for any return or tax year, e.g., 6-year statute. TEGEDC requires 45 days to provide a written opinion. See IRM 4.70.12.3.7, Statute of Limitations and Statute Control Procedures, for statute considerations.