07/16/2024

Avoid an Audit

Here are seven red flags on a Form 990

The Internal Revenue Service (IRS) may decide to audit your nonprofit organization for various reasons, with one of the most frequent triggers being a red flag raised by your annual Form 990 filing, “Return of Organization Exempt From Income Tax.” 

Continue reading to discover seven common areas of IRS scrutiny and discover strategies to minimize your audit risk.

Incomplete or inconsistent information

Missing schedules, blank boxes or unsigned forms aren’t just risky because they draw IRS attention. The agency considers incomplete returns to be unfiled returns, which could result in costly penalties. You also need to watch for inconsistent reporting of revenues or expenses between different sections of your form, or between your form and other publicly available information. 

Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett.