By Thomas J . Weber , Esq ., Arnold B . Kogan , Esq ., Lisa A . Ritter , CPA , CFE , Camille Kostelac-Cherry , Esq ., Pennsylvania Dental Association CEO
As a result of concern for abuse of tax-exempt status , the Internal Revenue Service has again become active in auditing trade associations , which include professional societies such as the Pennsylvania Dental Association and its district and local societies . To assist the tax-exempt organizations with meeting its financial responsibilities , the IRS has also issued standards of good governance for nonprofit corporations ( the actual guidance can be found by searching “ IRS good governance practices ”). In addition , the checklist utilized by IRS Revenue Agents ( IRS Form 14114 ) can be found at www . irs . gov , titled Governance Check Sheet . Examination of the checklist will provide you with insight as to what the IRS is looking for and into when completing an audit . Following these standards and other housekeeping measures suggested in this article will not only prepare a district or local society for a potential audit , but also improve the operation of the organization and make it easier for officers and directors to assume and carry out their duties .
Addressing any IRS audit is going to require reliance on the accuracy and completeness of the district ’ s or local ’ s records and documentation . Following is a checklist of items that should be maintained in the permanent file of the district or local and made available to the officers and directors as needed .
November / December 2010 • Pennsylvania Dental Journal
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