Following Treasury’s recent announcement that it plans to revise Form 990 — the information return required annually of tax-exempt organizations — a former congressional staffer described the move as part of a much broader trend of increased scrutiny of the tax-exempt sector.

Cozen O’Connor’s Sean Clerget, former chief tax counsel at the House Ways and Means Committee, explained the political and legislative pressures that led to the initiative and what organizations can expect next.

The plan to revise Form 990 did not arise in a vacuum, but rather amid increasing scrutiny from Congress and the executive branch, said Clerget during a June 9 webinar hosted by Cozen O’Connor. He pointed to several recent efforts that signal a more aggressive posture towards tax-exempt organizations.

He gave the example of the Ways and Means Committee’s recent investigation into “money in politics” with a focus on organizations described in IRC § 501(c)(3) and IRC § 501(c)(4). Clerget also noted ongoing concerns from lawmakers about foreign influence in the tax-exempt sector, unrest on college campuses, and the community benefit standard for nonprofit hospitals.

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