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The IRS Tax Exempt & Government Entities (TE/GE) division's Fiscal Year 2022 Program Letter lists current TE/GE priorities organized under the six IRS Strategic Goals.

In their introduction to the FY22 Program Letter, TE/GE Commissioner Sunita Lough and Deputy Commissioner Edward Killen note that, following approximately 10 years of decline in the size of their workforce, FY22 "will be a year of significant growth, with most new hires assigned to enforcement duties." The year ahead will also include TE/GE outreach to stakeholders and the launch of new electronic forms and services, the commissioners state. Enforcement will be used "to ensure that those who take advantage of the exempt sector to enrich themselves are held accountable."

TE/GE FY22 priorities

Within the framework of the IRS Strategic Goals, the Program Letter lists pertinent TE/GE priorities:

1. Strengthen compliance activities
2. Improve operational efficiencies
3. Maintain a taxpayer-focused organization
4. Ensure awareness and collective understanding
5. Leverage technology and data analytics
6. Develop the IRS workforce

The FY22 Program Letter sets out TE/GE's plans to satisfy these priorities as follows:

• Strengthen compliance activities
• Collaborate across the IRS on issues such as syndicated conservation easements, abusive charitable remainder trusts, employee stock ownership plans (ESOPs), COVID-19-related employer credits and potentially abusive promoter schemes with an impact to TE/GE
• Support examinations of high-income taxpayers with TE/GE issues, especially for private foundations and retirement plans, and create a joint audit process in cooperation with the IRS Large Business & International (LB&I) and Small Business/Self-Employed (SB/SE) divisions
• Partner with IRS Criminal Investigation and Research Applied Analytics & Statistics to identify cases with potentially significant noncompliance
• Improve operational efficiencies
• Review systems and processes to improve internal controls, performance measures and continue to streamline enforcement-related procedures in collaboration with the Lean Six Sigma Office
• Support Enterprise Case Management efforts by analyzing processes across TE/GE
• Maintain a taxpayer-focused organization
• Collaborate with the Taxpayer Experience Office to expand outreach to the TE/GE community and help taxpayers understand and meet their tax responsibilities
• Promote the e-filing of Forms 1024 and 8038-CP, as well as other exempt organization and employee plan returns
• Develop online resources and promote online access to publicly disclosable filings
• Ensure awareness and collective understanding
• Proactively communicate to encourage compliance with tax laws through expanded outreach, such as the TE/GE Small Entity Compliance Initiative
• Strengthen TE/GE's stakeholder partnerships to identify, develop and deliver effective messages
• Increase the use of cross-functional teams to address business change initiatives
• Leverage technology and data analytics
• Detect emerging issues using data analytics
• Launch taxpayer digital communications capabilities and use robotic process automation to make processes more efficient and effective
• Improve access to, and use of, digitalized data in identifying issues with a high risk for noncompliance
• Leverage publicly available data to streamline and automate TE/GE's process for identifying the universe of hospitals subject to Affordable Care Act review
• Develop the TE/GE workforce
• Assess TE/GE employees' training needs to expand their skills to create a more flexible and well-trained workforce
• Enhance employee and manager development through training, developmental assignments, coaching and mentoring

According to the FY22 Program Letter, TE/GE officials plan to release a summary of the division's FY21 accomplishments during the first quarter of FY22 (October 1 — December 31, 2021).

Implications

The TE/GE FY22 Program Letter provides tax-exempt organizations with insight into TE/GE's priority compliance issues for the coming year and how TE/GE intends to approach these issues, such as TE/GE's renewed focus on expanded outreach to stakeholders and taxpayers in the exempt organizations space. Of particular interest are TE/GE's simultaneous efforts to expand TE/GE's workforce, particularly examinations and enforcement personnel, and to develop its digital data collections and analytics capabilities. Taken together, these priorities reaffirm TE/GE's intent to expand the scope and impact of its compliance activities, allowing TE/GE to identify potential noncompliance sooner and investigate a greater volume of cases.

Consistent with TE/GE's continuous goal to leverage technology and data analytics, the Compliance Programs and Priorities webpage has been updated to reflect the Program Letter and contains further explanation of TE/GE's compliance strategies for the year.

Tax-exempt organizations' management should evaluate the potential implications that each identified area in TE/GE's FY22 Program Letter and Compliance Programs and Priorities webpage may have on their organizations. Management should also keep a look out for this year's TE/GE Accomplishments Letter, which is expected to provide additional information on TE/GE's specific activities.

Please contact your EY professional for further information.

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