Statistical Trends of the Tax Exempt and Government Entities Division Through Fiscal Year 2025
Why did we do this audit?This review compiles nationwide statistical information and complete trend analyses of activities for the major functions of the IRS’s Tax Exempt and
Government Entities (TE/GE) Division from Fiscal Years (FY) 2021 through 2025. Tax-exempt organizations and government entities support societal goals, foster economic security/development, and enrich American lives. These distinct organizations and entities include retirement plans, charities and other exempt organizations, Indian tribes, federal, state and local governments, and entities that issue tax advantaged bonds. The TE/GE Division serves taxpayers by helping these distinct organizations and entities understand and comply with applicable tax laws and reporting obligations. What did we find?New legislation and executive orders impacted the TE/GE Division’s operations from FYs 2021 through 2025. The division received additional funding from the Inflation Reduction Act, resulting in a budget that increased by nearly $114 million (50 percent) from FYs 2021 through 2025. Staffing levels also increased by 39 percent, with most of the staffing increases occurring in FYs 2024 and 2025. However, this does not reflect the reduction of employees who participated in separation programs offered beginning in FY 2025. These employees remained in the system during FY 2025, and the
impact of their loss will likely affect future goals. The TE/GE Division’s compliance activities declined in several areas. For example, the Exempt Organizations and Employee Plans functions completed fewer examinations in FY 2025 compared to FY 2021, by 15 and 16 percent, respectively. The number of compliance checks (i.e., non-examination reviews) and compliance related revocations of exempt status also decreased. Most of the decreases in these compliance activities were the result of workforce
changes and resource allocation.
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