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§ 23.1 IRS AUDIT GUIDELINESsweepstakes, book sales, sports tournaments, dinner and theater events, duespayments, and the like. Most of the abuses of this nature, however, were inadvertent,based on ignorance or misunderstanding of the legal requirements.Matters changed somewhat when charitable organizations began explicitlyor implicitly telling donors and patrons that their payments to the organizationswere deductible as gifts, when in fact those payments were only partiallydeductible or not deductible at all. This practice became so overt and pervasivethat the IRS decided that the time had come to enhance government review ofthese areas of fundraising and giving. 6 The extent of regulation in this area wasbroadened by reason of the increase in the extent of donor recognition efforts,particularly in the setting of corporate sponsorships. 7(b) Special Emphasis ProgramThe IRS launched its contemporary attack on these forms of fundraising misperformanceby inaugurating a Special Emphasis Program. This program evolvedin two parts: an educational phase and an audit phase.Phase I of this Special Emphasis Program took place throughout 1989. Duringthis period, the IRS engaged in educational efforts to explain the rules tocharitable organizations, which were expected to apply them when solicitingcontributions and other payments. This aspect of the Program consisted ofspeeches by representatives of the IRS, workshops with charitable organizations,and the encouragement of educational efforts by national “umbrella” charitableorganizations.At this time, the IRS began reviewing annual information returns (Form 990)filed by charitable organizations. Special emphasis was placed on the returns oforganizations that were engaged in gift solicitation. Charitable organizationsthat were not in compliance with the disclosure requirements received lettersfrom the IRS requesting immediate compliance with these rules. Some organizations(such as the Public Broadcasting Service 8 ), working with the IRS, developedformal guidelines for their members. There was also talk of more audits ofcharitable organizations and donors by the IRS, review of lists of contributors bythe IRS, and the imposition of various tax penalties.The IRS’s regulation of charitable giving and other fundraising programsbecame much more serious when the second phase of the Special Emphasis Programwas inaugurated in early 1990. This aspect of the IRS’s involvement andscrutiny was evidenced by the rather extraordinary checksheet sent by theNational Office of the IRS to its agents in the field, to enable them to review thefundraising practices of charitable organizations.(c) ChecksheetThe checksheet, bearing the title “Exempt Organizations Charitable SolicitationsCompliance Improvement Program Study Checksheet” (Form 9215), reflected6 Id., text accompanied by note 5.7 See § 23.3.8 See ch. 23, note 35, of the first edition of this book. 619