Rhetoric Aside, Audits of Tax-Exempt Organizations Skyrocketed in FY25

The IRS FY25 Databook shows an extraordinary surge in tax-exempt organization audits, with examinations of Forms 990, 990-EZ, and 990-N jumping 33.48% from FY24 to FY25, the largest such increase in the past decade (the only other year-over-year increase was 6.14%). The article advises tax-exempt entities to prepare proactively by reviewing prior expenses, identifying donors, implementing financial controls, and monitoring current finances to mitigate audit risks and potential loss of exempt status.