Land Trust Audits

Over the past few years, the Internal Revenue Service has greatly increased its audits of nonprofit organizations. Some of these audits have been of land trusts. If your organization is audited, we’d like to hear about it so we can highlight resources available to you.  Please email policy@lta.org.

Responding to an Audit of your Land Trust

• An Unwanted Visitor: What to Do if the IRS Comes Calling – An article from the summer 2009 edition of Saving Land by Sheila McGory-Klyza.
• IRS Audit Closing Letters to Land Trusts – These letters sent to land trusts at the successful completion of their audits offer helpful insights into how the IRS views the details of running a land trust and may include the kinds of changes IRS is requiring to maintain tax exempt status.

What Kinds of Questions will the IRS Ask?

• Governance Check Sheet Used by IRS Agents Auditing Nonprofits – The IRS will likely ask these questions on matters of nonprofit governance. For more background please see our page on IRS Governance Guidelines and our curriculum series on Nonprofit Law and Recordkeeping for Land Trusts.
• Form 990 Schedule D Conservation Easement Questions – Even if you aren’t required to file a full Form 990, we suggest you look at it. The IRS is asking many of the same questions in audits – and you should be prepared to answer them.
• I Survived an IRS Audit -- Advice from a recently audited conservation organization.