The Internal Revenue Service issued an updated version of Form 990, the return that charities and other tax-exempt organizations are required to file annually, and provided transition relief so that small exempt organizations will have time to adjust to the new form.

The Internal Revenue Service said on Thursday it will audit more tax-exempt organizations in 2008 as well as start a new compliance program to help groups maintain their tax-exempt status.

The IRS’s Exempt Organizations division said the tax agency wants to determine how many employers comply with employment tax laws and that the investigation will include tax-exempt groups and government agencies.

Tax-exempt groups owed nearly $1 billion in unpaid taxes as of last year, with some delinquent organizations channeling millions of dollars into executive compensation and benefits, according to a congressional study made public Tuesday.

The Government Accountability Office said charitable organizations made up more than 85 percent of the $1 billion in debt owed by some 55,000 tax-exempt groups as of Sept. 30, 2006.

Beginning in 2008, small tax-exempt organizations that were previously not required to file a return may be required to file an annual electronic notice. The notice is Form 990-N, Electronic Notice (e-Postcard) for Tax Exempt Organizations Not Required to File Form 990 or 990-EZ, and the new filing requirement applies to tax years beginning after December 31, 2006.

The electronic notice (or e-Postcard) is a provision of the Pension Protection Act of 2006 and applies to small tax-exempt organizations

Some of the new tax rules that were provisioned by the IRS put restrictions on income tax deductions on donations, while others were far more liberal and forthcoming. It is therefore important that taxpayers learn of the new rules and the different caveats that may apply. Taxpayers are advice to avoid waiting until April to learn of these new provisions.

The rules for charity donation of items such as clothes, shoes and everyday household items have change. For or an item to be qualified for tax deduction, it must be in