What is NOT a true statement regarding the IRS?

The statement that the IRS ensures practices uphold non-profit status is not entirely accurate. While the IRS does provide guidelines and regulations regarding the maintainance of tax-exempt status for organizations, it does not actively monitor nonprofits to ensure compliance on an ongoing basis. Instead, the responsibility falls to the organizations themselves to adhere to the laws and regulations governing their tax-exempt status, including adherence to rules regarding activities and finances.

The IRS will intervene if issues arise, such as when an organization fails to file required documents or if it is suspected of engaging in activities that jeopardize its non-profit status. However, this does not equate to the IRS actively ensuring that all non-profits are operating within the bounds of their tax-exempt status. Instead, it serves as a regulatory body that steps in when there are discrepancies or violations reported.

In contrast, the other options reflect true responsibilities and functions of the IRS. The agency does regulate tax-exempt organizations and oversees various aspects of their compliance. It also investigates suspected fraud, which can involve various practices, including those in the medical field. Additionally, the IRS requires that many entities, including medical practices, file tax returns, particularly depending on their structure, income, and compliance status.