IRS Form 15723 Guide: Grant Review Preparation Checklist

Introduction: What Is IRS Form 15723?

IRS Form 15723, officially titled Administrative Review Preparation Checklist, is an administrative compliance and organizational tool issued by the Internal Revenue Service (IRS). Governed by the Department of the Treasury, this document is administered through the Grant Program Office (GPO) within the Stakeholder Partnerships, Education, and Communication (SPEC) organization of the Taxpayer Services Division.

Nonprofit organizations, municipal agencies, and educational institutions that receive federal funding through the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) grant programs are subject to periodic federal monitoring. To help recipient organizations prepare for these comprehensive evaluations, the IRS provides Form 15723.

Form 15723 acts as the official preparation companion to Form 15722 (Grant Program Office – Administrative Review). While IRS grant specialists use Form 15722 to record their formal findings during a review, grantees use Form 15723 as a self-assessment roadmap to compile, verify, and organize every policy, financial ledger, and inventory record required by federal grant regulations.

Purpose of the Form: Why Does Form 15723 Exist?

Managing federal grant funds requires strict compliance with federal laws, including the Office of Management and Budget (OMB) Uniform Guidance outlined in Title 2 of the Code of Federal Regulations (2 CFR 200). When the IRS announces an administrative review, gathering records across multiple departments—such as human resources, accounting, and volunteer operations—can be overwhelming.

Without a clear preparation plan, organizations risk misplacing critical records, failing to document required non-federal matching contributions, or presenting incomplete payroll records. These administrative mistakes can stall review meetings and trigger formal corrective action mandates.

Form 15723 solves this challenge by serving as an advance organizational checklist. It outlines every document an IRS analyst will inspect during the administrative review. By completing this checklist in advance, grant recipients can identify and correct recordkeeping gaps early, ensuring a smooth, successful evaluation that keeps their federal funding secure.

Who Needs to Use Form 15723?

Form 15723 is designed for organizations that receive federal grant funding from the IRS to run volunteer tax clinics:

• VITA and TCE Grant Recipients: Non-profit agencies, community action networks, and universities that have received official notification of an upcoming administrative review from the IRS Grant Program Office.
• Grant Project Directors and Coordinators: Operational leaders responsible for organizing volunteer tax preparation sites, tracking return filings, and overseeing daily grant workflows.
• Chief Financial Officers and Fiscal Staff: Accounting personnel tasked with assembling general ledgers, time-and-effort payroll reports, invoices, and matching fund documentation.
• Coalition Lead Agencies: Umbrella organizations that distribute federal grant dollars to sub-recipient community partners and must verify coalition compliance.

Who Is Exempt or Not Required to Use This Form?

Because Form 15723 is an internal preparation checklist for active federal grant recipients, several groups have no reason to use it:

• Non-Grantee Volunteer Tax Clinics: Community organizations that operate VITA or TCE sites using purely local volunteer resources without receiving federal grant funds from the IRS GPO.
• Low Income Taxpayer Clinic (LITC) Grantees: Academic and legal clinics funded under the LITC program operate under the National Taxpayer Advocate and follow separate review guidelines.
• Individual Taxpayers: Everyday citizens who receive free tax filing help at volunteer clinics never complete or interact with Form 15723.
• Commercial Businesses and Paid Preparers: For-profit accounting businesses and retail tax franchises are not eligible for IRS volunteer grants and are exempt from GPO monitoring.

When to Use: Deadlines and Preparation Timelines

Form 15723 operates on an event-driven administrative schedule tied to formal review notices:

• Upon Receiving Review Notice: Grantees should begin working through Form 15723 immediately after receiving written notice and an appointment confirmation from their assigned GPO grant analyst.
• Pre-Review Submission Window: Most grant analysts require specific policies, ledgers, and sample documents to be transmitted digitally one to two weeks before the formal interview date.
• Annual Self-Auditing Tool: Proactive organizations also use Form 15723 throughout the year as an internal audit tool to ensure their grant files remain audit-ready at all times.

Where and How to Transmit Preparation Records

Form 15723 organizes the records that must be delivered to the IRS review team:

Digital Submission: Grantees compile the items checked off on Form 15723 into organized digital folders (often grouped by financial, personnel, and inventory categories). These records are transmitted to the IRS GPO analyst via secure encrypted email or through an authorized federal grant portal.

Review Conferences: During the scheduled virtual conference or on-site visit, grantee leadership references Form 15723 to present documentation and answer specific operational questions raised by the reviewer.

Physical Mail Exceptions: If an organization must mail physical audit reports, bank confirmation letters, or bound ledgers, packets must be sent directly to the official IRS address as per instructions provided by the assigned GPO specialist.

Step-by-Step Instructions to Work Through Form 15723

Form 15723 is arranged as a comprehensive checklist covering eight core areas of federal grant management. Grant teams should assign specific sections to the appropriate operational and accounting leads.

Checklist Category	Responsible Lead	Required Verification & Documentation Action
Section 1: Grant & Entity Information	Project Director	Confirm legal organization name, federal EIN, Unique Entity Identifier (UEI), grant award number, and current Notice of Award (NOA).
Section 2: Written Policies & Governance	Executive Leadership	Assemble written bylaws, conflict-of-interest policies, whistleblower policies, and formal board meeting minutes.
Section 3: Financial Management Systems	Finance / Accounting	Gather chart of accounts, general ledger printouts, bank reconciliations, and written accounting procedures showing fund separation.
Section 4: Personnel & Timekeeping	Human Resources / Payroll	Compile signed timesheets, time-and-effort tracking logs, payroll registers, and approved job descriptions for grant-funded staff.
Section 5: Invoices & Procurement	Procurement / Finance	Pull sample vendor invoices, purchase orders, canceled checks, and written procurement policies reflecting federal micro-purchase thresholds.
Section 6: Matching Contributions	Finance / Development	Assemble award letters for non-federal cash matches, signed donor letters for in-kind space, and fair-market valuation methodologies.
Section 7: Equipment & Inventory Logs	IT / Site Coordinator	Verify the hardware register listing serial numbers, purchase dates, funding sources, and physical locations of laptops and printers.
Section 8: Sub-Recipient Monitoring	Project Director	Collect signed sub-award agreements, Memorandums of Understanding (MOUs), and past monitoring reports for partner clinics.

Detailed Walkthrough of Checklist Requirements

1. Internal Financial Controls. The checklist requires proof that your organization maintains strong internal controls. You must provide written accounting manuals proving that no single employee controls an entire financial transaction from approval to disbursement, safeguarding federal funds from fraud or error.

2. Personnel and Time-and-Effort Tracking. If staff salaries are paid with grant funds or counted toward matching requirements, budget estimates are not enough. You must provide contemporaneous, signed timesheets reflecting the actual hours employees spent on grant activities versus general non-grant operations.

3. Non-Federal Matching Support. For VITA grants, federal law generally mandates a dollar-for-dollar (1:1) non-federal match. Use Form 15723 to ensure you have verified bank deposits for cash matches and documented appraisals or rate sheets for in-kind contributions (such as donated classroom or clinic space).

4. Equipment Tracking and Physical Security. Check that every computer, scanner, and printer purchased with grant funds appears on an official equipment register. The list must show serial numbers, physical site assignments, and security measures in place to protect taxpayer data stored on those devices.

5. Performance Target Records. Collect end-of-season tax preparation logs. You must be prepared to compare actual tax returns filed and electronic filing acceptance rates against the initial projections submitted in your grant application.

Required Documents to Assemble Before Completing the Form

Before checking off items on Form 15723, ensure you have gathered the following core records:

• Notice of Award (NOA): The official agreement and approved budget narrative governing the performance period under review.
• Detailed General Ledger: Transaction detail reports showing all debits and credits charged to the specific federal grant account.
• Payroll Registers and Timesheets: Timecard summaries and signed time-and-effort distribution logs for all grant personnel.
• Procurement and Purchase Records: Contracts, itemized vendor receipts, and competitive bidding memos for equipment and supplies.
• Matching Fund Proof: Bank statements for cash gifts, grant agreements from private foundations, and signed facility-use agreements for donated clinic space.
• Hardware Inventory Register: An up-to-date equipment tracking spreadsheet detailing all grant-purchased technology assets.
• Recent Single Audit or Financial Statements: Independent audit reports prepared under 2 CFR 200 Subpart F (if your organization expends $750,000 or more in federal awards).

Common Mistakes to Avoid

Organizations often encounter compliance setbacks during administrative reviews due to avoidable preparation mistakes. Watch out for these frequent errors:

• Waiting Until the Last Minute: Attempting to gather ledgers, leases, and timesheets a few days before the review creates panic and leads to missing records. Begin assembling files as soon as the review date is set.
• Relying on Budget Estimates for Payroll: Charging payroll based on budgeted percentages rather than actual, contemporaneous timesheets violates federal grant cost principles.
• Incomplete Equipment Registers: Failing to record serial numbers, purchase dates, or the current physical location of laptops loaned out to volunteer clinics.
• Unsubstantiated In-Kind Valuations: Claiming thousands of dollars in donated office rent or professional services without a written lease, rental rate survey, or signed donor letter.
• Commingling Grant Accounting: Tracking grant expenses within general operational accounts rather than using dedicated fund codes or separate ledger accounts.
• Overlooking Sub-Recipient Oversight: Providing grant dollars to partner organizations without executing signed sub-award agreements or monitoring their expenditure reports.

Consequences and Penalties for Administrative Non-Compliance

While Form 15723 is a preparatory checklist and does not trigger tax penalties directly, failing to prepare properly can lead to serious administrative sanctions on companion Form 15722:

• Mandatory Corrective Action Plans (CAP): Identified recordkeeping deficiencies will result in formal corrective requirements that must be completed within 30 to 60 days.
• Drawdown Freezes: The IRS Grant Program Office can place an administrative hold on your organization’s Payment Management System (PMS) account, blocking future fund drawdowns until issues are resolved.
• Cost Disallowances and Repayment: If an organization cannot substantiate expenses with receipts or timesheets, the IRS will disallow those costs, requiring the grantee to repay the funds to the federal government.
• Grant Award Reductions: Severe recordkeeping failures can cause the IRS to reduce current funding or terminate the grant contract early.
• Loss of Future Federal Grant Eligibility: Systemic mismanagement or unresolved findings can lead to federal debarment, disqualifying your organization from receiving future VITA, TCE, or other federal grant awards.

Related Forms and Publications

Form 15723 operates within a broader system of IRS grant guidelines and volunteer tax program resources:

• Form 15722: Grant Program Office – Administrative Review (the official evaluation document used by IRS analysts).
• Publication 1101: Application Package and Guidelines for Managing a TCE Program.
• Publication 4671: VITA Grant Program Overview and Application Instructions.
• Publication 5683: VITA/TCE Handbook for Partners and Site Coordinators.
• Publication 5166: VITA/TCE Volunteer Quality Site Requirements.
• Publication 4299: Privacy, Confidentiality, and Civil Rights – A Public Trust.
• Form 13614-C: Intake/Interview & Quality Review Sheet.
• Form 13715: Volunteer Site Information Sheet.

Frequently Asked Questions (FAQs)

What is the difference between Form 15723 and Form 15722?

Form 15723 is the advance preparation checklist that the grantee fills out and uses to gather required documents before the review. Form 15722 is the official evaluation form used by the IRS Grant Program Office analyst during the review to record formal findings.

Do we submit Form 15723 to the IRS or keep it for our records?

Grantees typically complete Form 15723 and transmit it along with their compiled financial documents to the IRS grant analyst prior to the review meeting. It demonstrates that your team has organized every required file.

What happens if our organization cannot find a requested document on the checklist?

Be transparent with your assigned GPO analyst ahead of the review. Explain the missing record, provide alternative secondary documentation (such as bank records or board minutes), and prepare an internal process improvement plan to prevent future gaps.

Does Form 15723 evaluate the tax returns prepared by our volunteers?

No. Form 15723 focuses strictly on administrative, financial, operational, and inventory compliance. Volunteer tax return accuracy is evaluated separately during IRS Quality Site Reviews conducted under Publication 5166.

How far back should our records go for the administrative review?

You should gather records covering the active performance period specified in your Notice of Award, typically the preceding one to two grant years, along with your organization’s most recent independent financial audit.

Can an organization use Form 15723 even if not selected for an IRS review?

Yes. Many experienced VITA and TCE program managers use Form 15723 at the close of every tax season as an annual self-assessment tool to guarantee ongoing compliance with federal grant rules.

Conclusion: Key Takeaways

IRS Form 15723, Administrative Review Preparation Checklist, is an indispensable organizational roadmap for organizations managing VITA and TCE grants. By breaking down complex federal grant standards into manageable checklist categories, it helps leadership teams assemble financial ledgers, payroll records, and equipment registers with confidence.

Preparing early using Form 15723 eliminates last-minute stress, ensures transparent accounting of federal and matching funds, and demonstrates strong fiduciary responsibility. By thoroughly working through this checklist, your organization can complete its IRS administrative review successfully and protect vital free tax assistance funding for your community.