Electronic Filing of Form 990

All 501(c)(3) charitable organizations are required to file the Internal Revenue Service (IRS) Form 990 in accordance with the annual reporting requirements under Sec. 6033 of the Internal Revenue Code. This form asks for detailed information about the activities of the charity for the reporting year and serves to confirm that the filing charity is fulfilling its charitable purpose as stated in its determination letter granting tax-exempt status. There are not currently any technological requirements for the mode by which a charity must file this form (i.e. filled out by hand and mailed or completed in a fillable-PDF which is sent electronically to the IRS). The IRS makes Form 990 data publicly available, but due to the varied methods of receipt from charities, the data is not always easy to provide in a machine-readable format that would allow a user to search or aggregate information related to reported charitable activities.

The Council on Foundations supports mandatory electronic filing of Form 990s and publicly-available data about the nonprofit sector, while cautioning policymakers to prioritize involvement of nonprofits in implementation and ensure adequate data protection.

The Council raises the following as specific considerations for this issue:

• A task force from within the sector should determine which parts and schedules of the current Form and related instructions should be updated, enhanced, or eliminated, as recommended by the IRS Advisory Committee on Tax Exempt and Government Entities.
• Representatives from various types of nonprofits, including all types of foundations required to file, should have an opportunity to help shape how this policy is implemented.
• The security of personal information needs to be considered before making Form 990s machine readable.
• Mandatory e-filing may be a disproportionate burden for medium and smaller-sized organizations with few, if any, full time staff, and these organizations will need assistance in making the transition along with adequate time to prepare and allocate resources.

Bills:

• Protecting Taxpayers Act of 2018 (S. 3278)
• Taxpayer First Act of 2018 (S. 3246)
• H.R 5443 (115th Congress)
• S. 1578, The Taxpayer Bill of Rights Enhancement Act of 2015 (114th Congress)
• House Bill H.R. 1 – Tax Reform Act of 2014
• Council Summary of Tax Reform Act of 2014

Council Issue Paper: 

• Electronic Filing of Form 990 Issue Paper

Resources on this:

• Washington Snapshot – April 19, 2018
• Council's Comments to IRS, September 11, 2015
• Washington Snapshot – June 19, 2015
• Council’s Comments to Senate Committee on Finance Chairman Baucus, January 17, 2014
• Council’s Summary of SFC Working Groups Report