26 U.S.C. § 6104(d)
26 CFR § 301.6104(a)-1 et seq.; 64 Fed. Reg. 17,279 (Apr. 9, 1999)
Form 990 is an annual information return required to be filed with the IRS by most organizations exempt from income tax under IRC section 501(a). The Taxpayer Bill of Rights requires public disclosure of certain tax documents filed by tax-exempt organizations. See section 6104(e) of the Code. What follows is a summary of the highlights of the regulations. In addition, the Pension Protection Act of 2006 requires the public disclosure of Form 990-T by 501(c)(3) organizations. This requirement, for the 990-T, applies to those tax returns filed after the date of the enactment of the law. (August 17, 2006) Form 990-T is used to report unrelated business income tax.
The documents that must be made available to the public are:
- copies of the application for tax exemption (for those organizations which filed before July 15, 1987, this requirement only applies if the organization has a copy of the application on July 15, 1987)
- copies of the organization’s three most recent annual information returns
Each annual information return must be made available for a period of three years beginning on the date the return is required to be filed, or on the date it is actually filed, whichever is later. Generally, the annual return information includes Forms 990, 990-EZ, 990-BL, and Form 1065, as well as all schedules and attachments filed with the IRS. The tax-exempt organization does not have to identify the names and addresses of the contributors to the organization. For those tax returns filed after August 17, 2006, Form 990-T must also be made available.
Where To Make Available?
This obligation may be fulfilled by making these documents available for public inspection without charge (except for cost of copying) at its principal, regional, and district offices during regular business hours. Posting the documents on the Web (in accord with 26 CFR 301.6104(d)-2) relieves the organization of the obligation to comply with requests for copies of the documents, but does not relieve the organization of the obligation to make the documents available for public inspection at its business office. If the information is posted, the entity should respond to requests for information by giving the requester the address of the Internet page where the information is posted, immediately if the request is in person, or within seven days if the request is written.
Charge for Copies and Time for Compliance
If the organization has not posted the material on its Web page in accord with the specifications, then it must promptly reply to requests for copies of the material. If the request is made in person, the organization must generally provide the copies immediately, that is, on the day a request is made, unless exigent circumstances exist (such as the day of the request is the day of student registration, or the amount of copying cannot be done in one day). Written requests must be responded to within 30 days from the date it receives the request, or if the organization requests payment in advance for the copies, then within 30 days from the date it receives payment.
The only charge that may be made is a reasonable charge for copying. The fee is tied to the IRS charge for copies of tax-exempt organization documents, which is currently $1.00 for the first page, and $.15 per page thereafter. If prepayment is not required, then consent should be obtained before filling a request that will exceed $20.00.
Format for Posting on the Internet
The following applies to the format that must be utilized when posting tax documents to the organization's Internet page. First, any individual with access to the Internet must be able to access, download, view, and print the posted document in a format which exactly reproduces the image of the original document filed with the IRS, except for information permitted to be withheld from public disclosure. Second, there must be no fee charged in connection with the above, and special software must not be needed for same, other than software freely available to the public.
IRS Notice 2008-49 (May 19, 2008)
Public Inspection of Form 990-T
This notice modifies Notice 2007-45 and provides additional interim guidance on making Form 990-T available for public inspection. The disclosure requirement, which requires the Form 990-T filed by the institution to be open to public inspection and copying for the three year period beginning on the last day prescribed for filing the 990-T only applies to those schedules, attachments and supporting documents that specifically relate to the imposition of tax via IRC 511 (UBIT).
New Electronic and Magnetic Media Filing Requirements
The IRS has issued Rev. Proc 2008-30, which sets revised requirements for filing Forms 1098, 10999, 5498, and W-2G electronically, or on magnetic media for preparing 2008 and prior years' returns.
Notice 2007-45 Interim Guidance on the new requirement (from the Pension Protection Act) for 501(c)(3) organizations to disclose to the public Form 990-T, Exempt Organization Business Income Return (for UBIT)
The public disclosure requirements apply to all 501(c) (3) organizations, and also apply to those state colleges and universities that have dual status as a 501(c) (3) and 115 organization. (For the time being, Form 990-T Public disclosure requirements apply to state colleges and universities that have received determination letters from the IRS granting them 501(c) (3) status, but do not apply to those state colleges than have not received a formal determination letter.) Under 26 CFR §301.6104 (d)-1 an organization that makes the Form 990-T widely available, such as posting it on the internet, does not need to fill individual requests for the return. The exact image of the return must be posted on the internet to meet this exception. Penalties apply to organizations and officers that do not make the return available.
Notification Requirements for Tax Exempt Entities Not Currently Required to File, 72 Fed. Reg. 64147 (Nov. 15, 2007) Temporary Regulations, Effective Date Nov. 15, 2007, applicable to tax years beginning after Dec. 31, 2006
Beginning in 2008, small tax exempt organizations with gross receipts of $25,000 or less must "submit" an annual notice, Form 990-N. This change comes from the Pension Protection Act of 2006. See 26 USC 6033(i)(1) and will be codified at 26 CFR 1.6033-6T.
Tax exempt organizations whose gross receipts are normally $25,000 or less are not required to file Form 990 or Form 990-EZ. Failure to submit the notice will result in loss of the organization's exempt status. Exceptions include organizations that are included in a group return, private foundations that file Form 990-PF, and section 509(a)(3) supporting organizations required to file Form 990 or 990-EZ. This new notice requirement also does not apply to churches.
Student organizations that have their own EIN will be affected by this new rule. If a student group that is separate from the University is claiming tax exempt status, then it will have to submit this notice. The electronic notification to be submitted identifies the organization, and indicates the basis for not having to file a full information return. It is important to note, however, that merely being exempt as part of a Group Ruling (for example a local chapter of Phi Beta Kappa potentially would be) does not exempt the organization from the new submission requirement. Only where the local organization is exempt as part of a Group Ruling, and the Group Ruling parent organization files financial information for the organization on a Group Ruling return, (generally a Form 990 for all members of the group), will the local organization be exempt from the new submission requirement. A local organization that is exempt under a Group Ruling, but whose “parent” organization does not file a group return (i.e., a Form 990 for the members of the Group), will be required to comply with the new submission requirement. The submission requirement will be fulfilled only thorough an electronic submission of a Form 990-N, frequently called an e-postcard. No paper filing will be permitted. The IRS is still working on procedures for the electronic submission.
- IRS Q and A on E-postcards
- IRS Write up on New Annual Electronic Filing Requirements
- Sample Letter on 2008 Annual Electronic Notice Filing Requirement
- IRS Press Release
- Educational Tools
See IRS Good Governance for 501 (c)(3) organizations and Info Required on New Form 990
Updated Form 990 issued by IRS Feb. 12, 2010 for Tax Year 2010-2011. See also the Summary of Significant Changes.
Redesigned 990-Forms and Instructions (August 2008)
Link to Internal Revenue Service (IRS) website with final forms and instructions for completion of the new form 990 which must be filed starting with tax year 2008 (filed in 2009) by most organizations exempt from taxation under Internal Revenue Code 501(a), including Sec. 501(c)(3) organizations. See also the updated IRS web page that contains an explanation of key changes to the form and tips on how to get ready for the 2009 tax season. See the New Form 990 Series Phase In Chart for filing dates based upon financial activity.
New Form 990 Redesigned for Tax Year 2008
This is the IRS web page with a link to the new Form 990, Return of Organizations Exempt from Income Tax. The web page includes an overview of the redesign, as well as a discussion draft and background paper. This is the form filed by many public charities and other exempt organizations. The IRS will require this Form for tax returns filed in 2009. The IRS plans to release the related instructions in early 2008, and is working with the nonprofit sector on the instructions. There is a graduated transition period for smaller organizations. See the Press Release (on the linked page) for more on this transition period.
NACUBO comments on IRS Form 990 Instructions
June 4, 2008 comments on the draft instructions for the Form 990, the annual return used by IHEs to report information to the IRS.
April 7, 2008 IRS Posting: Form 990 for Tax Year 2008 (Forms, Draft Instructions and Highlights)
The new form will apply to fiscal/tax years that begin in 2008. Sean Scally (Tax Counsel for Vanderbilt) notes that compensation reporting (which used to be option on either a calendar or a fiscal year basis) must now be on a calendar year basis... no option available. He also notes to see the expanded definition of a "key employee" for compensation/benefits reporting purposes.
E-file for Charities and Non-Profits:
See this page for who must file electronically, along with the FAQ on e-filing for charities and nonprofits. For returns due on or after December 31, 2006, the regulations require tax-exempt organizations with total assets of $10 million or more who file at least 250 returns annually, to file Forms 990 electronically. In addition, private foundations and charitable trusts will be required to file Forms 990-PF electronically regardless of their asset size, if they file at least 250 returns annually.
If the district director for the key district in which the organization's principal office is located determines that the organization is subject to a harassment campaign, and that compliance with the requests are not in the public interest, then the organization does not need to fulfill a request for a copy that it believes is part of a campaign.