Exempt Organizations May Not Need to Include Donor Information on Returns
Donor information is a prized asset for any not-for-profit organization. Tax-exempt organizations, other than charities exempt under Code Sec. 501(c)(3), will soon be able to stop reporting the names and addresses of contributors on Schedule B when filing their information returns. Organizations exempt from tax under Code Sec. 501(a) that are required to file Form 990, Return of Organization Exempt from Income Tax, or Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, will still be required to collect and record this donor information, and make it available to the IRS upon request.
Tax-exempt organizations are required to keep donor information records and accounts of gross income, receipts, and disbursements under Reg. §1.6001-1(c). Code Sec. 6033(a) requires certain tax-exempt organizations to report such information, and other information required by forms or regulations, on the applicable forms, which include Form 990, Form 990-EZ, Form 990-PF, Return of Private Foundation, and Form 990-BL, Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons. Code Sec. 6033(b) requires that 501(c)(3) organizations also furnish information on additional items, including total contributions and gifts received during the year, and the names and addresses of all substantial contributors.
However, the implementing regulations under Code Sec. 6033 generally require:
- all exempt organizations to report the names and addresses of all persons who contribute $5,000 or more in a year; and
- exempt social clubs, fraternal beneficiary societies, and domestic fraternal societies (organizations exempt under Code Secs. 501(c)(7), 501(c)(8), and 501(c)(10), respectively) to also report the names of each person who contributes more than $1,000 during the tax year to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.
To comply, exempt organizations provide the names and addresses of donors on Schedule B, Schedule of Contributors, filed with Forms 990, 990-EZ, and 990-PF. Black lung benefit trusts report this information in Part IV of Form 990-BL.
Public Inspection Requirement
Code Sec. 6104(b) requires the IRS to make these information returns available to public. Code Sec. 6104(d) similarly requires most exempt organizations to provide their annual information returns upon request to members of the public. However, both the IRS and the exempt organizations are restricted from disclosing any donor names or addresses except when the contribution is to a private foundation or a Code Sec. 527 political organization.
Donor Information Reporting Not Required
Under the revised reporting requirements:
- Tax-exempt organizations required to file Form 990 or Form 990-EZ, other than those described in Code Sec. 501(c)(3), will no longer be required to provide contributors’ names and addresses on Forms 990 or Forms 990-EZ. Accordingly, these organizations will not be required to complete these portions of their Schedules B (or the similar portions of Part IV of the Form 990-BL).
- Exempt social clubs, fraternal beneficiary societies, and domestic fraternal societies will no longer be required to provide on Forms 990 or Forms 990-EZ the names and addresses of persons who contributed more than $1,000 during the tax year to be used for exclusively charitable purposes.
These donor information reporting changes do not affect:
- the information required to be reported on Forms 990, 990-EZ, or 990-PF by Code Sec. 501(c)(3) (including for these purposes nonexempt charitable trusts under Code Sec. 4947(a)(1) and nonexempt private foundations under Code Sec. 6033(d)) or political organizations under Code Sec. 527;
- the reporting of contribution information (other than contributors’ names and addresses) required to be reported on Schedule B of Forms 990 and 990-EZ and Part IV of the Form 990-BL; or
- the disclosure requirements under Code Sec. 6104(b) or (d) of any information reported on Schedule B of Forms 990 and 990-EZ and Part IV of the Form 990-BL.
The donor information reporting changes will have no effect on the reporting of Schedule B information that is currently open to public inspection.
Organizations relieved of the obligation to report contributors’ names and addresses must continue to keep donor information in their books and records. This is needed to allow the IRS to efficiently administer the tax laws through examinations of specific taxpayers.
The revised donor information reporting requirements will apply to information returns for tax years ending on or after December 31, 2018. Thus, the revised reporting requirements generally will apply to returns that become due on or after May 15, 2019. Questions regarding how the revised donor information may affect your tax return? Contact your Maloney+Novotny representative using this online form.