Are you tired or spending hour after hour gathering donor name and address information to submit with your organization’s 990 each year? If so, we may have great news for you. The IRS has announced that they will exercise their authority to grant relief to certain nonprofit organizations regarding donor information reporting requirements in their annual tax filings. This relief, however, is not applicable to 501(c)(3) organizations.
Currently under Section 1.6033-2(a)(2)(ii)(f) of the tax code, all types of tax-exempt organizations must report the names and addresses of donors who give contributions, gifts, grants and similar amounts of $5,000 or more in money or other property to the organization during the tax year. This information is reported on Schedule B of IRS Form 990 , IRS Form 990-EZ or IRS Form 990-PF. Though the information must be reported to the IRS, the IRS is not authorized to disclose any contributor to a tax-exempt organization except Private Foundations. Gathering this donor information often leads to increased administrative time and costs to the organization. Tax preparation fees also increase as tax preparers are required to input all of the name and address information while preparing the return.
Due to the additional time and resources required by the exempt organization to gather and report the information, as well as the additional resources required by the IRS to track the information, the IRS has concluded that they no longer need the personally identifiable information of donors to be reported on Schedule B. Section 1.6033-2 (g)(6).
The IRS has elected to exercise this authority for tax years ending December 31, 2018 or later (i.e. returns with initial due dates of May 15, 2018 and thereafter). The contribution information reported in other areas of the return will not be impacted. The relief only impacts Schedule B donor name and address information for non 501(c)(3) tax-exempt organizations filing IRS Form 990 or 990-EZ.
501(c)(3) organizations will still be required to include the donor information on schedule B of their returns as section 6033(b) if the tax code requires the disclosure. The IRS does not have authority to grant relief from that requirement.
Though reporting relief has been granted to non 501(c)(3) tax exempt organizations, those organization should still maintain the appropriate information in their records. The IRS will still need to examine specific taxpayer donors and organizations could be asked to provide this donor information to the IRS.
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About the Author
Drew Barman, CPA joined Wegner CPAs in August 2014 as a Staff Accountant in our Assurance Department. Drew works extensively with tax exempt organizations providing assurance and tax services. Adam annually attends continuing professional education seminars on accounting, auditing, compliance, and tax issues.