Nonprofit Organizations

Nonprofit Data Collective Members Submit Comments to the IRS

December 12, 2022  • Program on Philanthropy and Social Innovation

Nonprofit Data Collective Members Submit Comments to the IRS Urging Regular, Complete 990 Data

Leading members of the U.S. nonprofit community, concerned about a backlog of nonprofit tax forms that has reached historic proportions, recently submitted comments on the Form 990 series to the Internal Revenue Service.

As Candid has noted, the IRS has yet to post tens of thousands of 2019 filings and 30% of 2020 990 filings. Delays are considerably worse for Form 990-PFs: only 76% of 990-PF filings from 2019 have been posted.

Such delays carry major repercussions for the tax-exempt sector, the comments state. For example:

  • Nonprofits that have filed their 990s on time are unfairly suspected of being out of compliance because the IRS has failed to post their tax forms;
  • Fundraising is impeded by a lack of access to the latest filings on foundation grantmaking; and,
  • Donors — deprived of charities’ most recently-filed financial and governance information — are potentially misinformed.

The official IRS Advisory Council raised such concerns recently in its 2022 report. Speaking directly to the lack of timely, consistent, and complete Form 990 data provided by the IRS, the Council recommends that the IRS “identify operational improvements to ensure all available data is uploaded and available on the website in a timely and consistent manner and information posted is a complete representation of filed documents.”

The comments also call on the IRS to support the tracking of government funding to the nonprofit sector: “This is an especially important time to track government funding of tax-exempt organizations, but this is not possible due to changes that were made to the Form 990 in 2008.”  A bipartisan bill in Congress, the Nonprofit Sector Strength and Partnership Act, echoes this recommendation.

The groups and individuals who submitted the comments work in partnership with the Nonprofit Open Data Collective convened by the Aspen Institute’s Program on Philanthropy and Social Innovation. These nonprofit organizations, donor groups, researchers, data scientists, and Form 990 platforms play a key role in taxpayer compliance by communicating with the public, particularly donors, through the provision and analysis of “open” 990 data and the gathering data on trends in tax-exempt activities, finances, and governance.

Signatories to the comments include Candid, Charity Navigator, Independent Sector, National Committee for Responsive Philanthropy, and the Dorothy A. Johnson Center for Philanthropy at Grand Valley State University, as well as prominent scholars of tax-exempt activity in the United States writing in their individual capacities.

DOWNLOAD THE COMMENTS HERE

For more information, contact Cinthia Schuman Ottinger at [email protected].