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Giving Compass' Take:
• Allison Grayson informs readers of a House bill which would change the way nonprofit organizations must file their taxes in this Independent Sector story.
• Are you involved with organizations that would be affected by this bill? What would the costs and benefits of this bill be if it were signed into law?
• To learn about how the Trump Administration's 2017 tax reforms affected nonprofit organizations, click here.
[Recently], the House of Representatives passed legislation that included instituting mandatory electronic filing of Form 990s for all tax-exempt organizations. The provision is a part of the Taxpayer First Act (H.R. 1957), sponsored by Rep. John Lewis (D-GA) and Rep. Mike Kelly (R-PA), which aims to modernize and refine processes to make the IRS more efficient. Despite uneasiness early in the week from some progressive legislators, the legislation ultimately passed by simple voice vote and continues on to the U.S. Senate.
[T]he aforementioned Form 990 electronical filing requirement [would make] the returns available for public inspection. This eliminates the threshold that requires only exempt organizations with assets over $10 million to file electronically. Mandatory electronic filing is a policy proposal supported by experts from across the sector. A 2013 report from Urban Institute says, “The IRS Form 990 series provides critical transparency and accountability for the nonprofit sector and is the primary source for basic information on the nonprofit sector taken as a whole… [Mandating electronic filing] would provide comprehensive data on the sector to the public more quickly and accurately.”
Another provision in the bill requires the IRS to notify a nonprofit organization after the second year it fails to file a required annual information return (Form 990). The goal is to ensure nonprofits are aware of their obligation to file and have sufficient time to submit an information return to prevent the revocation of their tax-exempt status.
Read the full article about the Form 990 electronic filing requirement by Allison Grayson at Independent Sector