The IRS released final regulations related to donor disclosures for not-for-profit organizations on May 26, 2020, with provisions now in effect as of May 28, 2020.
An overview of the provisions follows.
Tax-exempt organizations—with the exception of 501(c)(3) organizations and section 527 political organizations—no longer need to report donors’ names and addresses on Schedule B of Form 990 or Form 990-EZ.
The final regulations don’t change the requirement for all tax-exempt organizations to report the amounts of contributions on Schedule B. In addition, tax-exempt organizations are still required to maintain the names and addresses of donors in case the IRS requests the information.
The final regulations adopt proposed regulations issued in September 2019 with minor modifications.
The IRS had introduced similar rules through Revenue Procedure 2018-38, but a federal district court vacated that guidance in 2019 in Bullock v. IRS. After the court ruling, the IRS issued proposed regulations on the matter, before releasing these final regulations.
Several state attorneys general had opposed the Schedule B reporting change, particularly surrounding 501(c)(4) social welfare organizations and 501(c)(6) professional and trade associations.
In the summary issued with the final regulations, the IRS notes that states are free to implement their own reporting requirements on contributors.
In addition to the changes to Schedule B, the final regulations codified several revenue procedures and other rules regarding reporting by tax-exempt organizations that hadn’t been in the previous regulations.
These include amending the regulations to replace the $5,000 average gross receipts threshold for filing Form 990 or 990-EZ, with the $50,000 filing threshold already in effect under a revenue procedure. Exempt organizations falling under the threshold are still required to file the Form 990-N electronic postcard.
The regulations also clarify that the commissioner of the IRS may provide additional relief to filing requirements—including increasing the filing threshold—through forms, instructions to forms, or guidance published in the Internal Revenue Bulletin.
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