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Changes to Donor Disclosure Requirements

Under newly released rules, certain tax-exempt organizations are no longer required to disclose personally identifiable donor information on their annual Form 990 filings.  This change does not affect Section 501(c)(3) or Section 527 organizations.

The U.S. Treasury Department and the Internal Revenue Service (the “IRS”) released Revenue Procedure 2018-38 at the end of July, which releases tax-exempt organizations described in Section 501(c) of the Internal Revenue Code that are required to file Form 990, except Section 501(c)(3) organizations, from the requirement to report the names and addresses of their contributors on Schedule B of their annual Forms 990 or 990-EZ.  These organizations must continue to collect and maintain this information in their records and make it available to the IRS upon request.

Section 6033 of the Internal Revenue Code expressly provides that organizations described in Section 501(c)(3) (with certain exceptions, such as churches) must disclose to the IRS on their annual Form 990, 990-EZ or 990-PF filings the names and addresses of persons who contributed $5,000 or more in money or property during the tax year.  (Private foundations must disclose the names and addresses of all “substantial contributors” as defined in Section 507(d), which generally means the same thing.)  This requirement also applies to Section 527 political organizations. 

This disclosure requirement had previously been extended by regulation to other 501(c) organizations—including, for example, 501(c)(4) social welfare organizations, 501(c)(5) labor organizations, 501(c)(6) business leagues and chambers of commerce, and 501(c)(7) social clubs—groups that generally do not receive tax deductible contributions from donors.  In addition, the regulations required organizations described in Sections 501(c)(7), (c)(8) and (c)(10) to provide names of persons who contributed more than $1,000 during the tax year.  Revenue Procedure 2018-38 reverses these rules, leaving the donor disclosure requirement intact for 501(c)(3) organizations and 527 political organizations to which it currently applies but exempting other tax-exempt organizations.

Organizations must still report certain information, such as the amount of contributions, to the IRS.  But the IRS has determined that it does not need personally identifiable information of donors to carry out its enforcement responsibilities.  According to Treasury Secretary Steven T. Mnuchin, “Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area.” 

An organization’s Form 990 remains available to the public upon request, and these new rules do not affect the reporting of Schedule B information that is currently required to be made publicly available.