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More Disclosure by tax exempt organizations in USA

Jul 07, 1998 05:43 PM
by M K Ramadoss

When any organization obtains tax exempt status from Federal Income
Taxation, in effect taxpayers are subsidizing the organizations. Over a
period of time there have been efforts to expand the availability of
information about the organizations based on the fact that more disclosure
is in public interest. Already many types of information is in public
domain at this time.

Here is the latest from IRS. BTW, there is encourgement to make the
information available on Internet so that anyone could access them any
time. Tune in for more of the same in future.


From THE EO TAX BULLETIN, 1998-#9, July 7, 1998

"Disclosure Rules Will Increase Public Interest in Form 990, Owens Says

     New public disclosure rules for tax-exempt organizations could have a
"significant impact" on exempt organizations' relations with the public,
IRS Exempt Organizations Division Director Marcus S. Owens said June 18.

     Speaking in Washington at a conference on nonprofits sponsored by the
AICPA, Owens said he expects the disclosure requirements under section
6104(e) -- which require an exempt organization to provide a copy of its
Form 990 information return immediately to someone who requests it in
person and within 30 days if a request is made in writing -- will lead to
greater interest by the public in the finances and activities of exempt
organizations. For that reason exempts should fill out their information
returns completely and accurately, he advised.

     "I think it behooves organizations to begin looking at the 990 as
primarily a communication document with the public," Owens said, explaining
that in filling out the return, exempt organizations often seem to think
the less they say to the IRS the better off they are. "That has the
potential of backfiring for charities that are looking for money from the
public. The Form 990s are going to be circulated. The data is going to be
out there." He also noted there is space on Form 990 for an organization to
explain what it does to deserve its exempt status. He predicted
organizations will be more accurate in completing Form 990 because of the
form's increased visibility."

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