One of the responsibilities that comes with your tax-exempt status is to disclose certain information about your tax-exempt status. You must make certain documents available to the public for inspection and copying. This disclosure also extends to political organizations. We will discuss the requirements this article.
In general, tax-exempt organization must make available copies of their application for exemption, all attachments submitted with the application and the IRS approval letter during normal business hours. In addition, you must make available the most three recent forms 990.
You must make these documents available for inspection and copying at your principal office to a public request. If somebody submits a written request, you must respond within 30 days. A written request must contain a list of requested documents and an address to which you can respond.
You are allowed to make reasonable charge for copies. However, you cannot charge more than what the IRS would charge for comparable copies. You can also ask for payment of the copy and postage in advance.
There are certain exceptions to the disclosure rules. this rule. The most widely available exception states that if you put these documents on your website then you are not required to make documents available upon an in-person requests. In addition, if somebody were to come in at the last minute on the business day and demand copies you are allowed to make the copies on the next business day. If the request presents an unreasonable burden or if there are unusual circumstances such as a high volume of requests then you can comply by the fifth business day. There are also exceptions for harassment campaigns which is defined in the regulations.
There are penalties for not complying. If you do not comply, the individual may alert the Internal Revenue Service to the possible need for enforcement by sending a letter to the appropriate district office. In addition, if you do not provide copies within the time required, you can be assessed a penalty of $20 per day for each day the failure continues, up to a maximum of $10,000. There is reasonable cause exception but proving reasonable cause is not always easy. In addition, person who willfully refuses to comply with the request for a form 990 can be assessed $5000 penalty for each return or application.
You should keep these disclosure requirements in mind as we approach the due date for the form 990. You also need to keep in mind that forms 990 are available now from the IRS as well as Guidestar. It is a public document and you should use it to your best advantage to tell your story and how effective you are in your mission. If you have questions about the disclosure requirements please give us a call.
