Tax-exempt organizations other than those organized under 501(c)(3) or political organizations (under Section 527) will soon be able to leave off donor names and addresses from their Form 990s. The change to the annual tax filings will apply to tax years ending on or after Dec. 31, 2018, according to IRS Rev. Proc. 2018-38. Requirements for 501(c)(3) and Section 527 organizations remain the same. These organizations will continue to report the names and addresses of donors that meet certain threshold requirements as part of their Form 990, Schedule B.

Traditionally donors have been listed as part of a tax-exempt organization's Form 990 because individuals can claim a tax deduction for charitable contributions. The Form 990 Schedule B provides the IRS a way to double check the validity of the individual's charitable contribution claim. Contributions made to non-501(c)(3) organizations are typically not deductible, however. In a joint statement released on July 16, Treasury Department secretary Steven Mnuchin said that eliminating the requirement "will make our tax system simpler and less susceptible to abuse."

Although tax-exempt organizations other than non-501(c)(3) or Section 527 organizations will be able to forgo reporting the names and addresses of their donors on Schedule B, they should continue to keep records of donor information in the event the IRS requests to inspect them.

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If you have any questions or comments about the above changes to the Form 990, please contact us.

Published on July 26, 2018