Non-Profit Organizations & Disclosure Laws
Most tax-exempt non-profit organizations are required to file annual reports about financial details and make certain forms available for public perusal. For example, forms submitted to the United States Internal Revenue Service (IRS) in the last three return years must be made available. These rules most often apply to charities, schools, business leagues, labor organizations, volunteer employee beneficiary associations, certain political organizations and social clubs.
Other People Are Reading
-
Forms Required
-
Most commonly these are IRS Form 990 and Form 990 Schedule A, which deal with recent federal annual information returns, and Forms 1023 and 1024, which concern the non-profit`s application for tax-exempt status. All applications filed to obtain tax-exempt status on or after July 15, 1987 are necessary, including all accompanying material for the application or tax return.
Tax-exempt Political Organizations
-
These groups are required to produce Form 8872, a Political Organization Report of Contributions and Expenditures. They do not have to share the form for US Income Return for Certain Political Organizations (Form 1120-POL).
-
Disclosure Requirement Specifics
-
Organizations must supply copies of all requested documents to the public unless they are widely available through their website. Organizations must provide the materials for inspection if requested in person at the office location of the non-profit or by mail within 30 days of receiving a written inquiry. When complying with written requests the organization is allowed to ask for postage and copying fees totaling $1 for the first page and 15 cents for subsequent pages. If the person is only asking for certain pages or documents, the organization must comply and, if sending via mail, only charge them accordingly.
Exceptions
-
These disclosure rules do not apply to groups defined by the IRS as "most split-interest trusts, farmer`s cooperatives exempt under section 521 homeowners' associations exempt under section 528; and qualified state tuition programs exempt under section 529." The US Code section 6104(a)(1)(D) states that organizations do not have to release information if it "relates to any trade secret, patent, process, style of work, or apparatus, of the organization" or if the IRS decides public disclosure would hurt the organization or national defense.
Noncompliance
-
In the case of noncompliance, an uncooperative individual nonprofit staff member can be held personally responsible and fined $20 for each day the request goes unanswered. The total fine will not exceed $10,000.
-
