Tis the Season – IRS Form 990 News

‘Tis the Season (May 15 will soon be here) for non-profits to file their IRS Form 990. With the May 15 deadline looming it may have been easy to have missed some recent 990 news … and there has been plenty.

New York Rulings

On February 15 the U.S. 2nd Circuit Court of Appeals issued its ruling in Citizens United v. Schneiderman (882 F.3d 374, Feb. 15, 2018). The Court ruled that New York’s regulation requiring non-profit organizations to disclose their donors (an unredacted Schedule B) with their registration filings did not violate their donors’ due process and 1st Amendment Privacy Rights. Many of you readers may recall my reporting, last summer, of two similar cases in California. In the California cases as well as the New York Citizens United v. Schneiderman case, the non-profits alleged that the California statute and the New York statute, requiring an unredacted Schedule B, violated their donors’ due process rights and 1st Amendment Privacy Rights. In the California cases, the U.S. 9th Circuit Court of Appeals, ruled that non-profit was entitled to present evidence that the California statute “…as applied to them…” violated their donors’ due process and privacy rights. At the trial the non-profits were able to show a mountain of evidence of their donors personal information being “leaked” and threats of assault and death directed at their donors. Those non-profits would be permitted to file a redacted Schedule B. However, it took an expensive and protracted trial process to get to that point.

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In the Citizens United v. Schneiderman case the 2nd Circuit court ruled that until there was actual evidence of specific “leaks” and threats to donors Citizens United would not be allowed to present evidence of generalized ill-will directed at their organization.

In Other 990 News

In the U.S. Congress House Resolution 4916 known as the Preventing IRS Abuse and Protecting Free Speech Act was introduced in early March. The Act seeks to bar the Treasury Department from requiring Section 501(c) groups to disclose the identities of their donors. If the bill passes the U.S. House and Senate and is signed by the President it would seemingly do away with the Schedule B.

The Arizona House of Representatives passed a bill reciting that municipalities would be prohibited from requiring any nonprofit to disclose donor information; i.e. an unredacted Form 990 Schedule B).

In Washington State the DISCLOSE ACT was signed by the Governor on March 19. The ACT requires nonprofits to disclose donors identities for certain amounts donated for ballot measure advocacy. The disclosure provision would be triggered if a nonprofit donates $10,000 to another organization which is engaged in advocating for any ballot measure. A nonprofit would have to disclose the identities of its top 10 donors above $10,000 and any donor above $100,000. The new law will become effective on January 1, 2019.