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06/03/2020

IRS finalizes rules easing donor reporting requirements for certain exempt organizations

On May 26, 2020, the IRS released final regulation T.D. 9898, which updates the information reporting rules for exempt organizations under Internal Revenue Code (IRC) Section 6033. These final regulations adopt, with minimal changes, proposed regulation REG-102508-16 and provide that organizations other than those exempt under Section 501(c)(3) and Section 527 are no longer required to include identifying information such as names and address of donors when completing their Schedule B. Organizations such as those exempt under Section 501(c)(4), (6), or (7) are only required to list amounts on the Schedule. As a result, the Schedule B for such organizations would mirror the public inspection copy.

It is important to note that while the requirement for listing donor names and address has been lifted, organizations will still be required to complete Schedule B. The regulations are effective as of May 28, 2020, and organizations may choose to apply the final rules to returns filed after Sept. 6, 2019.

Organizations that are exempt under Section 501(c)(3) and Section 527 will still be required to follow the old rules and report names and addresses for all contributors when submitting Schedule B as part of a complete Form 990 filing to the IRS. However, the identifying information such as names and address should continue to be excluded from the public inspection copy, as this information is not open to the public. 

After considering the 8,387 written and electronic comments that were received, the Treasury and the IRS included in the final regulations a modification to indicate that states are free to require reporting of donor information to the state.

The final regulations do not affect private foundations. These organizations should continue to report identifying information of contributors on Schedule B when submitting their complete annual filings to the IRS, as well as in all public inspection copies.

What does CohnReznick think?

The IRS issued these new rules as a way of easing some of the administrative burden on organizations that are not in the business of solicitation. The IRS also recommends that organizations that do qualify for this new lightened reporting requirement still keep track of such identifying information in their books and records should the IRS ever request it. 

Contact

Lori Rothe Yokobosky, CPA, Partner, Exempt Organizations Tax Services Practice Leader

973.403.6940

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    Contact Lori Lori+Yokobosky lorirothe.yokobosky@cohnreznick.com
    Lori Yokobosky

    CPA, MST, Partner & Exempt Organizations Tax Services Leader

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