LawFlash

IRS Will No Longer Require Most Types of Tax-Exempt Organizations to Disclose Donor Names, Addresses

July 26, 2018

Organizations exempt from tax under Section 501(a) of the Internal Revenue Code, other than those exempt under Section 501(c)(3), are no longer required to report the names and addresses of their donors on Schedule B of Form 990 or 990-EZ. These organizations should continue to maintain this information in their records, and will be required to make such information available to the Internal Revenue Service upon request when needed for tax administration.

Revenue Procedure 2018-38

Effective for tax years ending on or after December 31, 2018, Revenue Procedure 2018-38 eliminates the requirement that tax-exempt organizations required to file a Form 990 or Form 990-EZ, other than organizations described in Section 501(c)(3) or Section 527, are required to include the names and addresses of their donors to the Internal Revenue Service (IRS) on Schedule B of their annual returns. This includes, for example, social welfare organizations exempt under Section 501(c)(4) and trade associations exempt under Section 501(c)(6). This change also applies to similar information that was previously required to be disclosed by organizations described in Section 501(c)(7) (social clubs), 501(c)(8) (fraternal beneficiary societies), and 501(c)(10) (domestic fraternal societies) for donors who contributed more than $1,000 for charitable purposes.

Revenue Procedure 2018-38 indicates that the change was made pursuant to Section 1.6033-2(g)(6) of the Treasury Regulations, which authorizes the IRS commissioner to “relieve any organization or class of organizations (other than an organization described in § 509(a)(3) [i.e., supporting organizations]) from filing, in whole or in part,” certain annual returns if the commissioner “determines that such returns are not necessary for the efficient administration of the internal revenue laws.” Revenue Procedure 2018-38 also states that the IRS “does not need personally identifiable information of donors to be reported on Schedule B of Form 990 or Form 990-EZ in order for it to carry out its responsibilities,” and identifies concerns such as increased compliance costs, consumption of IRS resources to redact donor information, and the risk of inadvertent disclosure of nonpublic information as reasons for the change.

Practical Effect of Revenue Procedure 2018-38

Revenue Procedure 2018-38 does not affect the information required to be reported on Form 990, 990-EZ, or 990-PF by Section 501(c)(3) organizations or Section 527 political organizations. Unlike other Section 501(c) organizations, Section 501(c)(3) and Section 527 organizations are required by statute to disclose donor information. The organizations affected by Revenue Procedure 2018-38 were subject to the donor disclosure requirement through the Treasury Regulations, which provides the IRS with the discretion to modify such requirement as applied to those organizations.

Revenue Procedure 2018-38 also only affects the reporting of names and addresses of donors—it does not otherwise affect the reporting of contribution information, nor does it affect Schedule B information that was previously open to public inspection. Thus, the change should have no effect on the information that is available to the public regarding donations to tax-exempt organizations.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Washington, DC
Celia Roady
Matthew R. Elkin
Alexander L. Reid
Caroline Waldner
Shira M. Helstrom

Philadelphia
Emmeline Babb