Congress Passes Bill to Force Charities to File Tax Forms Electronically

Congress has approved legislation that would require most nonprofits to file their informational tax returns with the Internal Revenue Service in an electronic format that is easily searchable by the public, a move that would give nonprofit officials, regulators, journalists, and scholars a clearer look into nonprofits’ operations.

The bill, which passed the Senate by voice vote Thursday, awaits President Trump’s signature. If signed into law, the provision would take effect next year.

Small nonprofits, those with annual revenue of less than $200,000 and assets of less than $500,000, may ask the Treasury Department for a two-year delay if filing electronically would create an “undue burden.”

Comparing Finances

Watchdog groups have been pressing Congress to require nonprofits to file in “machine-readable” formats, which allow users to sort, search, and aggregate data about nonprofits’ finances, governance, and programs. Doing so would allow the public to get a better view of how individual nonprofits stack up to their peers and how nonprofits in a certain region compare with others across the country.

Last year, a Chronicle survey found that one-third of tax-exempt organizations that regularly make annual filings chose to file on paper rather than submit their information electronically.