October 22, 1998 | Read Time: 2 minutes
The Internal Revenue Service is making plans to allow non-profit organizations to file their informational tax returns — Forms 990 and 990-PF — electronically.
Terry Lutes, the revenue service’s director of Electronic Programming Operations, said that charities have a few years to warm up to the idea of substituting bits and bytes for ink and paper. The I.R.S. plans to “develop and roll out an electronic 990 somewhere within the 2002-to-2005 time frame,” he said.
The move to offer electronic filing to non-profit organizations is part of a larger requirement by Congress to have 80 per cent of all federal tax returns, including Forms 990 and 990-PF, filed electronically with the I.R.S. by 2007.
Advocates for greater non-profit accountability have argued that electronic filing would help improve the quality of reporting by tax-exempt organizations. Mr. Lutes agreed, saying that the I.R.S. would be able to automatically reject any returns that came in with missing information if those returns were filed electronically.
Mr. Lutes emphasized that while specific work on an electronic 990 project would start several years from now, non-profit groups could help lay the groundwork now. For example, he asked them to help the I.R.S. gauge the interest in electronic filing by charities and foundations.
“If we build a system, will they come?” Mr. Lutes asked. “One of the things we’ve learned is that many people say, ‘We ought to able to file our returns electronically,’ but then when we’ve implemented those systems we’ve had very little participation. So one of the questions is going to be, ‘Does the customer — does the person filling out the 990 — feel the need for an electronic filing system?’ ”
Mr. Lutes spoke at a meeting on non-profit accountability at the Urban Institute, a non-profit policy-research organization in Washington.
