July 16, 1998 | Read Time: 2 minutes
The Internal Revenue Service expects that its soon-to-be-released rules making it easier for the public to get copies of charities’ informational tax returns will force organizations to file forms that are more accurate and complete than they have traditionally been, according to Marc Owens, director of the service’s Exempt Organizations Division.
Charities are now required only to show copies of their tax returns, called Forms 990, to anyone who visits their offices in person. Organizations do not have to provide visitors with their own photocopies to keep.
A federal law enacted two years ago requires charities to provide copies of their three most-recent tax returns immediately to anyone who requests them in person. The law says non-profit groups have 30 days to send copies to people who make written requests.
Even though the legislation was passed in 1996, it will not take effect until 60 days after the I.R.S. issues final rules explaining how it will enforce the statute (The Chronicle, October 16). The service expects to release those regulations soon and give charities the option of making their returns available through the Internet.
Meanwhile, the I.R.S. itself has been trying to be as quick as possible in handing out copies of Forms 990 to those who contact the government directly, Mr. Owens said.
“The service has been in the past very concerned about the accuracy of 990 data,” he said. “The by-product of increased accessibility is going to be increased accuracy. More and more eyes will be looking at the Form 990, particularly ones that ‘reside’ in the same community [as a charity], and can look at the information reported and compare it with what they can see in the organization’s day-to-day activities.”
Mr. Owens said that the greater accessibility of tax returns should lead charities to view the forms in a different light.
Until now, he said, the return “has tended to be viewed as a tax form: the organization talking to the I.R.S., and the less you say to the I.R.S., the better off you are.”
Now, said Mr. Owens, “it behooves organizations to begin looking at the 990 as primarily a communication document with the public.” He added, “There are places on the 990 where the organization can include a narrative description of what it does. It’s their opportunity to explain what they do in return for their tax exemption.” Mr. Owens spoke at a conference of the American Institute of Certified Public Accountants in Washington.
