August 26, 1999 | Read Time: 2 minutes
The Internal Revenue Service has issued its proposed regulations on how private foundations must comply with a new law designed to give the public greater access to their annual informational tax returns.
Last year, Congress passed legislation to make foundations follow the same disclosure requirements as charities do. But the law will take effect only after the I.R.S. issues final regulations on how it will enforce the statute.
Under the new law, foundations will have to provide photocopies of their three most-recent tax returns — and their original applications for tax-exempt status — to anyone who requests them in person or in writing.
Foundations currently need only make their tax returns available to the public for inspection for 180 days from the date they publish a notice that they have filed the returns.
Exemptions from the copying requirement will be made if foundations make their returns “widely available” through the Internet. The new law drops the requirement that private foundations publish notices that they have filed their returns.
Congress had stiffened the requirements for public access to charities’ informational tax returns in 1996, but the changes only started to make a big difference for most groups this spring. Since June 8 charities have been required to follow the law and the service’s new rules for disclosure of their tax forms (The Chronicle, April 22).
The process for putting the foundation law into effect is moving quickly — in part because the tax agency borrowed the same rules that it used for charities.
But there are some differences. For example, the proposed regulations make clear that private foundations, unlike charities, will have to make available copies of the names and addresses of their contributors. And the I.R.S. says that foundations will have to make widely available Form 4720, on which they report payment of certain taxes.
Like charities, foundations will not have to accede to requests for information when it is clear that the purpose of the requests is to disrupt the organization’s operations. Foundations will be able to charge a reasonable fee for providing photocopies.
The I.R.S. said that it welcomed written comments on its proposal as well as requests for a public hearing on the matter.
Comments and requests that the service hold a hearing on the proposal must be submitted to the revenue service by October 12. They should be mailed to: CC: DOM:CORP:R (REG — 121946-98), Room 5226, Internal Revenue Service, POB 7604, Ben Franklin Station, Washington 20044.
They also may be sent to the I.R.S. electronically by following the instructions on the revenue service’s Web site at http://www.irs.ustreas.gov/tax_regs/regslist.html.
The proposed regulations were published in the August 10 issue of the Federal Register, Pages 43,324-27.
The full text of the proposed regulations is available on The Chronicle’s Web site.
