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IRS Finalizes Form 990 Donor-Disclosure Tax Rules

June 9, 2020

On Tuesday May 26, 2020, Treasury and the IRS issued final regulations to relieve certain tax-exempt organizations from reporting donor information on their IRS Forms 990. The final regulations largely adopt the proposed version of the regulations issued in September 2019. The final regulations only require 501(c)(3) and 527 organizations to continue to provide donor information on their annual information returns.

In the case of a 501(c)(3) organization, the organization generally needs only to provide in its IRS Form 990 the name, address, and donation amount of contributors whose gifts to the organization exceed the greater of $5,000 or 2% of the total amount of grants and contributions received by the organization during the year. However, all tax-exempt organizations must continue to record in their books and records the names, addresses, and donations of all contributors.

The issuance of the final regulations, like the issuance of the proposed regulations, is controversial and has been highly politicized, as it eliminates the need for various politically focused 501(c)(4) social welfare organizations and 506(c)(6) business league and trade associations to disclose to the IRS the amounts and identities of their donors.

The final regulations allow organizations to choose to apply the final regulations to tax returns filed after September 6, 2019. Otherwise, the rules are effective for tax returns that are filed after the date that the rules are published in the Federal Register, which is expected to be Thursday, May 28, 2020.

Here is the link to our earlier blog post on this issue.

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