What happens when a reporter calls your nonprofit and asks for its most recent IRS Form 990 information return? Must you provide it to the reporter? A complete version? How soon? And what if you refuse the request?
As most nonprofit leaders recognize, tax-exempt organizations must file an annual IRS Form 990. Until now, only very large or very small nonprofits were required to e-file. In addition, a nonprofit could lose its tax-exempt status without prior IRS notice, upon three consecutive years’ failure to file Form 990s. But under the newly enacted Taxpayer First Act (H.R. 3151) (“Act”), effective July 1, 2019, the Form 990 filing landscape has changed significantly.
Can controversial nonprofits expect government protection from mandatory disclosures of their donor participants? New Jersey is the latest state to respond “No,” at least when Section 501(c)(4) social welfare organizations engage in lobbying or other politically related activity. Americans for Prosperity Foundation, a Section 501(c)(4) organization has asserted “Yes,” challenging this so-called “dark money” reporting and donor disclosure law as a First Amendment violation. AFP’s challenge follows on the heels of its valiant (but thus far defeated) effort against California’s more narrow donor disclosure law. Balancing our nation’s constitutional history regarding freedom of speech, association and expression rights, and related privacy interests against New Jersey’s onerous donor disclosure requirements, AFP should win the day with its newly filed injunction action.