Nonprofits challenge the constitutionality of IRS Form 990
The IRS Form 990is a twelve-page document that requires most federally tax-exempt organizationsto disclose their mission, programs, and financial information. If anorganization required to complete a Form 990 fails to do so, the organizationis at risk of losing their tax-exempt status.
Additionally, thelist of organizations required to complete the form includes all private501(c)(3) organizations. Recently, many nonprofit organizations have lost theirtax-exempt status for failure to complete the form. However, absent on thelists of organizations required to complete the form are faith-basedorganizations such as churches.
The fact thatthe IRS excludes churches from completing the Form 990 has caused some of the requiredorganizations to bring suit alleging the IRS is wrongfully engaging inpreferential treatment of churches. Further, these organizations are askingthat the court declare the exemptions void as a violation against the EstablishmentClause of the United States Constitution.
Exemptingchurches from completing the Form 990 raises not only interestingconstitutional questions, but also more basic fundamental questions as to thejustification for exempting faith-based organizations in the first place.
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