Hurry up and Wait: The IRS is Two Years and Half a Million 990s Behind

ProPublica reports that the IRS is about two years and half million 990s behind in its record release:

According to a ProPublica review of public IRS data, which powers our Nonprofit Explorer database, the agency is behind on releasing nearly half a million tax records, known as Form 990s, for tax-exempt organizations. The delays, which began two years ago, are stymying access to key financial information that governments, the public and grantmakers use to evaluate the nation’s tax-exempt companies. The gap in reporting has become so profound that state charitable enforcement officers are sounding the alarm. In November, the National Association of State Charity Officials sent a letter urging the IRS to address backlogged 990 data releases . . .

“For charity regulators, the Form 990 series not only helps ensure transparency and accountability, but also provides vital information for state investigations into potential fraud and misuse of charitable resources,” the organization wrote. “It is critical that the availability of that data be timely.”

Here is an excerpt from the letter from state charity regulators:

The NASCO board strongly supports the public availability of information nonprofits report through the Form 990 series and urges the IRS to address delays in the timely availability of these forms.

The Form 990 series is a critical tool for charity regulators, donors, grantors, and the public. For charity regulators, the Form 990 series not only helps ensure transparency and accountability, but also provides vital information for state investigations into potential fraud and misuse of charitable resources. For discerning donors, the Form 990 is an important source of information to support wise giving practices. For responsible grantors, the Form 990 can be an important tool to examine the financial health of potential grantees and ensure they are in compliance with regulatory obligations.

Lags in the availability of the critical data contained in the Form 990 adversely affect regulators, the public, and most importantly, the nonprofit. Because many NASCO member offices rely on the publicly available versions of Forms 990 submitted to the IRS rather than requiring submission of the Forms 990 to their state offices, it is critical that the availability of that data be timely. We are aware of and have observed significant lags in the amount of time between when charities submit Forms 990 to the IRS and when the IRS posts them. This creates an incomplete picture of a charitable organization when a NASCO office undertakes an investigation of a charity and can lead to confusion for potential charitable donors and others.

Now I know why its hard to find the 2022 return for the Musk Foundation (I rant and rave about Musk’s legitimate but unjustifiable tax avoidance via the charitable contribution deduction tomorrow).   

dkj