The Internal Revenue Service today announced proposed regulations to eliminate donor information disclosure requirements for certain nonprofits.  The proposed regulations provide “relief from requirements to report contributor names and addresses on annual returns filed by certain tax-exempt organizations, previously provided in Revenue Procedure 2018-38.”  Once the notice is published in the Federal Register, the IRS will accept comments on the proposal before finalizing the regulations.  The comments will be due 90 days after the date of publication, which is expected to be September 10, 2019.

The new proposed regulations respond to a Montana federal court ruling we reported on this summer that the IRS violated the Administrative Procedure Act when it issued Revenue Ruling 2018-38 without providing a notice-and-comment rulemaking procedure.  The Revenue Ruling had provided that tax-exempt organizations, other than Internal Revenue Code Section 501(c)(3) charities and Section 527 political organizations, were no longer required to report the names and addresses of contributors  to the IRS on Schedule B of the annual information return (Form 990).

Under the proposed regulations, tax-exempt organizations must continue to file Schedule B with an annual return but organizations, other than Section 501(c)(3) charities and Section 527 political organizations, would not include the names and addresses of contributors.  That information must be kept by the organization, in the event of an IRS request.  The proposed regulations would allow tax-exempt organizations to apply the regulations to any annual returns filed after today.

The IRS also issued Notice 2019-47, which exempts any tax-exempt organizations that failed to report donor names and addresses with their 2018 Form 990, based on Revenue Ruling 2018-38, from incurring penalties for following the IRS guidance.

Tags: donor disclosure, Form 990, IRS, Montana, rulemaking
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Photo of Susan Leahy Susan Leahy

Susan Leahy has advised tax-exempt, nonprofit organizations on tax and corporate governance matters for over 25 years. She assists organizations in obtaining and maintaining tax-exempt status and advises boards and senior executives on a range of governance policies and procedures.

In her work…

Susan Leahy has advised tax-exempt, nonprofit organizations on tax and corporate governance matters for over 25 years. She assists organizations in obtaining and maintaining tax-exempt status and advises boards and senior executives on a range of governance policies and procedures.

In her work with tax-exempt organizations that operate in the United States, as well as internationally, Susan regularly:

  • Counsels clients on the tax implications involving:
  • Self-dealing, inurement, and impermissible private benefit to individuals and for-profit companies;
  • Lobbying, and political activities;
  • Unrelated business income tax;
  • Excess benefit transactions and compensation of executives;
  • Joint ventures and relationships with for-profit organizations;
  • Mergers of tax-exempt organizations and the acquisition or donation of assets; and
  • Corporate sponsorship.

Advises nonprofit boards of directors, board committees, and management with respect to:

  • Corporate formation and good governance principles;
  • Preparation for board and committee meetings; and
  • Conflicts of interests.
  • Provides guidance on state corporate and tax compliance for nonprofit organizations.

“Susan has been my ‘Go-To’ attorney for adept legal strategy and guidance for over 20 years. Susan skillfully led our organization’s volunteer leadership through a needed transition with compassion and sensitivity. Her legal assistance remains invaluable!” a nonprofit organization client noted.

“I highly value Susan’s expertise, responsiveness, and pragmatism,” said another client. “Her insight and advice have proven invaluable time and time again and remain integral to our ability to operate quickly and nimbly.”

Susan is the past chair of the Exempt Organizations Committee of the District of Columbia Bar and a member of the American Bar Association. Susan received her J.D. from Catholic University of America, Columbus School of Law and a B.B.A. from St. Bonaventure University.

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