by Lisa A. Runquist
updated March, 2000
Exempt organizations are required to make their federal application for tax exemption (Forms 1023, 1024, etc.), and their federal informational returns (Forms 990, 990-EZ, etc.) available for inspection by anyone who requests to see them. However, in addition to this requirement, exempt organizations must also provide copies of these documents (or any part of them), without charge, other than a reasonable fee for reproduction, and actual postage costs to anyone who requests them, either in person or in writing.
The following is a summary of these requirements. Please note that this is a summary, and that there are still many areas which will require clarification. If any of them occur to you, please do not hesitate to contact us for assistance.
What type of organization does this apply to?
It applies to every organization that has received an exempt determination from the IRS under any section of 501(c) or 501(d). This includes churches that have established their exempt status. Even though they do not have to file Form 990 and thus do not have to make these forms available for inspection, they must still make the Form 1023 available for inspection, and make copies available if requested.
Although private foundations were initially excluded, beginning March 13, 2000, essentially the same regulations apply to private foundations as well.
Where can someone come to inspect/get copies of the documents?
What if we have more than one office?
What if we do not have a regular office?
The documents must be made available for inspection at the organization’s principal office, and (if the organization has more than one office) any regional or district offices, during regular business hours. A regional or district office is any office that has either full or part-time paid employees, whose aggregate number of weekly working hours is normally at least 120 (e.g. three full time employees or their part-time equivalents). However a site is not a regional or district office if the only services provided are to further the exempt purposes of the organization (such as a day care center, clinic, etc.) and the site does not serve as an office for management staff, other than those involved solely in managing the exempt function activities at the site.
An organization with regional or district offices has 30 days from the date its informational return is filed with the IRS to provide copies to the regional or district offices.
The organization may have a representative in the room during the inspection. However, the person inspecting must be allowed to take notes freely, and if he/she has brought along a copier, to copy the document.
If the organization does not have a permanent office, or has limited office hours, it may comply with the public inspection requirements by making the documents available for inspection at a reasonable location, within a reasonable time period after receiving the request (within 2 weeks), and at a reasonable time of day. It may mail copies of the requested documents in lieu of allowing an inspection, but may not charge the requester unless he/she consents to pay the charge.
How much can we charge if they want copies?
The organization can charge a reasonable fee, which the regulations define as no more than the fee charged by the IRS for providing copies. This currently is $1.00 for the first page, and $.15 for each additional page. In addition, it may charge the actual postage costs incurred in providing the copies.
The organization may require the individual to pay the fee before providing the copies. If payment is required before the copies are provided and the organization receives a written request, it must advise them of the amount due within seven (7) days from the date of receipt of the initial request. The organization must also respond to any questions from potential requesters concerning the fees for copying and postage of each document, with and without attachments, so that payment may be included with the request.
If prepayment is not required, consent from the requester must be obtained before the copies are provided if the charge for copying and postage will exceed $20.00.
The organization must accept any payment made by cash or money order; it may accept payment in another form. If the request is made in writing, an option to pay either by personal check or by credit card (one or the other) must be provided.
If the requester is advised as to what the fee is and they do not pay the fee within 30 days, or if they pay by check and the check does not clear, you may disregard the request.
Note: If the individual brings a copier to the inspection, he/she must be allowed to make copies directly, at no charge.
How soon do we need to provide copies of the requested documents?
Requests Made In Person. If the request is made in person at the principal, regional or district offices during regular business hours, copies of the documents should be provided on the day the request is made.
If there are unusual circumstances where fulfilling the request will place an unreasonable burden on the organization, copies must be provided no later than the next business day after the unusual circumstances cease to exist, or the fifth business day after the request, whichever occurs first. Unusual circumstances would include such occurrences as receipt of requests that exceed the organization’s daily capacity to make copies, requests received shortly before the end of the business day that involve substantial copying, or requests received on a day that the managerial staff capable of fulfilling the request are involved in a special assignment.
A local agent may be retained to process requests made in person for copies of the documents. However, the agent must be located within reasonable proximity of the office, the name, address and telephone number must be immediately provided to the requester, and the agent must timely furnish the copies.
Requests Made In Writing. An organization receiving a written request for a copy of its application or annual report(s) shall mail each copy within 30 days of receiving the request. However, if payment is required in advance, it must mail the copy within 30 days from the date it receives payment, as long as it has notified the requestor, within 7 days from the date it received the initial request, of its prepayment policy and the amount due.
If the requester consents, the document may be furnished by electronic mail; it will be considered to be furnished on the date the document is successfully transmitted.
A local agent may be retained to process written requests for copies. However, the agent is bound by the terms and conditions (including deadlines) that apply to the organization itself.
Exactly what part of the Exemption Application can someone inspect/ obtain copies?
The application for tax exemption must include any prescribed form (e.g. Form 1023 or Form 1024), all documents and statements filed as a part of the application or as part of any follow-up correspondence in support of the application, and any letters or documents issued by the IRS in regard to the application, including additional questions about the application.
If there is no prescribed form (for example, with an application for a group exemption), the application includes the application letter, copy of the articles of incorporation, bylaws, financial statements, statements describing the organization, its purpose and its activities, and statements showing the sources of the organization’s income and the disposition thereof, and any other documents required by the IRS or submitted in support of the application.
Note that if an application is still pending with the IRS and an exempt status is not yet determined, nothing need be furnished. In addition, if there is a part of the application that the IRS is required to withhold from public inspection, the organization need not make that part of the application available.
We don’t know where our Exemption Application is. What do we do?
If the application had been filed before July 15, 1987, and the organization did not have a copy of the application on July 15, 1987, it does not have to be made available.
However, if the application was filed on or after July 15, 1987, or if the organization had a copy available on that date, you must find the application. If our office filed the application on behalf of your organization and you need a copy, please let us know and we will furnish you with the same. If our office did not file the application, you should contact the IRS to obtain a copy from them. If you need our assistance in doing so, please let us know.
What Informational Returns have to be provided?
What must be provided as part of the Return?
An exact copy, as filed with the IRS, of any federal informational return (Forms 990, 990-EZ, 990-BL, 990-PF and Form 1065) must be made available, including all schedules, attachments and supporting documents. This includes any amended return.
Publicly supported organizations may delete the name and address of any contributor; private foundations may not. You also do not have to make available form 990-T (unrelated business taxable income), Schedule A of Form 990-BL, Schedule K-1 of Form 1065, Form 1120-POL, or 990-PF.
Each form must be made available for a period of three (3) years from the later of the date the return is required to be filed (plus extensions), or the date it is actually filed. Any amended return also must be made available for three (3) years from the date it is filed with the IRS.
What if the requester only wants part of the document?
If the requester clearly identifies the requested part or schedule, then that part must be furnished. The organization may not charge the requester for the entire Form 990 if only Schedule A is requested.
What if I think there is a harassment campaign against my organization?
If the IRS district director for the key district in which your organization’s principal office is located determines that your organization is the subject of a harassment campaign (requests are part of an effort to disrupt the operations of your organization, rather than to collect information), and that compliance with these requests are not in the public interest, you are not required to provide copies. Facts supporting the finding of a harassment campaign would include a sudden increase in the number of requests, an extraordinary number of requests made through form letters or similarly worded correspondence, requests that contain language hostile to the organization, evidence that the organization has already provided the requested documents, and the like. If you believe that you may be the target of a harassment campaign, you should contact our office so we can assist you in determining what steps you may want to take, which may include applying for a determination that you are the subject of a harassment campaign, and suspending compliance.
It would be appropriate to keep a log of all requests, whether in person or written, so that if a harassment campaign is instituted against your organization, you will have evidence of the type and number of requests normally being received, and documentation of the increased burden.
You may disregard any request for copies of all or part of any document beyond two received within a 30 day period, or four received within a one year period, from the same individual or the same address, without a determination of harassment from the district director.
What if we are under a group exemption?
Application for tax exemption. If your organization did not file its own application for tax exemption, you must still, upon request, make available for inspection or provide copies of the application as filed by your parent organization, including any documents submitted to include your organization under the group exemption letter. If your parent organization submits a directory of organizations covered by the group exemption letter, you only need furnish the application itself, and the pages of the directory that specifically refer to your organization.
Annual information return. If your organization does not file its own annual information return, you must upon request, make available for inspection or provide copies of the group returns filed by the parent organization. If the return has a separate schedules for each organization covered, you may omit schedules that relate only to other organizations.
General. You have a reasonable amount of time (generally no more than two weeks) to comply with the request made in person for public inspection or copies. Where the requester seeks inspection, you may mail a copy of the documents within this same time period instead of allowing an inspection; in such a case you may charge for copying and postage only if the requester consents to the charge.
For requests for copies made in writing, you must comply with the same time limits that are discussed elsewhere in this letter.
The requester may also request, from the parent organization at its principal office, inspection or copies of the application for group exemption or the group returns, and the material submitted to include the local organization specified by the requester.
If I post these documents on my website, do I still have to make them otherwise available?
If you have made the documents widely available, you do not have to provide a copy of the documents; however, you must still make the documents available for public inspection as described above. You must also notify any individual requesting a copy where the documents are available (including the website address). If the request is made in person, the notice must be given immediately. If the request is made in writing, notice must be provided within 7 days of receiving the request.
To be widely available, you must comply with the following: 1) The document(s) must be posted to your website or as part of a database of similar documents on another website; 2) the website clearly informs readers that the document is available and provides instructions for downloading it; 3) the document is posted in a format that exactly reproduces the document as it was originally filed with the IRS, except for information permitted by statute to be withheld from public disclosure; 4) any individual with access to the Internet can access, download, view and print the document without any special hardware or software (other than software that is readily available to members of the public without payment of any fee), and without payment of a fee to your organization or to the entity maintaining the website; 5) there must be procedures in place to ensure the reliability and accuracy of the document posted. If the posted document is altered, destroyed or lost, it must be corrected or replaced.
Currently, the only format that complies with the requirements set forth above is the PDF format. However, this may change, and the IRS is not mandating a specific format, as long as the requirements above are met.
What is the penalty if I do not make the documents available?
An individual who has been denied inspection or a copy of an application for tax exemption or an annual information return may notify the IRS of the possible need for enforcement action. The penalty for failure to comply with the public inspection or copying requirements is $20 per day during the time the failure continues. For the annual information returns there is a maximum penalty of $10,000 per return.
This is a complex area, and the time for compliance is short. If there is anything we can do to assist you, or if you have any questions about any of these issues, please do not hesitate to contact us.
TY 2008 Form 990 – Redesigned
Form 990-EZ now amended you can get <it here>