IRS finalizes regs. on public disclosure and inspection of tax-exempt organization's documents.

• Author: Mayer, Tom
• Position: IRS regulations

On April 9, 1999, the IRS released final Regs. Sec. 301.6104(d)-3-5, on public disclosure and inspection of exemption applications and annual information returns filed by tax-exempt organizations (described in Sec. 501(c) and (d)). These regulations were effective as of June 8, 1999.

The Tax and Trade Relief Extension Act of 1998 contained provisions that expanded the public disclosure and inspection requirements applicable to all tax-exempt organizations. However, private foundations are excluded from these requirements, at least until the Service issues final regulations that apply specifically to them.

Discussion

The Taxpayer Bill of Rights II amended Sec. 6104 to significantly increase public access to a tax-exempt organnization's exemption application, as well as to annual information returns filed by the organization for its past three fiscal years. This modification requires all tax-exempt organizations described in Sec. 501(c) and (d) to comply with both in-person and written requests for the documents, Requests made during regular business hours at the tax-exempt organization's principal office, as well as at certain regional and district offices, must be satisfied.

Documents That Must Be Made Available

A tax-exempt organization's exemption application includes either Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, or 1024, Application for Recognition of Exemption Under Section 501(a) for Determination Under Section 120 of the Internal Revenue Code, and all supporting documents submitted to the IRS in connection therewith. Also subject to disclosure is any related correspondence received from the Service, such as questions about the application and the organization's determination letter. An organization that has applied for, but not yet received, tax, exempt status is not subject to this disclosure requirement until the IRS recognizes its tax-exempt status.

All versions of Form 990, Return of Organization Exempt from Income Tax, including any amendments, as well as any Form 1065 filed by the tax-exempt organization, are subject to these disclosure requirements. The disclosure requirements include all attachments and schedules, with the exception of the names and addresses of contributors disclosed in Form 990. Further, under Regs. Sec. 6104(d)-3(b)(4)(ii), Forms 990-T, Exempt Organization Business Income Tax Return, 1120-POL, U.S. Income Tax Return of Certain political...