TBOR2 public disclosure requirements triggered.

• Author: Hall, Hank
• Position: Taxpayer Bill of Rights 2

The IRS has published much-anticipated final regulations under Sec. 6104(d), triggering broader public disclosure requirements for public charities and other organizations (other than private foundations) exempt from tex under Sec. 501(c) or (d). The regulations adopt, with substantial modifications, rules proposed in September 1997. (Forthcoming regulations will address disclosure by private foundations.)

The issuance of these regulations finally triggers the augmented public disclosure requirements enacted in the Taxpayer Bill of Rights 2 (TBOR2). The TBOR2 sets forth rules that exempt organizations (other than private foundations) must follow for both written and in-person requests for copies of their three most recent Forms 990, Return of Organization Exempt From Income Tax, and their exemption applications. However, these new requirements did not take effect until 60 days after publication of the final regulations. With the April 9, 1999 publication of final regulations, the effective date of the TBOR2 public disclosure requirements became June 8, 1999.

Additionally, TBOR2 increased the Sec. 6652 penalty for failure to allow public inspection or provide copies of an information return as required from $10 to $20 per day, with a $10,000 maximum. The penalty for failure to allow public inspection or provide copies of an exemption application as required was increased from $10 to $20 per day, with no maximum. Under these rules, the penalties apply to "any officer, director, trustee, employee, or other individual who is under a duty to allow inspection or provide copies."

Annual Returns, Exemption Application

Regs. Sec. 301.6104(d)-3(b)(4) provides that an exact copy of the three most recent annual returns and all information furnished to the IRS on Forms 990, 990EZ, Short Form Return of Organization Exempt From Income Tax, 990-BL, Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons, and 1065 must be provided. The definition of "exact copy" includes all schedules, attachments, supporting documents and compensation information (whether required by statute or by regulations), but excludes the name and address of any contributor to the organization. It is important to note that Form 990-T, Exempt Organization Business Income Tax Return, Form 1120-POL, U.S. Income Tax Return For Certain Political Organizations, Schedule A of Form 990-BL and Schedule K-1 of Form 1065 are not subject to public...