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IRS Updates, June 2007: Public Disclosure of IRS Form 990-T and Political Activities of Exempt Organizations

Note: The following discussion is provided for informational purposes only and is not intended to serve as legal or tax advice. For specific information about public disclosure of Form 990-T and political activities of exempt organizations, consult your attorney or tax adviser.
Last month, the IRS released interim guidance on public inspection of Form 990-T. Earlier this month, the service also published guidance on political activity by exempt organizations.

Public Disclosure of Form 990-T

Form 990-T, Exempt Organization Business Income Tax Return, is the form on which exempt organizations report and calculate the income tax owed on unrelated business income. The IRS defines unrelated business income as "income from a regularly-carried-on trade or business that is not substantially related to the organization's exempt purpose." See more information on unrelated business income >

Until last summer, Form 990-T was considered a tax return and was not open to public inspection. The Pension Protection Act of 2006, however, mandates that any IRS Form 990-T filed by a 501(c)(3) organization after August 17, 2006, is now a public document. The exception is a Form 990-T filed solely to request a refund of the telephone excise tax.

For 501(c)(3) organizations that filed Forms 990-T after August 17, 2006, these forms are now subject to the same disclosure requirements as annual information returns (Forms 990, 990-EZ, and 990-PF) and applications for exemption (Forms 1023 and 1024). Specifically, the return must be made available for inspection:

  • during regular business hours
  • by any individual
  • at a filing organization's principal office
  • and at any regional or district office having three or more employees
A nonprofit must respond immediately to in-person requests and to written requests within 30 days.

Form 990-T must be made available at no cost to the requestor, although an organization is allowed to charge a "reasonable fee" (currently $0.20 per page) for copying the return and to pass on mailing costs for sending it.

As is true with the 990 and applications for exemption, a nonprofit can comply with these requirements by posting its Form 990-T on its Web site, as long as the return is "in a format that exactly reproduces the image of the return as it was originally filed with the IRS after August 17, 2007, including all schedules, attachments, and supporting documents."

Churches that file Form 990-T are subject to these requirements, even if they do not file a Form 990 or 990-EZ. Some state colleges and universities must also comply with the new regulations; for more information, see pages 4-6 of the guidance >

The IRS has invited public comment on the implementation of these regulations. Comments must be submitted by June 30, 2007, and will be made available for public inspection and copying. Comments can be:

(1) mailed to:
Internal Revenue Service
CC:PA:LPD:PR (Notice 2007-45)
Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044
(2) hand-delivered to the IRS between 8 a.m. and 4 p.m., Monday through Friday:
Courier's Desk
Internal Revenue Service
1111 Constitution Ave., N.W.
Washington, DC 20224
Attn: CC:PA:LPD:PR (Notice 2007-45)

(3) e-mailed to Be sure to include "Notice 2007-45" in the subject line.

Political Activities of Exempt Organizations

Charities cannot support or oppose candidates for public office. Violating this rule can result in loss of tax-exempt status.

Some activities, such as voter registration drives, political debates, and voter education forums, are permissible, as long as they are conducted in a non-partisan manner. When engaged in such activities, charities must take care to ensure that they do so in an unbiased manner.

To help nonprofits remain on the right side of the law, the IRS has issued guidance on charities and political activities. The guidance presents 21 situations and notes which are permissible and which are not. Topics addressed range from voter education, voter registration, and get out the vote drives to candidate appearances to issue advocacy. Any charity considering any type of political activity should consult this document. Additional information is available in the "Jeopardizing Tax-Exempt Status" section of the tutorial.

Suzanne E. Coffman, June 2007
© 2007, Philanthropic Research, Inc. (GuideStar)

Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter.
Topics: Law and Regulations