Another reason to scour your 990 – IRS releasing 990s in machine readable format

In one of my last blog posts, I gave a brief mention of the IRS’ plans to make machine readable 990s available in the near future.  IRS speakers are now regularly saying at the national conferences that this will begin to happen on e-filed returns as early as January/February next year.  For those that still don’t believe that it is important that a 990 be accurate and well-prepared, let this be your final warning.

In early 2015, the case of v. United States Internal Revenue Service was the final straw that is bringing us machine readable,  (Modernized E-file, “MeF”) Forms 990. sued the IRS alleging that their refusal to release requested 990s in MeF format violated the requirements of the Freedom of Information Act.  The Court did not buy the IRS’ argument that, despite the fact that they already had the requested 990s in the MeF format, it was too expensive to redact the non-public data and provide them to the public.

One of the advantages to obtaining Form 990s in this format is that it makes it easier to study and review the data contained in the Form 990s (data about nonprofits’ operations).  Enterprising reporters, watchdog groups, and many others will be able to use the new format to more easily aggregate data about the sector – and potentially expose bad actors/behavior.  Organizations that are not already treating the 990 as a public relations document should perhaps rethink that position.

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