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To Disclose or Not to Disclose

August 6, 2013 Posted by Jessica Shofler in Director Duties, IRS, News

If someone requests that your nonprofit disclose its exemption documents, must your organization comply? In general, yes. An exempt organization must make publicly available its last three annual returns and its IRS application for exemption.

Note, however, that an exempt organization, other than a private foundation, does NOT need to disclose the names and addresses of its contributors. And a nonprofit that has not yet been recognized as exempt by the IRS need not provide a copy of its exemption application.

If your organization believes that it is the subject of a harassment campaign via the request of many copies of annual returns and exemption application, contact us before deciding not to comply with a request. A director, officer, or other responsible individual who fails to provide required documents may be subject to a penalty of $20 per day. While there is a maximum penalty of $10,000 for each failure to provide an annual return, there is no maximum for the failure to provide a copy of the exemption application.

In addition, failing to disclose required documents upon request is grounds for revocation of an organization’s exempt status.

If your organization doesn’t have a copy of its exemption application, you can get one using  IRS Form 4506-A. Check out the IRS’ FAQs on public disclosure requirements for more information.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits, 4705 Laurel Canyon Blvd, #306, Studio City, CA 91607

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