IRS Issues Proposed Regulations and Announces Penalty Relief to Allow Certain Section 501(c) Organizations to Continue to Omit Donor Names and Addresses from IRS Form 990, Schedule B Filings
As we previously reported
, this past summer a U.S. District Court judge in Montana invalidated the IRS’s 2018 rule that had eliminated the need for most 501(c) organizations to report the names and addresses of their large donors to the IRS. In response to that ruling, the IRS issued proposed regulations in September to address the Administrative Procedure Act rulemaking defect in the prior rule that was the focus of the District Court ruling. The IRS also issued a companion notice announcing penalty relief protection for nonprofit organizations other than Section 501(c)(3) and Section 527 Political Organizations that earlier this year omitted donor names and addresses from their IRS Form 990, Schedule B filings in reliance on Rev. Proc. 2018-38. This penalty relief also protects eligible calendar year organizations that are still on extension to file their 2018 returns. According to the penalty relief notice, the 2018 rule may be relied upon in preparing Forms 990 and 990-EZ for any taxable year ending on or after December 31, 2018 and on or prior to July 30, 2019. The proposed new regulations, if adopted, will continue this relief for organizations with later taxable years.