Push for Electronic Filing, Readability of 990s Picking Up Steam

An Internal Revenue Service advisory panel recently pressed the agency to require all nonprofits to file their requisite Form 990 electronically, as well as to simplify the Form 990. The panel noted that the data collected by the IRS can provide insight and analysis that is not readily available elsewhere, and that the vast majority of nonprofits do not view mandatory electronic filing as a burden.

Tamera Ripperda, director of the IRS Exempt Organizations office, told the panel that because large nonprofits are required to file electronically and the 990-N used by the smallest charities is always filed that way, “we’re missing out on a lot of digitized data in the middle.”

On a related note, the IRS recently also has faced increasing pressure to make Form 990 filings available in a machine-readable format, which makes it easier for researchers, donors, nonprofit leaders and others to search, aggregate and otherwise analyze information from the forms. The IRS currently converts all 990 filings to unsearchable image files.

Earlier this summer, the IRS delivered electronic filings from nine nonprofits to open-records activist Carl Malamud—a federal judge had ordered the agency to make the data available. Malamud has been pressing for electronic filing and searchability of filings in order to make it easier for people to access information on nonprofit finances, salaries, lobbying and other activities.

Some at the IRS have expressed concern about cost and resources associated with any change to the Form 990. IRS Commissioner John Koskinen pointed out that such changes could be a drain on IRS staff time and resources.

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