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In June 2016, the IRS announced (IR-2016-87) that electronically filed Forms 990, Return of Organization Exempt From Income Tax, are now available in a digitally readable XML file that can be downloaded through Amazon Web Services (AWS), and specifically Amazon Simple Storage Service (Amazon S3). The available data includes Form 990, Form 990-EZ and Form 990-PF and related schedules from 2011 to present with the exception of certain donor information and personally identifiable information. Data from Form 990-N (e-postcard) filed by smaller organizations will not be available from AWS, but is available through the IRS's website.

Background

Form 990 data has historically been available digitally only as image files, or in PDF format. In early 2015, Public.Resource.Org sued under the Freedom of Information Act, requesting that the IRS release nine Forms 990 in modernized e-file format. The IRS initially declined to comply, asserting that the administrative burden would be too great. In January 2015, a district court rejected that argument and ordered the IRS to make the information available. In response to the court decision, the IRS announced its intention to begin making data available in machine-readable format. (See Tax Alert 2015-1316 {}for background.) Until now, the IRS had not disclosed any details on the technology it would use to convert the data into a user-friendly format.

Announcement

More than 60% of all Form 990 returns are electronically filed with the IRS, and more than 1.4m records dating back to 2011 will now be available electronically for users to search and sort data. The IRS has committed to updating the digital information on a monthly basis while also continuing to create image files out of both paper and e-filed 990 returns, as well as making the information available by DVD.

Implications

Tax-exempt organizations must make annual returns (e.g., Form 990 series) filed with the IRS available for public inspection and copying upon request. In addition, the IRS makes these documents available to the public in paper form without charge (if a Form 4506, Request for Copy of Tax Return, is filed) or alternatively in electronic format (DVD) for a fee. The public availability of an exempt organization's annual return is of interest to those in the tax-exempt community as well as to donors. In the past, the information was only available as image files and could not be easily manipulated to extract data and compare against that of other similar organizations.

By having 990 data available in machine readable format, taxpayers and third party data providers can more easily build applications that would allow the public to search for and sort specific categories of information about individual nonprofits or the entire nonprofit sector, such as the percentage of a charity's expenditure for charitable giving versus administration and fundraising, or the collective impact of tax-exempt hospitals' community benefit spending for a particular region. The use of the data is virtually unlimited. It is important to note the information will be released as raw XML data, which can then be integrated into searchable databases by third-party search engine or data mining applications, but in its raw form may not be usable for most members of the public.

Please contact your EY Professional for additional information.

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RELATED RESOURCES

— For more information about EY's Exempt Organization Tax Services group, visit us at www.ey.com/ExemptOrg.

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