Publication 557 |
2001 Tax Year |
Public Inspection of Exemption Applications, Annual Returns, & Political Organization Reporting Forms
The following rules apply to private foundations as well as other
tax-exempt organizations. Private foundations filing annual returns on
or after March 13, 2000, are subject to the public disclosure
requirements under section 6104(d) of the Internal Revenue Code.
Included in this section is a discussion on the public inspection
requirements for political organizations filing Forms 8871 and 8872.
Annual return.
An exempt organization must make available for public inspection,
upon request and without charge, a copy of its original and amended
annual information returns. Each information return must be made
available from the date it is required to be filed (determined without
regard to any extensions), or is actually filed, whichever is later.
An original return does not have to be made available if more than 3
years have passed from the date the return was required to be filed
(including any extensions) or was filed, whichever is later. An
amended return does not have to be made available if more than 3 years
have passed from the date it was filed.
An annual information return includes an exact copy of the return
(Form 990, 990-EZ, 990-BL, 990-PF, or 1065), and
amended return if any, and all schedules, attachments, and supporting
documents filed with the IRS. It does not include Schedule A of Form
990-BL, Form 990-T, Schedule K-1 of Form 1065, or
Form 1120-POL. In the case of a tax-exempt organization other
than a private foundation, an annual information return does not
include the names and addresses of contributors to the organization.
Exemption application.
An exempt organization must also make available for public
inspection without charge its application for tax-exempt status. An
application for tax exemption includes the application form (such as
Form 1023 or 1024), all documents and statements the IRS requires the
organization to file with the form, any statement or other supporting
document submitted by an organization in support of its application,
and any letter or other document issued by the IRS concerning the
application.It does not include:
- Any application from an organization that is not yet
recognized as exempt,
- Any material that is required to be withheld from public
inspection, see Material required to be withheld from public
inspection, next,
- In the case of a tax-exempt organization other than a
private foundation, the names and addresses of contributors to the
organization, or
- Any applications filed before July 15, 1987, if the
organization did not have a copy of the application on July 15,
1987.
If there is no prescribed application form, see section
301.6104(d)-1(b)(3)(ii) of the regulations for a list of the
documents that must be made available.
Material required to be withheld from public inspection.
Material that is required to be withheld from public inspection
includes:
- Trade secrets, patents, processes, styles of work, or
apparatus for which withholding was requested and granted,
- National defense material,
- Unfavorable rulings or determination letters issued in
response to applications for tax exemption,
- Rulings or determination letters revoking or modifying a
favorable determination letter,
- Technical advice memoranda relating to a disapproved
application for tax exemption or the revocation or modification of a
favorable determination letter,
- Any letter or document filed with or issued by the IRS
relating to whether a proposed or accomplished transaction is a
prohibited transaction under section 503,
- Any letter or document filed with or issued by the IRS
relating to an organization's status as an organization described in
section 509(a) or 4942(j)(3), unless the letter or document relates to
the organization's application for tax exemption, and
- Any other letter or document filed with or issued by the IRS
which, although it relates to an organization's tax-exempt status as
an organization described in section 501(c) or 501(d), does not relate
to that organization's application for tax exemption.
Time, place, and manner restrictions.
The annual returns and exemption application must be made available
for inspection, without charge, at the organization's principal,
regional, and district offices during regular business hours. The
organization may have an employee present during inspection, but must
allow the individual to take notes freely and to photocopy at no
charge if the individual provides the photocopying equipment.
Generally, regional and district offices are those that have paid
employees who together are normally paid at least 120 hours a week.
If the organization does not maintain a permanent office, it must
make its application for tax exemption and its annual information
returns available for inspection at a reasonable location of its
choice. It must permit public inspection within a reasonable amount of
time after receiving a request for inspection (normally not more than
2 weeks) and at a reasonable time of day. At its option, it may mail,
within 2 weeks of receiving the request, a copy of its application for
tax exemption and annual information returns to the requester in lieu
of allowing an inspection. The organization may charge the requester
for copying and actual postage costs only if the requester consents to
the charge.
An organization that has a permanent office, but has no office
hours or very limited hours during certain times of the year, must
make its documents available during those periods when office hours
are limited or not available as though it were an organization without
a permanent office.
Furnishing copies.
An exempt organization also must provide a copy of all, or any
specific part or schedule, of its three most recent annual information
returns and/or exemption application to anyone who requests a copy
either in person or in writing at its principal, regional or district
office during regular business hours. If the individual made the
request in person, the copy must be provided on the same business day
the request is made unless there are unusual circumstances. Unusual
circumstances are defined in section 301.6104(d)-1(d)(1)(ii) of
the regulations.
The organization must honor a written request for a copy of
documents or specific parts or schedules of documents that are
required to be disclosed. However, this rule only applies if the
request:
- Is addressed to the exempt organization's principal,
regional, or district office,
- Is sent to that address by mail, electronic mail (e-mail),
facsimile (fax), or a private delivery service approved by the IRS,
and
- Gives the address to where the copy of the document should
be sent.
The organization must mail the copy within 30 days from the date it
receives the request. The organization may request payment in advance
and must then provide the copies within 30 days from the date it
receives payment.
Fees for copies.
The organization may charge a reasonable fee for providing copies.
It can charge no more for the copies than the per page rate the IRS
charges for providing copies. That rate is stated in section
601.702(f)(5)(iv)(B) of the regulations. (As of June 2001, the rate
was $1.00 for the first page and 15 cents for each additional page.)
The organization can also charge the actual postage costs it pays to
provide the copies.
Regional and district offices.
Generally, the same rules regarding public inspection and providing
copies of applications and annual returns that apply to a principal
office of an exempt organization also apply to its regional and
district offices. However, a regional or district office is not
required to make its annual information return available for
inspection or to provide copies until 30 days after the date the
return is required to be filed (including any extensions) or is
actually filed, whichever is later.
Local and subordinate organizations.
A local or subordinate organization is an exempt organization that
did not file its own application for tax exemption because it is
covered by a group exemption letter. Generally, a local or subordinate
organization of an exempt organization must, upon request, make
available for public inspection, or provide copies of:
- The application submitted to the IRS by the central or
parent organization to obtain the group exemption letter, and
- Those documents which were submitted by the central or
parent organization to include the local or subordinate organization
in the group exemption letter.
However, if the central or parent organization submits to the
IRS a list or directory of local or subordinate organizations covered
by the group exemption letter, the local or subordinate organization
is required to provide only the application for the group exemption
ruling and the pages of the list or directory that specifically refer
to it.
The local or subordinate organization must permit public inspection
or comply with a request for copies made in person, within a
reasonable amount of time (normally not more than 2 weeks) after
receiving a request made in person for public inspection or copies and
at a reasonable time of day. In lieu of allowing an inspection, the
local or subordinate organization may mail a copy of the applicable
documents to the person requesting inspection within the same time
period. In that case, the organization may charge the requester for
copying and actual postage costs only if the requester consents to the
charge. If the local or subordinate organization receives a written
request for a copy of its application for exemption, it must fulfill
the request in the time and manner specified earlier.
The requester has the option of requesting from the central or
parent organization, at its principal office, inspection or copies of
the application for group exemption and the material submitted by the
central or parent organization to include a local or subordinate
organization in the group ruling. If the central or parent
organization submits to the IRS a list or directory of local or
subordinate organizations covered by the group exemption letter, it
must make the list or directory available for public inspection, but
it is required to provide copies only of those pages of the list or
directory that refer to particular local or subordinate organizations
specified by the requester. The central or parent organization must
fulfill such requests in the time and manner specified earlier.
A local or subordinate organization that does not file its own
annual information return (because it is affiliated with a central or
parent organization that files a group return) must, upon request,
make available for public inspection, or provide copies of, the group
returns filed by the central or parent organization. However, if the
group return includes separate schedules for each local or subordinate
organization included in the group return, the local or subordinate
organization receiving the request may omit any schedules relating
only to other organizations included in the group return. The local or
subordinate organization must permit public inspection, or comply with
a request for copies made in person, within a reasonable amount of
time (normally not more than 2 weeks) after receiving a request made
in person for public inspection or copies and at a reasonable time of
day.
In lieu of allowing an inspection, the local or subordinate
organization may mail a copy of the applicable documents to the person
requesting inspection within the same time period. In this case, the
organization can charge the requester for copying and actual postage
costs only if the requester consents to the charge. If the local or
subordinate organization receives a written request for a copy of its
annual information return, it must fulfill the request by providing a
copy of the group return in the time and manner specified earlier. The
requester has the option of requesting from the central or parent
organization, at its principal office, inspection or copies of group
returns filed by the central or parent organization. The central or
parent organization must fulfill such requests in the time and manner
specified earlier.
If an organization fails to comply, it may be liable for a penalty.
See Penalties, later.
Making applications and returns widely available.
An exempt organization does not have to comply with requests for
copies of its annual returns or exemption application if it makes them
widely available. However, making these documents widely available
does not relieve the organization from making its documents available
for public inspection.
The organization can make its application and returns widely
available by posting the application and returns on a World Wide Web
page. For the rules to follow so that the Internet posting will be
considered widely available, see section 301.6104(d)-2(b) of the
regulations.
If the organization has made its application for tax exemption
and/or annual returns widely available, it must inform any individual
requesting a copy where the documents are available, including the
address on the World Wide Web, if applicable. If the request is made
in person, the notice must be provided immediately. If the request is
made in writing, the notice must be provided within 7 days.
Harassment campaign.
If the tax-exempt organization is the subject of a harassment
campaign, the organization may not have to fulfill requests for
information. For more information, see section 301.6104(d)-3 of
the regulations.
Political organization reporting forms.
Forms 8871 and 8872 (discussed earlier under Reporting
Requirements for a Political Organization) are open to public
inspection.
Form 8871.
Form 8871 (including any supporting papers) and any letter or other
document the IRS issues with regard to Form 8871 is open to public
inspection at the IRS in Washington, DC. Copies of Form 8871 that have
been filed are available at the IRS Internet web site and are
considered widely available as long as the organization provides the
IRS web site address to the person making the request. In addition,
the organization must make a copy of these materials available for
public inspection during regular business hours at the organization's
principal office and at each of its regional or district offices
having at least 3 paid employees.
Form 8872.
Form 8872 (including Schedules A and B) is open to public
inspection. Copies of Form 8872 that have been filed are available at
the IRS web site and are considered widely available as long as the
organization provides the IRS web site address to the person making
the request. In addition, the organization is required to make a copy
of this form available for public inspection during regular business
hours at the organization's principal office and at each of its
regional or district offices having at least 3 paid employees.
Penalties.
The penalty for failure to allow public inspection of annual
returns is $20 for each day the failure continues. The maximum penalty
on all persons for failures involving any one return is $10,000.
The penalty for failure to allow public inspection of exemption
applications is $20 for each day the failure continues.
The penalty for willful failure to allow public inspection of a
return or exemption application is $5,000 for each return or
application. The penalty also applies to a willful failure to provide
copies.
The penalty for failure to allow public inspection of a political
organization's section 527 notice (Form 8871) is $20 for each day the
failure continues.
The penalty for failure to allow public inspection of a section 527
organization's contributions and expenditures report (Form 8872) is
$20 for each day the failure continues. The maximum penalty on all
persons for failures involving any one report is $10,000.
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