Final Treasury Regulations Address IRS Form 990 Schedule B Donor Disclosure Requirements
by Gabrielle Mercurio and John C. Peiffer
- Prior IRS regulations required most exempt organizations to disclose the names and addresses of contributors who donated more than $5,000 (“substantial contributors”) on the Schedule B addendum to the organization’s IRS Form 990.
- Under new IRS regulations, only organizations exempt under Internal Revenue Code § 501(c)(3) or § 527 must include names and addresses of substantial contributors on Schedule B.
- However, all exempt organizations that file Form 990 must continue to maintain internal records of donor-identifying information, especially substantial contributor information, and must make it available to the IRS upon request.
- The IRS’s policy reasoning for the new regulations was (1) prevention of inadvertent disclosure of private donor information and (2) reduction of exempt organizations’ compliance burdens.
Form 990 Schedule B
Internal Revenue Code (“IRC”) § 6033 requires most tax-exempt organizations, including organizations exempt under Internal Revenue Code (“IRC”) 501(c)(3) as well as lesser known code sections such as 501(c)(7) and 501(c)(8), to file an annual information report called Form 990, Return of Organization Exempt From Income Tax. Certain religious organizations, such as churches and some religious orders, are exempted from the filing requirement. The IRS Form 990 provides the IRS with financial and managerial information about the filing organization to help the IRS determine whether the organization continues to qualify for tax-exemption.
Under IRC § 6104, the IRS must make copies of every filed Form 990 publicly available. Additionally, under IRC § 6104(c), the IRS must provide copies of organizations’ Form 990 to state officials for specific purposes, including the enforcement of the state’s tax code and charitable solicitations laws.
The IRS Form 990 has several addenda, including the Schedule B. In the past, under 26 CFR § 1.6033-2 (a)(2)(ii)(F), the filing organization had to list the amount of each “substantial contribution” (donation of more than $5,000) as well as the names and addresses of the donor for each substantial contribution.  After the filing organization submitted its form, the IRS would redact donor-identifying information from Schedule B and then make the redacted IRS Form 990 publicly available.
New Regulations Alter Reporting Requirements on Schedule B
Under the IRS’s Final Treasury Regulations, effective May 28, 2020, 501(c)(3)s and 527s must continue to report names and addresses of substantial contributors on Schedule B. However, other exempt organizations, including 501(c)(4) organizations, no longer must provide the names and addresses of donors, except upon request from the IRS, although they must continue to report contribution amounts over $5,000. Even if the filing organization is not required to report the names of substantial contributors, the organization must maintain records of such information and make it available to the IRS upon request.
The new regulations solidify the IRS’s attempts to relieve certain organizations from reporting donor-identifying information. On July 16, 2018, the IRS released Revenue Procedure 2018-38, the IRS’s first attempt to remove the requirement for tax-exempt organizations (other than 501(c)(3)s or 527s) to report donor information on Schedule B. However, on July 30, 2018, in Bullock v. IRS, a federal court set aside the guidance for failing to meet the Administrative Procedure Act (“APA”)’s notice and comment requirements. The final Treasury Regulations issued in 2020 are a result of the guidance receiving appropriate opportunity for public notice and comment pursuant to the APA.
In its final rule, the IRS stated that it possesses “broad discretion”  under IRC § 6033 to determine that it “does not need the names and addresses of substantial contributors to tax-exempt organizations [not 503(c)(3) or 527] to be reported annually on Schedule B […] in order to administer the internal revenue laws.”  In making the final Treasury Regulations, the IRS was largely concerned with “inefficiencies involved in collecting, maintaining, and redacting this [donor-identifying] information if reported annually.”  The IRS noted that the final regulations would minimize the risk of inadvertent public disclosure of donor identifying information, which would address concerns over donor privacy. Moreover, the IRS asserted that the new regulations will reduce costs with respect to federal tax compliance. The IRS concluded that it can obtain the donor names and addresses from organizations upon examination when necessary.
In conclusion, under the IRS’s new regulations, exempt organizations, except those exempt under IRC § 501(c)(3) or 527, must report amounts greater than $5,000 on Schedule B but need not include any donor-identifying information. These organizations may rely on the final regulations when completing their Form 990 if they have not yet filed by the extended deadline of July 15, 2020. Though names and addresses need not be reported on Form 990, organizations should comply with any other state rules or regulations regarding donor disclosure. Organizations should also maintain records of such information in the event of an examination by the IRS.
 Note, however, that, under 26 CFR § 1.6033-2(a)(2)(iii)(A), “An organization described in section 501(c)(3) which meets the 33 1/3 percent-of-support test of the regulations under section 170(b)(1)(A)(vi) (without regard to whether such organization otherwise qualifies as an organization described in section 170(b)(1)(A)) is required to provide the name and address of a person who contributed, bequeathed, or devised $5,000 or more during the year only if his amount is in excess of 2 percent of the total contributions, bequests and devises received by the organization during the year.”
 Note that, under 26 CFR § 1.6033-2(a)(2)(iii)(D)(1), “Organizations described in section 501(c)(7), (8), or (10) that receive contributions or bequests to be used exclusively for purposes described in section 170(c)(4), 2055(a)(3), or 2522(a)(3), must attach a schedule with respect to all gifts that aggregate more than $1,000 from any one person showing the total amount of the contributions or bequests from each such person, the specific purpose or purposes for which such amount was received, and the specific use or uses to which such amount was put.”
 Guidance Under Section 6033 Regarding the Reporting Requirements of Exempt Organizations. 85 Fed. Reg. 31959, 31961 (May 28,2020).
 Id at 31963.
Gabrielle Mercurio is a second-year law student at Notre Dame Law School, where she was awarded the Church, State & Society Fellowship to work with the Napa Legal Institute this summer. She graduated in 2016 from the University of Notre Dame with a BA in Psychology. Prior to law school, she worked for three years for Notre Dame's Division of Auxiliary Operations, where she collaborated with the Division's Human Resources Consultant to promote and manage employee relations.Currently at Notre Dame Law, she serves as the President of the Food and Beverage Law Club as well as the Treasurer for the Asian Law Students Association.
John serves as President and General Counsel of NLI. He is also CEO of the Busch Firm. John advises for-profit and nonprofit clients on business transactions, entity structures, and corporate formation and governance. He has advised Catholic dioceses, religious orders, private religious schools, and other religious organizations on mission-focused corporate structuring and governance,tax compliance issues, and charitable planning structures. John obtained a B.A. in Classical Studies and English from Santa Clara University, an A.M. in Religious Studies from the University of Chicago Divinity School, and a J.D. from the University of Notre Dame Law School.