ProPublica, a nonprofit newsroom that investigates abuses of power, published a report in December alleging that the IRS is behind on releasing data for tax-exempt organizations.
ProPublica performed a review of public IRS data and determined that nearly half a million FORM 990’s have not been released. Long seen as a charity regulation and donor evaluation tool, this backlog can affect the entire sector.
Cumulative industry data reports for 2020 and 2021 will be incomplete and the sector will not have a full picture of how it fared during the pandemic and subsequent economic challenges.
The House of Representatives voted yesterday to rescind funding for 87,000 IRS employees needed to fill vacancies and a retiring workforce over the next ten years. While this bill will likely be rejected by the Senate, the IRS has a number of well-documented issues it’s battling including this one.
One thing nonprofit organizations can do is to not relay on third-party websites such as Charity Navigator and Guide Star to publish their financial data for the public. Self-publishing audits and IRS 990’s is an industry best practice.