Charitable 501(C)(3) Organizations Must Meet Inspection & Disclosure Requirements

Charitable organizations enjoy significant benefits, such as receiving tax-deductible contributions and not having to pay taxes on income. In return, Congress allows the public to inspect documents that these organizations file with the IRS. Below are some items an exempt organization must make available for public inspection.

Exemption Application

An exempt organization must make available for public inspection its exemption application. An exemption application includes the IRS Form 1023 (for organizations recognized as exempt under Internal Revenue Code section 501(c)(3)), IRS Form 1024 (for organizations recognized as exempt under most other paragraphs of section 501(c)), or the letter submitted under the paragraphs for which no form is prescribed, together with supporting documents and any letter or document issued by the IRS concerning the application. A political organization exempt from taxation under Code section 527(a) must make available for public inspection and copying its notice of status, Form 8871.

Annual Return

An exempt organization must make available for public inspection and copying its annual return. Such returns include Form 990, Return of Organization Exempt From Income Tax, Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, Form 990-PF, Return of Private Foundation, Form 990-BL, Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons, and the Form 1065, U.S. Partnership Return of Income. A section 501(c)(3) organization must also make available for public inspection and copying any Form 990-T, Exempt Organization Business Income Tax Return, filed after August 17, 2006. Returns must be available for a three-year period beginning with the due date of the return (including any extension of time for filing). For this purpose, the return includes any schedules, attachments, or supporting documents that relate to the imposition of tax on the unrelated business income of the charity.

An exempt organization is not required to disclose Schedule K-1 of Form 1065 or Schedule A of Form 990-BL. With the exception of private foundations, an exempt organization is not required to disclose the name and address of any contributor to the organization.

Report of Contributions and Expenditures

A political organization exempt from taxation under section 527(a) must make available for inspection and copying its report of contributions and expenditures on Form 8872, Political Organization Report of Contributions and Expenditures. However, such an organization is not required to make available its return on Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.

Materials to Keep on Hand

An exempt organization should have a binder on hand at its principal place of business containing the following materials: i) IRS Form 1023 (or Form 1024) exemption application, including all supporting documents and any additional correspondence to and from the IRS regarding the exemption application, ii) the organization's IRS determination letter, and iii) the organization's three (3) most recent information returns. We recommend labeling the binder as "Public Inspection Binder," so it is easily located by staff.

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