Letter to Chairman Baucus, Senate Finance Committee

Friday, January 17, 2014

Senator Baucus released tax reform discussion drafts in 2013, including the tax administration draft, which proposes requiring all tax-exempt organizations to electronically file their Form 990s.

As part of the discussion draft process, stakeholders are invited to submit comments. The Council commented on this mandatory e-filing provision. We generally support the proposal, but encourage Senator Baucus and the Senate Finance Committee to further explore the impact of mandatory e-filing on smaller organizations and private foundations with lengthy filing requirements. We also urge the Senator to assess whether the utility of machine-readable 990 data justifies the potential burden on nonprofit organizations. In our comments, the Council’s Senior Vice President for Public Policy and Legal Affairs Sue Santa asks the Committee to “consider an appropriate phase-in period, especially for organizations that may have a more difficult time transitioning to this new protocol.” She also urges them to consider how “new guidance and tools that might be developed in the field to assist smaller organizations, much like the user-friendly tools that have been developed for individual taxpayers.”