We wanted to make you all aware that there has been something strange happening with public displays of the nation’s nonprofit Form 990s.
In 2020, the Internal Revenue Service (IRS) went to an electronic filing of the Form 990 required to be filed in some form by most nonprofits (e.g.: 990, 990N, 990EZ). Since starting this requirement, the IRS has been behind on sharing 990s on its own website for the tax year ending 12/31/22. Their late postings aren’t particularly surprising but there appears to be a problem with the way the IRS is sharing this data with third party transparency sites like GuideStar/Candid, ProPublica, etc. through a contract relationship.
Last week, NAO’s audit firm brought to our attention that most of these public sites have Form 990s displayed that are incorrect. We can use ourselves as the example. We have a calendar year fiscal year.
Here is NAO’s 990 as displayed on Candid – Nonprofit Association of Oregon | Candid
Here is our real 990 displayed on our website taken from our tax documents as filed with the IRS. NAO 2022 Form 990
You can see that the numbers in both documents are identical, but what is displayed on the Candid site says it is our 2021 filing, not our 2022 filing. The data for 2022 has been superimposed into the 2021 forms. To be clear, this is not just a problem for NAO, it is a sweeping issue across almost all nonprofits 990s being displayed on these sites.
Over on ProPublica they are showing our 2022 return on a 2021 Form 990. The top of the form says 2022 and the numbers are correct for 2022, but the bottom of the pages clearly indicates they have actually uploaded this into the 2021 forms and somehow altered the date at the top.
While overlaying the 2022 data on to the 2021 form may not seem like too big a deal, we are already noticing places where there were changes in the form between years and the data doesn’t transfer correctly. (We have found a schedule “C” where the nonprofit’s information was missing, likely due to this problem).
As you can understand, having this information provided publicly displayed incorrectly is incredibly damaging when banks, foundations, tax and wealth advisors, as well as individuals deciding their donation and tax strategies go to these sites expecting to see transparent and correct information (provided by the IRS) but may be led to different decisions in their giving due to these incorrect displays. It is also clear this error is causing harm and confusion even within the government. This issue first surfaced to us yesterday when our auditor had a different client with a federally funded loan and the agency accused her nonprofit client of failing to file their 2022 return because: 1) it wasn’t yet on the IRS website; and 2) there is an error in having two 2021 returns on GuideStar. Government agencies making decisions on programs and loans with altered tax documents is not good at all.
Since we first discovered this issue, we have reached out to the IRS and both Pro Publica and GuideStar/Candid. We could not get through to the IRS. ProPublica and Candid were both very responsive and indicated that the issue stems from the way the IRS sends the data to them. They are asking for a fix from the IRS. We alerted our partners at the National Council of Nonprofits and Independent Sector. We have also contacted several CPA firms to make them aware and they put us in touch with the Oregon Society of CPAs (OSCPA). We have also brought this to the attention of the Oregon Department of Justice Charitable Affairs Section who has contacted the National Association of State Charities Officials (NASCO). We also lodged an inquiry with Senator Wyden’s staff and staff on Senate Finance Committee handling tax policy. All of these entities jumped in to advocate for a quick fix.
The latest information as of Feb 21st is that the IRS is now being responsive to this issue and will be providing to the sites the corrected forms. It will take a week or two for the fixes to roll through the systems, but we have a direct line to the transparency sites, and they have assured us they will keep us updated on the situation.
We encourage all nonprofit to check their 990 on these public sites and look for those changes as they begin to roll out in the coming weeks. If a funder, bank or government agency wants your 2022 990, we suggest that you send it to them directly.