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Schedule B, Schedule of Contributors, is required to be filed by public charities (and private foundations) if they report contribution revenue in excess of certain dollar amounts. Generally, contribution information, including the donor’s name and address, is required to be reported if any donor gave $5,000 or more during the year.
Although Schedule B is open to public disclosure, a donor’s name and address are not required to be disclosed by a public charity to the public. All other information is required to be made available unless it clearly identifies the contributor.
Many organizations also use their federal Form 990 and attachments to satisfy state reporting requirements. Unless specifically required, some organizations do not include Schedule B as an attachment on state return submissions to prevent the inadvertent release of donors’ personal information to the public.
In recent years, the requirement to file Schedule B has created controversy, primarily in the states. Both California and New York have previously required an unredacted copy of Schedule B if a charity wanted to solicit contributions in the state. Some charities have countered with the argument that providing this information to the states is a violation of free speech rights. As such, the requirement is unconstitutional. Until now, the courts have generally ruled in favor of the states.
On the federal front, three members of the House Oversight and Government Reform Committee have asked the IRS Acting Commissioner to provide the IRS’s plans for the use of information provided on Schedule B. The members specifically mentioned concerns about the donors’ privacy, especially if the information is inadvertently released to the public.
Additionally, the IRS TE/GE Advisory Committee has proposed that the IRS consider removing the requirement to file Schedule B. The advisory committee indicates more organizations will be inclined to file returns electronically if Schedule B is not required.
At present, Schedule B is required to be submitted if the organization meets the filing requirements for the form. However, parties involved in providing the information needed to complete the schedule should monitor developments.
For more information, contact your Marvin and Company, P.C. representative.