Advocate pushes IRS on nonprofits’ tax forms
Carl Malamud is on a transparency crusade against the Internal Revenue Service.
His objective: Get the IRS to release a full database of nonprofit tax Form 990s — records deemed open to public inspection by law — in the digitally searchable formats in which the federal agency receives them.
The move could spur meaningful analysis and policing of the rapidly growing tax-exempt sector, which handles billions of dollars and accounts for more than 10 percent of non-government jobs in the United States and nearly 16 percent in Pennsylvania.
Malamud, a public domain advocate who runs Public.Resource.org in Northern California, won a precedent-setting victory in late January when a U.S. District judge ruled the IRS had to comply with his request for machine-readable 990s from nine nonprofit organizations. He finally received them three weeks ago — nearly two years after he filed the initial lawsuit.
Now, Malamud wants to take the open-records push further to benefit the broader public, with help from a group of news organizations and nonprofit executives and board members who also want to increase the accessibility and searchability of the forms.
The Tribune-Review last week joined the Washington Post, Pro Publica, BuzzFeed, Chronicle of Philanthropy and Chronicle of Higher Education in filing a series of Freedom of Information Act requests. Each asks for digitally searchable forms for a group of nonprofits relevant to the organization’s reporting or research.
Nonprofit officials plan to request their own organizations’ returns in e-filed format.
“My goal is pretty simple,” said Malamud, who dubbed the effort “FOIA Campaign to Free the Form 990.”
He said, “If enough organizations submit FOIA requests, I think the IRS will simply release the full database.”
In a statement Friday, the IRS said, “This is a priority for the IRS, and we are making progress in this area. We anticipate announcing additional details on our progress dealing with machine readable formats given our resource limitations in the near future.”
The National Association of State Charity Officials lauds nonprofit e-filing as a way to help root out fraud. Investigators could, for example, pull up a query on every nonprofit that gave a CEO a loan, or more easily flag a nonprofit executive concealing perks for family members across several charities.
“Releasing the e-file data would be an instant hit and would be used by state law enforcement officials, good-giving guides and Silicon Valley companies such as LinkedIn and Google,” Malamud said.
About half of 990 Forms filed with the IRS are submitted by tax-exempt organizations online in digitally searchable formats, but the IRS takes a snapshot and releases the records to the public only as image (.tif) files.
That destroys the searchable metadata, treating the forms as if they were submitted on paper. The procedure makes it difficult to search for words and phrases or to identify aggregate trends without manually inputting information found on millions of pages.
Malamud was responsible for getting Securities and Exchange Commission data online in 1993. He compared the value of a Form 990 database to the SEC’s EDGAR database, “which makes our financial markets more efficient and transparent.”
GuideStar.org posts 990 Forms from recent years free to users with online accounts, but the forms are in non-searchable PDF files and tend to be one to two years behind.
The IRS charges individuals $2,300 to obtain a CD or DVD with a complete set of non-machine-readable 990s filed monthly between 2008 and 2014, or $100 for a set of returns filed quarterly in a particular state. News organizations can request fees be waived on the basis the disclosure is in the public interest.
Natasha Lindstrom is a staff writer for Trib Total Media. She can be reached at 412-380-8514 or email@example.com.
Natasha Lindstrom is a Tribune-Review staff reporter. You can contact Natasha at 412-380-8514, firstname.lastname@example.org or via Twitter .