[Federal Register Volume 85, Number 103 (Thursday, May 28, 2020)]
[Rules and Regulations]
[Pages 31959-31969]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11465]



[[Page 31959]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1 and 56

[TD 9898]
RIN 1545-BN28


Guidance Under Section 6033 Regarding the Reporting Requirements 
of Exempt Organizations

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulation.

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SUMMARY: This document contains final regulations updating information 
reporting regulations under section 6033 that are generally applicable 
to organizations exempt from tax under section 501(a) to reflect 
statutory amendments and certain grants of reporting relief for tax-
exempt organizations required to file an annual Form 990 or 990-EZ 
information return that have been made since the previous regulations 
were adopted. The final regulations affect tax-exempt organizations.

DATES: 
    Effective date: The final regulations contained in this document 
are effective on May 28, 2020.
    Applicability date: For dates of applicability, see Sec.  1.6033-
2(l)(2).

FOR FURTHER INFORMATION CONTACT: Office of the Associate Chief Counsel 
(Employee Benefits, Exempt Organizations, and Employment Taxes) at 
(202) 317-3150 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    Subject to various exceptions, section 6033(a)(1) of the Internal 
Revenue Code (Code) requires every organization exempt from taxation 
under section 501(a) (tax-exempt organization) to file an annual 
return, stating specifically the items of gross income, receipts, and 
disbursements, and such other information for the purpose of carrying 
out the internal revenue laws as the Secretary of the Treasury or his 
delegate (Secretary) may by forms or regulations prescribe, and keep 
such records, render under oath such statements, make such other 
returns, and comply with such rules and regulations as the Secretary 
may from time to time prescribe. This requirement also applies to 
certain political organizations described in section 527(e)(1) (section 
527 organizations). The annual information returns required under 
section 6033 are Forms 990, ``Return of Organization Exempt From Income 
Tax;'' 990-EZ, ``Short Form Return of Organization Exempt From Income 
Tax;'' 990-PF, ``Return of Private Foundation;'' and 990-BL, 
``Information and Initial Excise Tax Return for Black Lung Benefit 
Trusts and Certain Related Persons.'' Annual returns filed by tax-
exempt organizations, section 527 organizations, nonexempt private 
foundations described in section 6033(d), and section 4947(a)(1) trusts 
(which are both treated as organizations described in section 501(c)(3) 
for this purpose) are information returns intended to help ensure that 
the filing organizations comply with applicable federal tax laws. Most 
information on these annual returns is available for public inspection 
under section 6104.
    Section 6033(a)(3) provides a list of organizations that are 
excepted from the filing requirements imposed under section 6033(a)(1). 
Specifically, section 6033(a)(3)(A)(ii) provides that section 
6033(a)(1) shall not apply to any organization (other than a private 
foundation) that is described in section 6033(a)(3)(C) whose gross 
receipts are not normally more than $5,000 annually. The list of 
organizations provided in section 6033(a)(3)(C) includes certain 
fraternal beneficiary societies, orders or associations described in 
section 501(c)(8); certain organizations described in section 501(c)(3) 
(such as religious organizations and educational organizations 
described in section 170(b)(1)(A)(ii)); and organizations described in 
section 501(c)(1) that are corporations wholly owned by the United 
States or any agency or instrumentality thereof or wholly-owned 
subsidiaries of such corporations.
    Section 6033(a)(3)(B) provides discretionary authority to the 
Secretary to relieve any organization required to file under section 
6033(a)(1) (other than supporting organizations described in section 
509(a)(3)) from filing an information return where he determines that 
such filing is ``not necessary to the efficient administration of the 
internal revenue laws.''
    Section 6033(b) provides a list of items that are generally 
required to be furnished annually by organizations described in section 
501(c)(3), ``at such time and in such manner as the Secretary may by 
forms or regulations prescribe.'' The statutory list of items generally 
required to be furnished annually has been amended by Congress from 
time to time to account for additional requirements of organizations 
described in section 501(c)(3). For example, section 6033(b) was 
updated by the Taxpayer Bill of Rights 2, Public Law 104-168, in 1996 
to include items in sections 6033(b)(10) (relating to taxes imposed on 
certain lobbying and political expenditures by organizations described 
in section 501(c)(3)) and 6033(b)(11) (relating to taxes imposed with 
respect to an organization, an organization manager, or any 
disqualified person under section 4958).
    Section 6033(g) provides that a section 527 organization that has 
gross receipts of $25,000 or more for a taxable year \1\ shall file an 
annual return containing the information required by section 6033(a)(1) 
for organizations exempt from taxation under section 501(a). The 
statute authorizes the Secretary to modify the information required to 
be reported to require only information that is necessary for purposes 
of carrying out section 527 and such other information as the Secretary 
deems necessary to carry out the provisions of section 6033(g).
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    \1\ In the case of a qualified State or local political 
organization described in section 527(e)(5), $25,000 is replaced by 
$100,000.
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    Section 6033(h) provides additional reporting requirements for 
controlling organizations, within the meaning of section 512(b)(13). 
Section 6033(h) requires controlling organizations to include on their 
returns any (1) interest, annuities, royalties, or rents received from 
each controlled entity (within the meaning of section 512(b)(13)), (2) 
any loans made to each such controlled entity, and (3) any transfers of 
funds between such controlling organization and each such controlled 
entity.
    Section 6033(k) provides additional reporting requirements for 
sponsoring organizations described in section 4966(d)(1). Section 
6033(k) requires each such organization to report on its annual return 
(1) the total number of donor advised funds (as defined in section 
4966(d)(2)) it owns at the end of such taxable year, (2) the aggregate 
value of assets held in such funds at the end of such taxable year, and 
(3) the aggregate contributions to and grants made from such funds 
during such taxable year.
    Section 6033(l) provides additional reporting requirements for 
supporting organizations described in section 509(a)(3). Section 
6033(l) requires each supporting organization to report on its annual 
return: (1) The supported organizations (as defined in section 
509(f)(3)) with respect to which such organization provides support; 
(2) whether the organization meets the requirements of clause (i), 
(ii), or (iii) of section 509(a)(3)(B); and (3) a

[[Page 31960]]

certification that the organization meets the requirements of section 
509(a)(3)(C).
    The general rule regarding confidentiality of returns is found in 
section 6103, which provides that returns and return information shall 
be confidential, and, except as authorized by the Code, no person 
having access to this information shall disclose any return or return 
information obtained by that person in any manner.
    Section 6104 provides an exception to the general rule regarding 
confidentiality of returns. In general, under section 6104(b), the 
Secretary must make the annual returns filed under section 6033 
available to the public. However, section 6104(b) does not authorize 
the Secretary to disclose to the public the name or address of any 
contributor to any tax-exempt organization except a private foundation 
(as defined in section 509(a), including a trust described in section 
4947(a)(1) that is treated as a private foundation) or a section 527 
organization. Section 301.6104(b)-1(b)(2) provides that although the 
names and addresses are not to be disclosed, the amounts of 
contributions to an organization shall be made available for public 
inspection unless the disclosure of such information can reasonably be 
expected to identify any contributor.
    In addition to the required disclosure of annual returns by the 
Secretary, section 6104(d) and Sec.  301.6104(d)-1 require certain tax-
exempt organizations to provide their annual information returns to a 
member of the public upon request. Similar to the restrictions on 
disclosing contributor information placed on the Secretary by section 
6104(b), section 6104(d)(3)(A) provides that an organization, other 
than a private foundation or a section 527 organization, is not 
required to disclose the names and addresses of its contributors.
    The Treasury Regulations in effect prior to this Treasury Decision 
(prior regulations), which remain largely unchanged, reflected many of 
the statutory requirements of section 6033. Consistent with section 
6033(a)(1), Sec.  1.6033-2(a)(1) of the regulations provides that 
``except as provided in section 6033(a)(3) and paragraph (g) [of Sec.  
1.6033-2], every organization exempt from taxation under section 501(a) 
shall file an annual information return specifically setting forth its 
items of gross income, gross receipts and disbursements, and such other 
information as may be prescribed in the instructions, issued with 
respect to the return.''
    Although the information to be reported for any particular tax year 
is set forth in the forms and instructions for each such year, Sec.  
1.6033-2(a)(2)(ii) of the regulations also provides a list of 
``information generally required to be furnished by an organization 
exempt under section 501(a)'' on the annual return, which generally 
tracks section 6033(b).\2\ However, the list in the prior regulations 
had not been updated to reflect certain information that the statute 
generally requires to be reported because the statute had been amended 
following the original issuance of the regulations. Specifically, items 
in sections 6033(b)(10) (relating to taxes imposed on certain lobbying 
and political expenditures by organizations described in section 
501(c)(3)) and 6033(b)(11) (relating to taxes imposed with respect to 
an organization, an organization manager, or any disqualified person 
under section 4958) were not reflected in the prior regulations.
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    \2\ The list in the regulations includes, but is not limited to, 
gross income for the year; dues and assessments from members and 
affiliates for the year; expenses incurred within the year 
attributable to gross income; disbursements (including prior years' 
accumulations) made within the year for the purposes for which it is 
exempt; a balance sheet showing its assets, liabilities, and net 
worth as of the beginning and end of such year; the total of the 
contributions, gifts, grants and similar amounts received by it 
during the taxable year; the names and addresses of all officers, 
directors, or trustees (or any person having responsibilities or 
powers similar to those of officers, directors or trustees) of the 
organization; and certain compensation and payment information. See 
Sec.  1.6033-2(a)(2)(ii).
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    Two provisions of the prior regulations expanded upon the statute 
with regard to the reporting of certain contributor information. First, 
section 6033(b)(5) requires organizations described in section 
501(c)(3) generally to provide on the annual information return filed 
with the IRS the names and addresses of persons who contribute $5,000 
or more during the taxable year. Section 1.6033-2(a)(2)(ii)(F) of the 
prior regulations had extended this requirement beyond section 
501(c)(3) organizations to all organizations exempt from taxation under 
section 501(a). Second, Sec.  1.6033-2(a)(2)(iii)(D) of the prior 
regulations provided that organizations described in section 501(c)(7) 
(social clubs), section 501(c)(8) (fraternal beneficiary societies), or 
section 501(c)(10) (domestic fraternal societies) generally must report 
the name of each person who contributes more than $1,000 to be used 
exclusively for religious, charitable, scientific, literary, or 
educational purposes, or for the prevention of cruelty to children or 
animals.
    Incorporating the statutory filing exceptions of section 
6033(a)(3), Sec.  1.6033-2(g)(1) provides a list of organizations that 
are not required to file an annual return under section 6033(a)(1). 
Within that list, Sec.  1.6033-2(g)(1)(iii) previously provided that 
certain specified organizations described in section 6033(a)(3)(C) 
whose gross receipts are generally not more than $5,000 annually are 
not required to file the return required under section 6033(a)(1). 
Further, Sec.  1.6033-2(g)(6) provides that the Commissioner may 
relieve any organization or class of organizations (other than a 
supporting organization described in section 509(a)(3)) from filing, in 
whole or in part, the annual return required under section 6033 if the 
Commissioner ``determines that such returns are not necessary for the 
efficient administration of the internal revenue laws.''
    Accordingly, other than with regard to supporting organizations, 
section 6033 and the regulations under section 6033 provide the 
Commissioner with broad discretionary authority to determine what 
information must be reported and to grant relief, in whole or in part, 
from the annual filing requirements of tax-exempt organizations if the 
Commissioner determines that the information is not necessary for the 
efficient administration of the internal revenue laws.
    For decades, the Commissioner has exercised discretion under 
section 6033(a)(3)(B) and Sec.  1.6033-2(g)(6) to relieve organizations 
of filing requirements under section 6033 through subregulatory 
guidance such as revenue procedures and annual information return 
instructions including, for example, Rev. Proc. 95-48, 1995-2 C.B. 418, 
which grants reporting relief for governmental units and affiliates of 
governmental units, and Rev. Proc. 96-10, 1996-1 C.B. 577, which 
relieves from a filing requirement under section 6033(a) certain 
organizations that are operated, controlled, or supervised by one or 
more churches, integrated auxiliaries, or conventions or associations 
of churches. (Both revenue procedures are discussed further in Part VI 
of the Summary of Comments and Explanation of Provisions section of 
this preamble.) Revenue Procedure 83-23, 1983-1 C.B. 687, represents 
another exercise of this discretion. In that revenue procedure, the 
Department of the Treasury (Treasury Department) and the IRS increased 
to $25,000 the minimum amount of gross receipts normally required to be 
received in a year by an organization exempt under section 501(a) to 
trigger a filing requirement under section 6033(a). That revenue 
procedure also expanded the group of

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tax-exempt organizations not required to file an annual information 
return due to a gross receipts threshold beyond those listed in section 
6033(a)(3)(C). Revenue Procedure 2011-15, 2011-3 I.R.B. 322, further 
increased this gross receipts threshold amount to $50,000 for most 
organizations exempt under section 501(a).\3\ Revenue Procedure 2011-15 
also relieved most foreign organizations and organizations formed in a 
United States possession from a filing requirement under section 
6033(a) if their gross receipts from sources within the United States 
do not exceed the $50,000 threshold and if they have no significant 
activity (including lobbying and political activity and the operation 
of a trade or business, but excluding investment activity) in the 
United States.
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    \3\ An organization that is not required to file an annual 
return by virtue of Rev. Proc. 2011-15 must submit a Form 990-N e-
Postcard annually in electronic format as described in section 
6033(i)(1). Rev. Proc. 2011-15, section 3.03.
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    Similarly, consistent with past exercises of authority under 
section 6033 and the prior regulations, the Treasury Department and the 
IRS issued Rev. Proc. 2018-38, 2018-31 I.R.B. 280, granting tax-exempt 
organizations required to file the Form 990 or Form 990-EZ, other than 
organizations described in section 501(c)(3), relief from reporting the 
names and addresses of contributors on Schedules B, ``Schedule of 
Contributors,'' filed with Form 990 or 990-EZ (or completing the 
similar portions of Part IV of the Form 990-BL). Revenue Procedure 
2018-38 also provided that organizations described in sections 
501(c)(7), (8), or (10) need not provide the names and addresses of 
persons who contributed more than $1,000 during the taxable year to be 
used for exclusively charitable purposes on their annual information 
returns required under section 6033. Revenue Procedure 2018-38 did not 
affect the information required to be reported on Forms 990, 990-EZ, or 
990-PF by organizations described in section 501(c)(3) (which for 
purposes of section 6033 include nonexempt charitable trusts described 
in section 4947(a)(1) and nonexempt private foundations described in 
section 6033(d)) or section 527 organizations.
    On July 30, 2019, the United States District Court for the District 
of Montana set aside Rev. Proc. 2018-38 on procedural grounds because, 
in the court's view, the notice and comment procedures of the 
Administrative Procedure Act applied and Rev. Proc. 2018-38 had not 
been subject to such notice and comment. See Bullock, et al. v. IRS, 
401 F.Supp.3d 1144 (D. Mont. Jul. 30, 2019). However, the court 
emphasized that its ruling did not implicate the merits of the revenue 
procedure and that ``the substance'' of the Commissioner's ultimate 
decision on reporting the names and addresses of contributors ``remains 
subject to the Commissioner's discretion.'' Id. at 1154, 1159.
    On September 10, 2019, the Treasury Department and the IRS 
published a notice of proposed rulemaking (REG-102508-16) in the 
Federal Register (84 FR 47447) containing proposed regulations under 
section 6033 (2019 proposed regulations). The Treasury Department and 
the IRS received 8,387 written and electronic comments responding to 
the 2019 proposed regulations. Comments are available at 
www.regulations.gov or upon request. A public hearing on the 2019 
proposed regulations was held on February 7, 2020.
    After consideration of all comments received on the 2019 proposed 
regulations and the testimony presented at the public hearing, this 
Treasury Decision adopts the proposed regulations with minor 
modifications, as described in the Summary of Comments and Explanation 
of Provisions.

Summary of Comments and Explanation of Provisions

I. Overview

    The 2019 proposed regulations proposed to modify the regulations 
under section 6033 to align them with certain statutory amendments to 
section 6033 that had not previously been reflected in the regulations, 
and to update them to encompass certain instances in which the 
Commissioner has previously exercised discretion under the statute and 
regulations to relieve organizations, in whole or in part, from the 
filing requirements set forth in section 6033 or in the regulations 
issued under section 6033.
    Specifically, the proposed changes included the following: (1) 
Adding items listed in section 6033(b)(10) and (11), as applicable, to 
the list of items generally required to be reported and adding other 
statutory reporting requirements for controlling organizations, 
sponsoring organizations, and supporting organizations; (2) amending 
the gross receipts threshold (with an additional requirement for 
foreign organizations and United States possession organizations) that 
triggers a filing requirement under section 6033 for tax-exempt 
organizations (other than private foundations and supporting 
organizations); (3) clarifying that section 527 organizations with 
gross receipts greater than $25,000 generally are subject to the 
reporting requirements under section 6033(a)(1) as if they were exempt 
from taxes under section 501(a); and (4) specifying that only 
organizations described in section 501(c)(3) and section 527 
organizations generally would continue to be required to provide names 
and addresses of contributors on their Forms 990, Forms 990-EZ, and 
Forms 990-PF.
    The following sections address these proposed changes in more 
detail, summarize the comments received on the proposed changes, 
provide the responses of the Treasury Department and the IRS to the 
comments, and describe the final regulation adopted in this Treasury 
Decision.

II. Items Required in Annual Information Returns

    In the 2019 proposed regulations, the Treasury Department and the 
IRS proposed to amend Sec.  1.6033-2(a)(2)(ii) by adding two new 
provisions to reflect information to be furnished annually that had 
been added to section 6033(b) but that had not yet been added to the 
list in the regulations of items generally required to be reported on 
an organization's annual information return. These items of information 
are listed in section 6033(b)(10) (relating to taxes imposed on certain 
lobbying and political expenditures by organizations described in 
section 501(c)(3)) and 6033(b)(11) (relating to taxes imposed with 
respect to an organization, an organization manager, or any 
disqualified person on any excess benefit transaction under section 
4958). In addition, a cross-reference to Sec.  1.6033-2(a)(1) was 
proposed to be added to the introductory sentence of Sec.  1.6033-
2(a)(2)(ii).
    The Treasury Department and the IRS also proposed to incorporate 
into the regulations the statutory reporting requirements found in 
section 6033(h) for controlling organizations (as defined in section 
512(b)(13)), section 6033(k) for sponsoring organizations (as defined 
in section 4966(d)(1)), and section 6033(l) for supporting 
organizations (as defined in section 509(a)(3)).
    The Treasury Department and the IRS did not receive any comments on 
these additions to Sec.  1.6033-2. This Treasury Decision adopts these 
provisions from the 2019 proposed regulations without change.

III. Gross Receipts Filing Threshold

    Consistent with the discretionary authority granted by section 
6033(a)(1)(B), the Treasury Department and the IRS previously 
determined that the efficient administration of the tax

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laws does not require the filing of returns by organizations that are 
exempt under section 501(a) (other than private foundations and 
supporting organizations) that normally have less than $50,000 in gross 
receipts annually, except for foreign organizations and organizations 
formed in a United States possession that have significant activity 
(including lobbying and political activity and the operation of a trade 
or business, but excluding investment activity) in the United States. 
See Rev. Proc. 2011-15. In the 2019 proposed regulations, the Treasury 
Department and the IRS proposed to amend Sec.  1.6033-2(g)(1)(iii) to 
reflect the $50,000 gross receipts filing threshold currently in 
effect, rather than the $5,000 gross receipts threshold found in 
section 6033(a)(3)(A)(ii), and the application of the $50,000 threshold 
to organizations other than those listed in section 6033(a)(3)(C).
    The Treasury Department and the IRS received two comments 
expressing support for amending the regulations to reflect the $50,000 
threshold and one comment stating, without explaining why, that 
organizations with annual gross receipts normally not more than $50,000 
but more than $25,000 ought to be required to file a return. As 
discussed earlier in this section III, the Treasury Department and the 
IRS increased the filing threshold from $25,000 to $50,000 in 2011 
based on a consideration of the needs of tax administration. The 
Treasury Department and the IRS continue to consider the $50,000 
threshold to strike an appropriate balance between the efficient use of 
resources for both tax-exempt organizations and the IRS, and ensuring 
compliance with the tax laws by tax-exempt organizations. Organizations 
with gross receipts below the threshold must continue to file Form 990-
N under section 6033(i).
    Accordingly, the final regulations provide that the gross receipts 
threshold for all organizations (other than private foundations and 
supporting organizations) formed in the United States is $50,000. The 
final regulations also incorporate the previously granted relief from 
the filing requirement under section 6033(a) for foreign organizations 
and organizations formed in a United States possession (other than 
private foundations and supporting organizations) that is reflected in 
Rev. Proc. 2011-15.
    In the 2019 proposed regulations, the Treasury Department and the 
IRS also proposed to amend Sec.  1.6033-2(g)(6) to clarify that the 
Commissioner has authority to provide further relief (including 
possible further increases in filing thresholds) through forms, 
instructions to forms, or guidance published in the Internal Revenue 
Bulletin. The Treasury Department and the IRS did not receive any 
comments on this proposed clarification, and the final regulations 
incorporate the language as proposed.

IV. Clarifying the Treatment of Section 527 Organizations

    In the 2019 proposed regulations, the Treasury Department and the 
IRS proposed to add Sec.  1.6033-2(a)(5) to state the current 
requirement that section 527 organizations, subject to the filing 
exceptions provided by section 6033(g)(3) or as permitted under section 
6033(g)(4), follow the reporting requirements under section 6033(a)(1) 
in the same manner as tax-exempt organizations, except to the extent 
that the Commissioner revises those requirements as appropriate to 
carry out the purposes of section 527. Proposed Sec.  1.6033-2(a)(5) 
would also state the current requirement that section 527 
organizations, like organizations described in section 501(c)(3), must 
continue to report the names and addresses of certain contributors on 
the section 527 organizations' annual Forms 990 or Forms 990-EZ.
    The Treasury Department and the IRS did not receive comments on 
this clarification of the treatment of section 527 organizations in 
Sec.  1.6033-2(a)(5). This Treasury Decision adopts these provisions 
from the 2019 proposed regulations without change.
    The Treasury Department and the IRS received one comment requesting 
that all qualified state and local political organizations described in 
section 527(e)(5) be exempted from annual filing requirements. Section 
6033(g)(1) generally requires a section 527 organization to file an 
annual information return if it has annual gross receipts of $25,000 or 
more for the taxable year (subject to mandatory exceptions in section 
6033(g)(3)) but provides a higher threshold of $100,000 or more of 
gross receipts for qualified state and local political organizations. 
Under section 6033(g)(4), the Secretary has discretionary authority to 
relieve any section 527 organization from filing an information return 
if the Secretary determines that such filing is ``not necessary to the 
efficient administration of the internal revenue laws.'' Because the 
filing threshold for qualified state and local political organizations 
under section 6033(g)(1) already is higher than the threshold that 
applies to organizations exempt from tax under section 501(a), the 
Treasury Department and the IRS do not adopt this suggestion.

V. Reporting of Names and Addresses of Contributors

    As stated in the 2019 proposed regulations, section 6033 does not 
specify that the names and addresses of contributors to tax-exempt 
organizations, other than those described in section 501(c)(3), be 
reported on annual information returns. Consistent with the Secretary's 
broad discretion under section 6033(a) to set forth information 
reporting requirements ``for the purpose of carrying out the internal 
revenue laws . . . by forms or regulations,'' Sec.  1.6033-2(a)(2)(ii) 
lists items that are generally required to be included in the annual 
filings of organizations exempt under section 501(a). In the 2019 
proposed regulations, the Treasury Department and the IRS proposed to 
amend the regulations to specify that the need to provide the names and 
addresses of substantial contributors will generally apply only to tax-
exempt organizations described in section 501(c)(3), and to remove 
reference to the provision of names of certain contributors to 
organizations described in sections 501(c)(7), (8), and (10). The 
proposed regulations did not alter the existing requirement contained 
in Schedule B of the Form 990 and 990-EZ for tax-exempt organizations 
to report annually the amounts of contributions from each substantial 
contributor, or the existing requirement to maintain the names and 
addresses of substantial contributors should the IRS need this 
information on a case-by-case basis.
    In proposing to exercise this discretion, the Treasury Department 
and the IRS sought to balance the IRS's need for the information for 
tax administration purposes against the costs and risks associated with 
reporting of the information.
    The majority of the comments the Treasury Department and the IRS 
received in response to the 2019 proposed regulations concerned the 
general requirement for reporting of names and addresses of substantial 
contributors.\4\ This information is reported on Schedule B, ``Schedule 
of Contributors,'' to Forms 990, 990-EZ, or

[[Page 31963]]

990-PF. The next several sections of this preamble summarize and 
respond to those comments.
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    \4\ No comments were received specifically addressing the 
removal of the requirement to provide the names of certain 
contributors to organizations described in sections 501(c)(7), (8), 
and (10). However, most comments did not distinguish between types 
of tax-exempt organizations affected by the proposed changes, and 
some of the issues discussed are applicable to the specific change 
to reporting requirements of organizations described in sections 
501(c)(7), (8), and (10).
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a. IRS Need for Annual Reporting of Names and Addresses of Substantial 
Contributors for Tax Administration Purposes
    Some commenters favoring the proposed changes stated that the IRS 
does not need the names and addresses of substantial contributors to 
tax-exempt organizations to which the relief extends to be reported 
annually, and expected that other information contained in Forms 990 or 
990-EZ would be adequate for administration of the Code. Commenters 
favoring the proposed changes also noted that the names and addresses 
are still required to be maintained and the IRS can obtain that 
information on examination. These commenters asserted that such an 
approach is more appropriately tailored to the IRS's need for the 
information than a blanket reporting requirement.
    Several other commenters opposing the proposed changes asserted 
instead that the IRS would not be as efficient in enforcing federal tax 
laws without direct access to the names and addresses of substantial 
contributors to the tax-exempt organizations affected by the proposed 
rule. These commenters asserted that information contained elsewhere in 
Forms 990 and 990-EZ were not adequate substitutes for information 
contained in Schedule B for purposes of evaluating private benefit or 
enforcing political activity limits on organizations described in 
section 501(c)(4). Some commenters also asserted that obtaining 
contributor names and addresses on examination was not a sufficient 
substitute for having the information on hand for the following 
reasons. Some commenters suggested that requesting the information on 
examination could be a ``tip-off'' to the organization that it is under 
additional scrutiny, leading the organization to hide assets and 
destroy or falsify evidence. Some commenters suggested that Schedule B 
contains information that helps the IRS initially determine whether or 
not it should conduct an examination. And some commenters suggested 
that requesting information on an ad hoc basis is not efficient for the 
IRS or affected tax-exempt organizations.
    The concerns expressed by commenters opposing the proposed changes 
are misplaced. As explained in the preamble to the 2019 proposed 
regulations, the IRS does not need the names and addresses of 
substantial contributors to tax-exempt organizations not described in 
section 501(c)(3) to be reported annually on Schedule B of Form 990 or 
Form 990-EZ in order to administer the internal revenue laws. For the 
specific purpose of evaluating possible private benefit or inurement or 
other potential issues relating to qualification for exemption, the IRS 
can obtain sufficient information from other elements of the Form 990 
or Form 990-EZ and can obtain the names and addresses of substantial 
contributors, along with other information, upon examination, as 
needed. In light of the inefficiencies involved in collecting, 
maintaining, and redacting this information if it were reported 
annually, the Treasury Department and the IRS do not agree with 
comments suggesting that requiring affected tax-exempt organizations to 
provide name and address information of substantial contributors upon 
examination is less efficient for the IRS and affected tax-exempt 
organizations. Moreover, as noted in the proposed regulations, the 
primary utility of the names and addresses of substantial contributors 
arises during the examination process. While some commenters suggested 
that such information could be used before an examination to determine 
whether an examination is warranted, the IRS takes various factors into 
account when deciding whether to select a case for examination, and the 
IRS's process for selection would not be affected by this change. Since 
examinations are initiated by prescribed correspondence, the taxpayer 
will already know of the IRS's compliance interest before receiving the 
request for the particular information.
    Therefore, the Treasury Department and the IRS have determined that 
the annual collection of the names and addresses of substantial 
contributors to tax-exempt organizations, other than organizations 
described in section 501(c)(3), is not necessary for the efficient 
administration of the internal revenue laws. Instead, requiring all 
tax-exempt organizations to report the amounts of contributions from 
each substantial contributor on the Schedule B of the Form 990 and 990-
EZ, as well as requiring them to maintain the names and addresses of 
substantial contributors should the IRS need this information on a 
case-by-case basis, is sufficient for the efficient administration of 
the Code.
b. Privacy and Risk of Disclosure
    Commenters supporting the proposed changes relating to the 
furnishing of certain contributors' names and addresses expressed 
general concerns about the privacy of contributors to tax-exempt 
organizations. While the IRS is statutorily required to maintain the 
confidentiality of contributor names and addresses pursuant to section 
6104(b), some commenters expressed concern that such information may 
accidentally be disclosed or that IRS systems could be breached. Some 
commenters also discussed the risk of disclosure by state authorities 
to the extent contributor names and addresses are shared by the IRS 
with an appropriate state officer consistent with section 6104(c). A 
few commenters also expressed concern that politically or ideologically 
motivated IRS employees could leak contributor names and addresses or 
select certain contributors for additional tax scrutiny. In contrast, 
however, some commenters, who opposed the proposed changes eliminating 
the requirement to report certain contributor names and addresses, 
asserted that the risk of disclosure is insubstantial.
    The IRS takes seriously its duty to protect confidential 
information as required by section 6103 and to enforce the internal 
revenue laws with integrity and fairness to all. However, reporting the 
names and addresses of substantial contributors on an annual basis 
poses a risk of inadvertent disclosure of information that is not open 
to public inspection because information on Schedule B generally must 
be redacted from an otherwise disclosable information return. The IRS 
has experienced incidents of inadvertent disclosure and has taken other 
steps to reduce future occurrences of such disclosures. By removing the 
general requirement to report names and addresses of substantial 
contributors to tax-exempt organizations not described in section 
501(c)(3), the final regulations further reduce the risk of inadvertent 
disclosure of names and addresses of contributors for such 
organizations. Without a tax administration need to collect this 
information on an annual basis, the Treasury Department and the IRS 
have determined this change in affected tax-exempt organizations' 
reporting obligations furthers the steps already taken to protect 
confidential taxpayer information.
c. Harassment of Contributors and Related Constitutional Concerns
    Commenters supporting the proposed change also discussed, often in 
connection with the risk-of-disclosure issue, the concern that 
supporters of certain causes or organizations face possible reprisals 
(such as harassment, threats of violence, or economic retribution) if 
their status as contributors is revealed publicly. Additional 
commenters discussed the concern that fear of exposure and fear of 
reprisal may have a ``chilling effect,''

[[Page 31964]]

discouraging or deterring potential contributors from giving to certain 
tax-exempt organizations and reducing public participation in 
organizations benefiting social welfare. Many of these commenters 
believed this ``chilling effect'' implicates constitutional rights such 
as freedom of speech and freedom of association.
    Other commenters opposing the proposed change asserted that 
requiring reporting to the IRS of substantial contributors' names and 
addresses is constitutional, citing federal appellate court decisions 
upholding state laws requiring that charitable organizations provide 
state regulators with copies of unredacted Schedules B.\5\
---------------------------------------------------------------------------

    \5\ Citizens United v. Schneiderman, 882 F.3d 374 (2d Cir. 
2018); Center for Competitive Politics v. Harris, 784 F.3d 1307 (9th 
Cir. 2015).
---------------------------------------------------------------------------

    The Treasury Department and the IRS note that the names and 
addresses of substantial contributors provided to the IRS are generally 
required to be kept confidential in accordance with section 6103. By 
removing the general requirement to report annually names and addresses 
of substantial contributors to organizations exempt under section 
501(a) but not described in section 501(c)(3), the final regulations 
reduce the risk of inadvertent disclosure of names and addresses of 
contributors for such organizations and thereby address concerns 
expressed by some commenters regarding potential adverse consequences 
of any such public disclosures.
d. Compliance Burden on Affected Tax-Exempt Organizations and 
Associated Costs on the IRS
    Some commenters supporting the proposed changes to the general 
requirement to report names and addresses of substantial contributors 
mentioned an expectation that the changes would reduce the compliance 
burden on affected tax-exempt organizations, allowing such 
organizations to spend more time and resources on their missions. 
Commenters also expressed an expectation that the proposed changes 
would reduce the burden on the IRS associated with the redaction of 
information as required by section 6104(b).
    Other commenters opposed the proposed changes regarding the general 
requirement to report names and addresses of substantial contributors, 
stating that both the compliance costs associated with reporting 
contributor names and addresses and the IRS burden associated with 
redacting such information are insubstantial. Some commenters further 
argued that the proposed changes would lead to an increase in 
compliance costs for tax-exempt organizations as individual states, no 
longer able to rely on Schedule B information obtained from the IRS, 
would develop their own disparate reporting requirements.
    The Treasury Department and the IRS agree with certain commenters 
that limiting the general requirement to report names and addresses of 
substantial contributors will reduce costs with respect to federal tax 
compliance. While it is true that all tax-exempt organizations will 
continue to be required to maintain records regarding their substantial 
contributors, removing the annual reporting requirement will lessen 
their overall compliance burden. In addition, this change will obviate 
the need for an affected tax-exempt organization to redact name and 
address information if the tax-exempt organization must provide its 
Schedule B to a member of the public if requested under section 
6104(b). Particularly for smaller tax-exempt organizations with limited 
resources, few dedicated staff, and less access to advisors regarding 
the rules governing tax-exempt organizations eliminating this 
requirement will be beneficial.
    Without a tax administration need for annually reporting name and 
address information, the Treasury Department and the IRS determined 
that it is valuable to save tax-exempt organizations the administrative 
burdens of reporting and redacting it. While some commenters have 
suggested that some states may choose to impose their own reporting 
requirements, thereby increasing the compliance burden on tax-exempt 
organizations, the Treasury Department and the IRS expect that each 
state can determine the appropriateness of the burdens it may impose in 
light of its own tax administration needs.
    Similarly, the potential burden on the IRS associated with 
redacting Schedule B information is lessened when fewer organizations 
are required to report names and addresses on Schedule B. This 
reduction in burden, when combined with the lack of tax administration 
need discussed earlier in this preamble, supports specifying that the 
need to provide the names and addresses of substantial contributors 
will generally apply only to organizations described in section 
501(c)(3), as provided in the statute.
e. Extension of Relief to Organizations Described in Section 501(c)(3)
    A few commenters supported the proposed changes, but also requested 
that the Treasury Department and the IRS extend the relief from 
reporting the names and addresses of substantial contributors to 
organizations described in section 501(c)(3). One commenter asserted 
that the IRS had exceeded its statutory authority by requiring the 
reporting of the names and addresses of substantial contributors to 
organizations described in section 501(c)(3) (other than private 
foundations). That commenter contends that the Secretary only has the 
authority to request the names and addresses of substantial 
contributors as that term is defined in section 507(d)(2). This 
definition, according to the commenter, would limit the existence of 
substantial contributors solely to contributors to private foundations 
and would require that a contributor have provided more than two 
percent of the total contributions to the organization over its 
lifetime.
    The Treasury Department and the IRS do not agree with this 
interpretation of section 6033(b). Section 507(d)(2) specifically 
limits the application of the definition of ``substantial contributor'' 
found therein to section 507(d)(1). Section 6033 does not incorporate 
the definition of substantial contributor found in section 507(d)(2) 
and provides the Secretary with broad discretion to prescribe 
information to be collected on an annual return that is necessary for 
carrying out the purposes of the Code. Accordingly, consistent with 
section 6033(b), the Treasury Department and the IRS have the authority 
to continue to require that organizations described in section 
501(c)(3) report the names and addresses of substantial contributors on 
Schedule B. The Treasury Department and the IRS decline to extend the 
relief from reporting names and addresses of substantial contributors 
to organizations described in section 501(c)(3) in this final 
regulation.
f. Campaign Finance Enforcement
    Commenters opposing the proposed changes to the general requirement 
to report names and addresses of substantial contributors commonly 
invoked concerns about the use of tax-exempt entities, including by 
special interests, to anonymously influence elections and enable 
improper interference in U.S. elections. Commenters asserted that the 
proposed changes would lead to an increase in the flow of money into 
U.S. elections

[[Page 31965]]

through organizations described in sections 501(c)(4) and (6). Several 
commenters also suggested that the changes would make it more difficult 
to detect foreign spending or federal contractor spending on U.S. 
elections in violation of federal campaign finance laws. One commenter 
discussed 52 U.S.C. 30111(f), asserting that Congress had directed the 
IRS to ``consult and work with'' the Federal Election Commission (FEC) 
on rulemakings regarding campaign finance matters.
    Other commenters supporting the proposed changes stated that there 
are other, better measures in place to track foreign spending on U.S. 
elections than Schedule B and that it is unlikely that contributors who 
are intending to violate campaign finance laws will use foreign 
addresses or otherwise make clear their violation in a manner subject 
to reporting to the IRS on Schedule B. Commenters also stated that the 
IRS generally cannot share Schedule B information with the agencies 
charged with enforcing campaign finance laws.
    As stated in the preamble to the 2019 proposed regulations, the 
Treasury Department and the IRS reiterate that Congress has not 
authorized the IRS to enforce campaign finance laws. Schedule B 
reflects the enforcement needs related to the Code, not the campaign 
finance laws. Furthermore, section 6103 generally prohibits the IRS 
from disclosing any names and addresses of organizations' substantial 
contributors to federal agencies for non-tax investigations, including 
campaign finance matters, except in narrowly prescribed 
circumstances.\6\
---------------------------------------------------------------------------

    \6\ The confidentiality and disclosure of tax returns and return 
information in both tax and non-tax investigations is governed by 
section 6103. Section 6103 contains several provisions authorizing 
the disclosure of returns and return information to Federal law 
enforcement agencies under prescribed circumstances after meeting 
specified procedural requirements. For example, these include 
disclosures to DOJ for the investigation and prosecution of non-tax 
Federal crimes via an ex parte court order or via a request from the 
highest ranking official of a Federal agency or the highest 
officials within DOJ and in the course of an investigation after 
referral to and approval by DOJ as a Grand Jury Tax Investigation.
    In the context of states, sections 6103 and 6104 authorize 
disclosure of certain returns and return information to the states 
for specified purposes. Generally, section 6103(d) authorizes 
disclosure to state tax agencies for state tax administration 
purposes only, while section 6104(c) permits disclosure of return 
information, in the case of organizations other than those described 
in section 501(c)(1) or (3), to an appropriate state officer to the 
extent necessary in administering state laws relating to the 
solicitation or administration of charitable funds or charitable 
assets of such organizations, if certain requirements are met. Some 
states may also independently obtain contributor information from 
the organizations.
---------------------------------------------------------------------------

    With regard to coordination with the FEC, section 30111(f) of title 
52 does not require the IRS to consult with the FEC on regulations 
issued by the IRS under the Code. Instead, section 30111 of title 52 
authorizes the FEC to prescribe rules, regulations, and forms to carry 
out the provisions of the Federal Election Campaign Act and requires 
the FEC to consult with the IRS when ``prescribing such rules under 
this section.'' This final regulation is prescribed by the IRS, not by 
the FEC; and, it is prescribed under section 7805 of title 26, not 
section 30111 of title 52.
    Finally, the Treasury Department and the IRS note that the change 
in reporting of the names and addresses of substantial contributors 
will have no effect on information currently available to the public. 
Sections 6103 and 6104 prohibit the IRS from publicly disclosing the 
names and addresses of contributors to tax-exempt organizations (other 
than private foundations). With respect to such tax-exempt 
organizations, any names and addresses of substantial contributors on 
Schedule B are not made public and disclosure restrictions generally 
prohibit making such information available for use by other agencies 
for their enforcement purposes.\7\
---------------------------------------------------------------------------

    \7\ See note 6.
---------------------------------------------------------------------------

g. Impact on States
    Some commenters opposing the proposed changes discussed the impact 
on the state taxing and other authorities that may use Schedule B 
information shared by the IRS pursuant to sections 6103(d) or 
6104(c).\8\ In these comments, which included a comment from the 
attorneys general of nineteen states \9\ and the District of Columbia, 
commenters discussed the states' use of Schedule B information for 
purposes related to state tax administration, enforcement of state-
level campaign finance law, and enforcement of state-level consumer 
protection law. Commenters claimed that no longer receiving Schedule B 
information from the IRS would require a reorientation of processes 
that would cost the states time and money. A few commenters also 
referenced a history of cooperation between the IRS and state tax 
regulators in this area.
---------------------------------------------------------------------------

    \8\ Note that some commenters are unclear as to how the states 
obtained the Schedule B information. Information that a state 
obtains directly from a tax-exempt organization as part of its state 
filing is not information disclosed by the IRS under either section 
6103 or section 6104.
    \9\ The nineteen attorneys general represented the states of New 
Jersey, New York, California, Connecticut, Colorado, Delaware, 
Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, 
Nevada, New Mexico, Oregon, Pennsylvania, Rhode Island, and 
Virginia.
---------------------------------------------------------------------------

    Other commenters in favor of the proposed changes asserted that 
states are not allowed to use Schedule B information for non-tax 
purposes and that states, in any event, did not need Schedule B 
information for the efficient administration of state tax laws. A 
comment from eleven state attorneys general \10\ asserted that states 
would not be negatively impacted by the proposed rule because they do 
not rely on the Schedule B data for enforcement efforts and can receive 
the information through targeted examinations.
---------------------------------------------------------------------------

    \10\ The eleven attorneys general represented the states of 
Arizona, Alabama, Alaska, Indiana, Kansas, Louisiana, Oklahoma, 
South Carolina, Tennessee, Texas, and West Virginia.
---------------------------------------------------------------------------

    The Treasury Department and the IRS reiterate that the Code limits 
the purposes for which states may use returns or return information 
obtained from the IRS. When states receive returns or return 
information under section 6103(d), the use of that information is 
limited to the administration of state tax laws. When states receive 
returns or return information under section 6104(c), the use of that 
information is limited by statute to administering state laws relating 
to the solicitation or administration of charitable funds or charitable 
assets of such organizations. Use of returns or return information 
received from the IRS under these sections for purposes other than 
those listed above (for example, for the enforcement of campaign 
finance laws or consumer protection laws) is not consistent with 
states' authorized use under sections 6103(d) and 6104(c). While some 
states may use name and address information for those authorized 
purposes, the divergent comments from state attorneys general indicate 
that the desire to obtain such information, and the purpose for doing 
so, may differ from state to state. To the extent that any state 
determines that the burdens of collecting and maintaining such 
information are justified by its own needs, such a state is free to 
require reporting of such information to the state and to maintain the 
information at the state's own expense.
h. Conclusion
    As explained in the preamble to the 2019 proposed regulations, in 
exercising the discretion to relieve tax-exempt organizations not 
described in section 501(c)(3) of the obligation to annually report the 
names and addresses of substantial contributors, the Treasury 
Department and the IRS seek to balance the IRS's need for the 
information for tax administration purposes against the

[[Page 31966]]

burden and risks associated with reporting of the information.
    The Treasury Department and the IRS have concluded that the IRS 
does not need the names and addresses of substantial contributors to 
tax-exempt organizations not described in section 501(c)(3) to be 
reported annually on Schedule B of Form 990 or Form 990-EZ in order to 
administer the internal revenue laws. In light of the risks and burden 
associated with requiring the annual reporting of such information, 
this Treasury Decision revises the regulations under section 6033 to 
remove the general requirement for tax-exempt organizations not 
described in sections 501(c)(3) or 527 to report annually the names and 
addresses of substantial contributors.
    This Treasury Decision revises Sec.  1.6033-2(a)(2)(ii)(F) to 
provide that organizations described in section 501(c)(3) generally are 
required to provide names and addresses of contributors of more than 
$5,000 on their Forms 990, 990-EZ, and 990-PF. Similarly, Sec.  1.6033-
2(a)(2)(iii)(D) is revised to remove the requirement to provide the 
names of contributors who contribute over $1,000 for a specific 
charitable purpose to organizations described in sections 501(c)(7), 
(8), and (10). Additionally, as discussed earlier in this preamble, 
section 527 organizations must continue to report the names and 
addresses of substantial contributors.
    Tax-exempt organizations must continue to report the amounts of 
contributions from each substantial contributor as well as maintain the 
names and addresses of their substantial contributors in their books 
and records in accordance with section 6001 and Sec.  1.6001-1(a) and 
(c) in order to permit the IRS to efficiently administer the internal 
revenue laws through examinations of specific taxpayers. The records 
retained will enable organizations to substantiate upon examination the 
number of certain contributors and the amounts of their contributions 
and, if needed, to address any concerns identified during the 
examination for which the identity of the substantial contributors 
would be relevant.

VI. Rev. Proc. 95-48 and Rev. Proc. 96-10

    In the preamble to the 2019 proposed regulations, the Treasury 
Department and the IRS requested comments on any other grants of 
section 6033 reporting relief announced in past exercises of the 
Commissioner's discretion that should be incorporated into the 
regulations or any other clarifications to reflect statutory changes 
since the original promulgation of Sec.  1.6033-2. In light of the 2006 
amendment to section 6033(a)(3)(B), which proscribes the Commissioner's 
ability to exercise discretion to relieve from filing any organization 
described in section 509(a)(3), the Treasury Department and the IRS 
requested comments on the continued applicability of Rev. Proc. 96-10, 
1996-1 C.B. 138, which relieves from a filing requirement under section 
6033(a) certain organizations that are operated, controlled, or 
supervised by one or more churches, integrated auxiliaries, or 
conventions or associations of churches.
    The Treasury Department and the IRS received five comments 
requesting that the filing exception contained in Rev. Proc. 96-10 be 
incorporated into the regulations or that the Treasury Department and 
the IRS simply refrain from obsoleting Rev. Proc. 96-10. One commenter 
suggested that certain organizations are described in Rev. Proc. 96-10 
and continue to rely appropriately on the filing exception provided in 
that revenue procedure because they are not supporting organizations 
described in section 509(a)(3).
    This Treasury Decision does not incorporate the provisions of Rev. 
Proc. 96-10 into the final regulations. The Treasury Department and the 
IRS continue to study the applicability of Rev. Proc. 96-10, which is 
not withdrawn with the issuance of this Treasury Decision. However, the 
Treasury Department and the IRS note that organizations for which 
public charity status is dependent on being described in section 
509(a)(3) are not eligible to rely on the filing relief provided in 
Rev. Proc. 96-10.
    The Treasury Department and the IRS also requested comments on Rev. 
Proc. 95-48, 1995-2 C.B. 418, which grants reporting relief for 
governmental units and affiliates of governmental units. The Treasury 
Department and the IRS received one comment asserting that reporting 
relief granted under Rev. Proc. 95-48 is inappropriate because a 
government affiliate's decision to seek the benefits of exemption under 
section 501(c)(3) calls for it accepting the burdens of that status as 
well. This Treasury Decision does not incorporate the provisions of 
Rev. Proc. 95-48 into the final regulations and the Treasury Department 
and the IRS continue to consider whether the reporting relief in this 
revenue procedure should be updated.

VII. Technical Corrections

    This Treasury Decision conforms the paragraph structure throughout 
Sec.  1.6033-2 to the current Code of Federal Regulations paragraph 
level structure. Previously, the fourth level of the paragraph 
structure utilized a lower-case letter (e.g., Sec.  1.6033-
2(a)(2)(ii)(a)). This Treasury Decision modifies all fourth level 
letters to be upper-case (e.g., Sec.  1.6033-2(a)(2)(ii)(A)). For 
consistency with these amendments, this Treasury Decision also modifies 
Sec. Sec.  1.401-1, 56.4911-9, and 56.4911-10 to correct certain cross-
references to Sec.  1.6033-2.
    Additionally, throughout Sec.  1.6033-2, this Treasury Decision 
makes certain other non-substantive changes.

VIII. Applicability Dates

    Consistent with the applicability dates in the 2019 proposed 
regulations, the final regulations apply as of May 28, 2020. Pursuant 
to section 7805(b)(7), an organization may choose to apply the 
paragraphs listed in Sec.  1.6033-2(l)(2) to returns filed after 
September 6, 2019.

Effect on Other Documents

    The following publication is obsolete as of May 28, 2020: Rev. 
Proc. 2018-38 (2018-31 I.R.B. 280).

Special Analyses

I. Regulatory Planning and Review

    This regulation is not subject to review under section 6(b) of 
Executive Order 12866 pursuant to the Memorandum of Agreement (April 
11, 2018) between the Department of the Treasury and the Office of 
Management and Budget regarding review of tax regulations.

II. Paperwork Reduction Act

    The collection of information contained in these final regulations 
is reflected in the collection of information for Forms 990 and 990-EZ 
that have been reviewed and approved by the Office of Management and 
Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 
3507(c)) under control number 1545-0047. To the extent there is a 
decrease in burden as a result of this change, the decrease in burden 
will be reflected in the updated burden estimates for Forms 990 and 
990-EZ included in this control number. The requirement to maintain 
records to substantiate information on the Form 990 or 990-EZ is 
already contained in the burden associated with the control number for 
those forms and remains unchanged.
    The paperwork burden estimate for tax-exempt organizations is 
reported under OMB control number 1545-0047,

[[Page 31967]]

which represents a total estimated burden time, including all other 
related forms and schedules for corporations, of 52 billion hours and 
total estimated monetized costs of $4.17 billion ($2017). The burden 
estimates provided in the OMB control number are aggregate amounts that 
relate to the entire package of forms associated with the OMB control 
number, and will in the future include, but not isolate, the estimated 
burden of these regulations. These numbers are therefore unrelated to 
the future calculations needed to assess the burden removed by adoption 
of these regulations. The Treasury Department and the IRS urge readers 
to recognize that these numbers are duplicates and to guard against 
overcounting the burden. No burden estimates specific to these 
regulations are currently available. The Treasury Department has not 
estimated the burden related to the requirements under these 
regulations. The current status of the Paperwork Reduction Act 
submissions related to these regulations is provided in the following 
table.

------------------------------------------------------------------------
             Form                OMB control No.          Status
------------------------------------------------------------------------
990 and related forms.........         1545-0047  Sixty-day notice
                                                   published on 9/24/
                                                   2019. Thirty-day
                                                   notice published on
                                                   12/31/2019. Approved
                                                   by OIRA on 2/12/2020.
                               -----------------------------------------
                                Web address: https://www.irs.gov/forms-pubs/about-form-990.
------------------------------------------------------------------------

    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid OMB control number.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
return information are confidential, as required by 26 U.S.C. 6103.

III. Regulatory Flexibility Act

    It is hereby certified that these final regulations will not have a 
significant economic impact on a substantial number of small entities. 
This certification is based on the fact that these regulations reflect 
statutory requirements and reporting relief previously announced 
through forms, instructions to forms, or guidance published in the 
Internal Revenue Bulletin. The collection of information contained in 
these regulations instead maintains a current recordkeeping obligation 
while removing a filing burden. Accordingly, this rule will not have a 
significant economic impact on a substantial number of small entities 
under the Regulatory Flexibility Act (5 U.S.C. chapter 6). Pursuant to 
section 7805(f), the proposed regulations preceding these final 
regulations were submitted to the Chief Counsel for Advocacy of the 
Small Business Administration for comment on its impact on small 
business, and no comments were received.

Drafting Information

    The principal authors of these regulations are personnel from the 
Office of the Associate Chief Counsel (Employee Benefits, Exempt 
Organizations, and Employment Taxes). However, other personnel from the 
Treasury Department and the IRS participated in their development.

Statement of Availability of IRS Documents

    IRS revenue procedures and other guidance cited in this document 
are published in the Internal Revenue Bulletin (or Cumulative Bulletin) 
and are available from the Superintendent of Documents, U.S. Government 
Publishing Office, Washington, DC 20402, or by visiting the IRS website 
at http://www.irs.gov.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 56

    Public charity excise taxes.

Amendments to the Regulations

    Accordingly, 26 CFR parts 1 and 56 are amended as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority:  26 U.S.C. 7805 * * *


0
Par. 2. In Sec.  1.401-1, revise the last sentence of paragraph (e)(2) 
to read as follows:


Sec.  1.401-1   Qualified pension, profit-sharing, and stock bonus 
plans.

* * * * *
    (e) * * *
    (2) * * * For information required to be furnished periodically by 
an employer with respect to the qualification of a plan, see Sec. Sec.  
1.404(a)-2, and 1.6033-2(a)(2)(ii)(I).

0
Par. 3. Section 1.6033-2 is amended by:
0
1. Revising the section heading;
0
2. In paragraph (a)(2)(ii) introductory text, removing ``The'' and 
adding ``Subject to paragraph (a)(1) of this section, the'' in its 
place;
0
3. Redesignating paragraph (a)(2)(ii)(a) through (l) as paragraphs 
(a)(2)(ii)(A) through (L) respectively;
0
4. In newly redesignated paragraph (a)(2)(ii)(F), revising the first 
and last sentences;
0
5. Revising newly redesignated paragraph (a)(2)(ii)(H);
0
6. Redesignating paragraphs (a)(2)(ii)(K) and (L) as paragraphs 
(a)(2)(ii)(M) and (N);
0
7. Adding new paragraphs (a)(2)(ii)(K) and (L);
0
8. Revising the last sentence of paragraph (a)(2)(iii) introductory 
text;
0
9. Redesignating paragraphs (a)(2)(iii)(a) through (d) as paragraphs 
(a)(2)(iii)(A) through (D) respectively;
0
10. Revising the last sentence of newly redesignated paragraph 
(a)(2)(iii)(B);
0
11. Revising redesignated paragraph (a)(2)(iii)(C);
0
12. Revising the first sentence of newly redesignated paragraph 
(a)(2)(iii)(D)(1);
0
13. Redesignating paragraphs (a)(2)(iv)(a) and (b) as paragraphs 
(a)(2)(iv)(A) and (B) respectively;
0
14. Revising the next to last sentence in paragraph (a)(4);
0
15. Adding paragraphs (a)(5) through (8);
0
16. Revising paragraph (d)(5) introductory text and the last sentence 
of paragraph (d)(5)(ii);
0
17. Revising paragraph (g)(1)(iii);
0
18. Removing ``or'' at the end of paragraph (g)(1)(vi);
0
19. Removing the period at the end of paragraph (g)(1)(vii) and adding 
``; or'' in its place;
0
20. Adding paragraph (g)(1)(viii);
0
21. Revising paragraph (g)(3);
0
22. Adding paragraph (g)(5);
0
23. Adding a sentence at the end of paragraph (g)(6);
0
24. Redesignating paragraph (k) as paragraph (l);
0
25. Adding a new paragraph (k); and
0
26. Revising newly redesignated paragraph (l).

[[Page 31968]]

    The revisions and additions read as follows:


Sec.  1.6033-2   Returns by exempt organizations and returns by certain 
nonexempt organizations.

    (a) * * *
    (2) * * *
    (ii) * * *
    (F) The total of the contributions, gifts, grants, and similar 
amounts received by it during the taxable year, and, in the case of an 
organization described in section 501(c)(3), the names and addresses of 
all persons that contributed, bequeathed, or devised $5,000 or more (in 
money or other property) during the taxable year. * * * For special 
rules with respect to contributors and donors, see paragraph 
(a)(2)(iii) of this section.
* * * * *
    (H) A schedule showing the compensation and other payments made to 
each person whose name is required to be listed pursuant to paragraph 
(a)(2)(ii)(G) of this section during the calendar year ending within 
the organization's annual accounting period, or during such other 
period as prescribed by publication, form, or instructions.
* * * * *
    (K) In the case of an organization described in section 501(c)(3), 
the respective amounts (if any) of the taxes imposed on the 
organization, or any organization manager of the organization, during 
the taxable year under any of the following provisions (and the 
respective amounts (if any) of reimbursements paid by the organization 
during the taxable year with respect to taxes imposed on any such 
organization manager under any of such provisions):
    (1) Section 4911 (relating to tax on excess expenditures to 
influence legislation);
    (2) Section 4912 (relating to tax on disqualifying lobbying 
expenditures of certain organizations); and
    (3) Section 4955 (relating to taxes on political expenditures of 
section 501(c)(3) organizations), except to the extent that, by reason 
of section 4962, the taxes imposed under such section are not required 
to be paid or are credited or refunded.
    (L) In the case of organizations described in section 501(c)(3), 
(4), or (29), the respective amounts (if any) of--
    (1) The taxes imposed with respect to the organization on any 
organization manager, or any disqualified person, during the taxable 
year under section 4958 (relating to taxes on excess benefit 
transactions); and
    (2) Reimbursements paid by the organization during the taxable year 
with respect to taxes imposed under such section, except to the extent 
that, by reason of section 4962, the taxes imposed under such section 
are not required to be paid or are credited or refunded.
* * * * *
    (iii) * * * In providing the names and addresses of contributors 
and donors under paragraph (a)(2)(ii)(F) of this section:
* * * * *
    (B) * * * In such case, unless the organization has actual 
knowledge that a particular employee gave more than $5,000 (and in 
excess of 2 percent if paragraph (a)(2)(iii)(A) of this section is 
applicable), the organization need report only the name and address of 
the employer, and the total amount paid over by the employer.
    (C) Separate and independent gifts made by one person in a 
particular year need be aggregated to determine whether his 
contributions and bequests exceed $5,000 (and are in excess of 2 
percent if paragraph (a)(2)(iii)(A) of this section is applicable), 
only if such gifts are of $1,000 or more.
    (D)(1) Organizations described in section 501(c)(7), (8), or (10) 
that receive contributions or bequests to be used exclusively for 
purposes described in section 170(c)(4), 2055(a)(3), or 2522(a)(3), 
must attach a schedule with respect to all gifts that aggregate more 
than $1,000 from any one person showing the total amount of the 
contributions or bequests from each such person, the specific purpose 
or purposes for which such amount was received, and the specific use or 
uses to which such amount was put. * * *
* * * * *
    (4) * * * Similarly, for purposes of paragraph (a)(2)(ii)(D) of 
this section, the purposes for which a section 4947(a)(1) trust or a 
nonexempt private foundation is organized shall be treated as the 
purposes for which it is exempt. * * *
    (5) Political organizations, as defined by section 527(e)(1), that 
have gross receipts of $25,000 or more for the taxable year (or in the 
case of a qualified State or local political organization, as defined 
in section 527(e)(5), that has gross receipts of $100,000 or more for 
the taxable year) generally must comply with the requirements of 
section 6033 and this section in the same manner as organizations 
exempt from tax under section 501(a), except to the extent that the 
Commissioner may modify such requirements through forms, instructions 
to forms, or guidance published in the Internal Revenue Bulletin as 
appropriate for carrying out the purposes of section 527. For the 
purposes of this section, all references to organizations exempt from 
tax under section 501(a) shall include political organizations referred 
to in section 6033(g), other than those referred to in section 
6033(g)(3) and except to the extent the Commissioner exercises 
discretion under section 6033(g)(4). This discretion may be exercised 
through forms, instructions to forms, or guidance published in the 
Internal Revenue Bulletin. In addition to the reporting requirements 
applicable to organizations exempt under section 501(a), such political 
organizations generally must report the names and addresses of all 
persons that contributed, bequeathed, or devised $5,000 or more (in 
money or other property) during the taxable year.
    (6) Each controlling organization (within the meaning of section 
512(b)(13)) that is subject to the requirements of section 6033(a) 
shall include on its annual return such information required by that 
return regarding--
    (i) Any interest, annuities, royalties, or rents received from each 
controlled entity (within the meaning of section 512(b)(13));
    (ii) Any loans made to each such controlled entity; and
    (iii) Any transfers of funds between such controlling organization 
and each such controlled entity.
    (7) Every organization described in section 4966(d)(1) shall, on 
its annual return for the taxable year--
    (i) List the total number of donor advised funds (as defined in 
section 4966(d)(2)) it owns at the end of such taxable year;
    (ii) Report the aggregate value of assets held in such funds at the 
end of such taxable year; and
    (iii) Report the aggregate contributions to and grants made from 
such funds during such taxable year.
    (8) Every organization described in section 509(a)(3) shall, on its 
annual return--
    (i) List the supported organizations (as defined in section 
509(f)(3)) with respect to which such organization provides support;
    (ii) Specify whether the organization meets the requirements of 
clause (i), (ii), or (iii) of section 509(a)(3)(B); and
    (iii) Certify that the organization meets the requirements of 
section 509(a)(3)(C).
* * * * *
    (d) * * *
    (5) In providing the information required by paragraphs 
(a)(2)(ii)(F), (G),

[[Page 31969]]

and (H) of this section, such information may be provided: * * *
    (ii) * * * A central or parent organization shall indicate whether 
it has provided such information in the manner described in paragraphs 
(d)(5)(i) or (ii) of this section, and may not change the manner in 
which it provides such information without the consent of the 
Commissioner.
* * * * *
    (g) * * *
    (1) * * *
    (iii) Except as provided in paragraph (g)(1)(viii) of this section, 
an organization described in section 501(c) (other than a private 
foundation or a supporting organization described in section 509(a)(3)) 
the gross receipts of which in each taxable year are normally not more 
than $50,000 (as described in paragraph (g)(3) of this section);
* * * * *
    (viii) A foreign organization (described in paragraph (k)(1) of 
this section) or a United States possession organization (described in 
paragraph (k)(2) of this section) (other than a private foundation or a 
supporting organization described in section 509(a)(3))--
    (A) The gross receipts of which in each taxable year from sources 
within the United States (as determined under paragraph (k)(3) of this 
section) are normally not more than $50,000 (as described in paragraph 
(g)(3) of this section); and
    (B) That has no significant activity (including lobbying and 
political activity and the operation of a trade or business, but 
excluding investment activity) in the United States.
* * * * *
    (3) For purposes of paragraphs (g)(1)(iii) and (viii) of this 
section, the gross receipts (as defined in paragraph (g)(4) of this 
section) of an organization are normally not more than $50,000 if:
    (i) In the case of an organization that has been in existence for 1 
year or less, the organization has received, or donors have pledged to 
give, gross receipts of $75,000 or less during the first taxable year 
of the organization;
    (ii) In the case of an organization that has been in existence for 
more than one but less than 3 years, the average of the gross receipts 
received by the organization in its first 2 taxable years is $60,000 or 
less; and
    (iii) In the case of an organization that has been in existence for 
3 years or more, the average of the gross receipts received by the 
organization in the immediately preceding 3 taxable years, including 
the year for which the return would be required to be filed, is $50,000 
or less.
* * * * *
    (5) An organization that is not required to file an annual return 
by virtue of paragraphs (g)(1)(iii) and (viii) of this section must 
submit an annual electronic notification as described in section 
6033(i). See Sec.  1.6033-6.
    (6) * * * This discretion may be exercised through forms, 
instructions to forms, or guidance published in the Internal Revenue 
Bulletin.
* * * * *
    (k) Foreign organizations and United States possession 
organizations--(1) Foreign organization. For purposes of this section, 
a foreign organization is any organization not described in section 
170(c)(2)(A).
    (2) United States possession organization. For purposes of this 
section, a United States possession organization is any organization 
created or organized in a possession of the United States.
    (3) Source of funds. For purposes of paragraph (g)(1)(viii) of this 
section, the source of an organization's gross receipts from gifts, 
grants, contributions or membership fees is determined by applying the 
rules found in Sec.  53.4948-1(b) of this chapter. For purposes of 
paragraph (g)(1)(viii) of this section, the source of an organization's 
gross receipts other than gifts, grants, contributions, and membership 
fees is determined by applying the rules in sections 861 through 865 
and the regulations in this part issued under section 861 through 865. 
For purposes of applying this paragraph (k)(3) regarding United States 
possession organizations, a United States person does not include 
individuals who are bona fide residents of a United States possession.
    (l) Applicability date--(1) Generally. This section applies to 
returns filed on or after January 30, 2020. Section 1.6033-2T (as 
contained in 26 CFR part 1, revised April 2019) applies to returns 
filed before January 30, 2020.
    (2) Paragraphs (a)(2)(ii)(F), (a)(2)(iii)(D)(1), (g)(1)(iii) and 
(viii), and (g)(3) of this section apply to annual information returns 
filed after May 28, 2020. Under section 7805(b)(7) an organization may 
choose to apply the paragraphs listed in this paragraph (l)(2) to 
returns filed after September 6, 2019.

PART 56--PUBLIC CHARITY EXCISE TAXES

0
Par. 4. The authority citation for part 56 continues to read in part as 
follows:

    Authority: 26 U.S.C. 7805 * * *


Sec.  56.4911-9   [Amended]

0
Par. 5. In Sec.  56.4911-9, amend paragraphs (d)(2) and (3) and (d)(4) 
introductory text by removing the language ``1.6033-2(a)(2)(ii)(k)'' 
and adding in its place ``1.6033-2(a)(2)(ii)(M)''.


Sec.  56.4911-10   [Amended]

0
Par. 6. In Sec.  56.4911-10, amend paragraph (f)(1) by removing the 
language ``1.6033-2(a)(2)(ii)(k)'' and adding in its place ``1.6033-
2(a)(2)(ii)(M).''

Sunita Lough,
Deputy Commissioner for Services and Enforcement.

    Approved: May 20, 2020.
David J. Kautter,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2020-11465 Filed 5-26-20; 4:15 pm]
BILLING CODE 4830-01-P