Having been involved with nonprofit organizations for the past several years I was recently asked this question. The answer is a very resounding yes! Nonprofits are required to submit their financial statements and other information to the Internal Revenue Service. Because these organizations are formed under public law they have a requirement to make available their finance information.
If a tax-exempt organization has gross receipts less than $50,000 or less a year they can file an e-Postcard. These would normally be small organizations similar to clubs. Organizations formed under the 501c3 tax code are normally organizations which desire to grow and form something larger. They work to build their organizations and they work to pass the $50,000 a year in donations and fundraisers and thus to file the actual Form 990 or Form 990ez.
Non-Profits have an extra month to file their tax returns. Their taxes are due every year by the 15th day of the 5th month after the close of their tax year. If an organization fails to file taxes for three consecutive years they will automatically lose their tax exempt status. If you are a member of an non-profit organization you should be asking for proof the taxes have been filed. Sometimes Officers and Board of Directors forget (sometimes conveniently) to report these requirements and to share with their membership. If you as a member have asked for a copy of the finances and/or tax return and have either been refused, discriminated against, or ignored there are other avenues.
People can request information from the IRS by writing a letter, including the name of the organization, the year, and the type of tax return requested, and send it to:
Commissioner of Internal Revenue
Attn: Freedom of Information Reading Room
1111 Constitution Avenue, NW
Washington, DC 20224
Additionally, all organizations are formed under state laws. Every organization I have been involved are Missouri Corporations. The Secretary of State is responsible for approving, registering, and ensuring non-profit organizations are in compliance with annual requirements. Furthermore the state of Missouri has statutes which Officers and Board of Directors are responsible for complying. The non-profit statutes are Chapter 355. For example, Chapter 355.231 states, “At the annual meeting, the president and chief financial officer shall report on the activities and financial condition of the corporation”.
So as members of non-profit organizations we all need to ensure financial information is being properly handled and properly recorded. Joan Ellis taught Diana and myself this information from our many years with the Central Auto Racing Boosters. In fact Diana and Joan in Diana’s first year as President of the organization spent time with the Internal Revenue Service to get C.A.R.B.’s finances and tax requirements back in line with IRS requirements. Years later while I was President I worked with Congressman Sam Graves to get things back in order during a period when the organization taxes were not filed on time. So if you have not received financial information from your organization then it is time to ask.