NCCS-GuideStar NASCOnet NCCS-GuideStar NASCOnet E-Filing UpdateE-Filing Update

Feb. 15, 2006Feb. 15, 2006

Why is E-Filing a Priority?Why is E-Filing a Priority?

• Senate Finance Committee focus Senate Finance Committee focus on abuseson abuses

• SFC legislative proposals and SFC legislative proposals and Independent Sector Panel Independent Sector Panel recommendationsrecommendations

• Tsunami, Katrina, Rita, etc.Tsunami, Katrina, Rita, etc.• More public interest, but…More public interest, but…

What Happens Next?What Happens Next?

• Pressure for better more accessible Pressure for better more accessible datadata

• More consequences for More consequences for noncompliancenoncompliance

• More e-filing and e-registration at More e-filing and e-registration at state level state level

Growth in State Growth in State Registrations (2005 est.)Registrations (2005 est.)

• 183,000 charities183,000 charities• 212,000 registrations/renewals212,000 registrations/renewals

– Includes multiple registrations by Includes multiple registrations by same charitiessame charities

• Growth in public charities filing 990 Growth in public charities filing 990 or Ezs averaging or Ezs averaging nearly 5% per nearly 5% per yearyear

E-filing Is Here NowE-filing Is Here Now

• Immediate quality improvementImmediate quality improvement• Data in electronic format, ready for useData in electronic format, ready for use• Mandatory at federal level for “large” Mandatory at federal level for “large”

charities TY 2005 ($100 m. assets)*charities TY 2005 ($100 m. assets)*• Mandatory at federal level for charities Mandatory at federal level for charities

in TY 2006 with $10+ m. assets*, private in TY 2006 with $10+ m. assets*, private foundations*foundations*

• IRS creating system for use by statesIRS creating system for use by states* * Mandatory for organizations must complete 250 “returns”:Mandatory for organizations must complete 250 “returns”:

W-2s + 1099s + 941s + 990sW-2s + 1099s + 941s + 990s

The State of State RegulationThe State of State Regulation

• Half of budgets on collecting Half of budgets on collecting information – few resources left to information – few resources left to regulateregulate

• Support IRS fed-state retrieval Support IRS fed-state retrieval system for e-filed data system for e-filed data

Alternative FuturesAlternative Futures

• I. More paperI. More paper• II. State-specific imaging & registration II. State-specific imaging & registration

systemssystems• III. Our preference: Take advantage of IRS III. Our preference: Take advantage of IRS

Fed-State Retrieval System, NASCOnet XML Fed-State Retrieval System, NASCOnet XML Schema & Backend to build a system that Schema & Backend to build a system that meets federal and multiple state needs!!!meets federal and multiple state needs!!!– Easier for regulators, easier for charities to Easier for regulators, easier for charities to

comply, better datacomply, better data– 32 states require 990 data as well as state forms32 states require 990 data as well as state forms

About GuideStarAbout GuideStar

• Founded in 1984Founded in 1984• More than 20,000 visitors each day More than 20,000 visitors each day

to websiteto website• ““Backbone” of a more efficient Backbone” of a more efficient

sectorsector

About NCCSAbout NCCS

• National Center for Charitable National Center for Charitable Statistics at the Urban InstituteStatistics at the Urban Institute

• Improving nonprofit data and data Improving nonprofit data and data standards since 1980s standards since 1980s

• From Form 990 content & From Form 990 content & instructions to programming for instructions to programming for states to use Fed-state retrieval states to use Fed-state retrieval system system

NCCS and StatesNCCS and States

• With GuideStar & state charities, With GuideStar & state charities, NASCOnet XML schema and data systemNASCOnet XML schema and data system

• Systems to permit states to pick up data Systems to permit states to pick up data from e-filed forms and usefrom e-filed forms and use

• State-specific systems for PA, CO, NY, State-specific systems for PA, CO, NY, MS, MI, and FLMS, MI, and FL

990990 Online Online

• Web-based system for preparing Form Web-based system for preparing Form 990 and e-filing with IRS990 and e-filing with IRS

• More than 8,000 returns createdMore than 8,000 returns created• Find easily at IRS websiteFind easily at IRS website• FreeFree• Immediately improves quality of Immediately improves quality of

reportingreporting• Data in usable formatData in usable format

E-filingE-filing with IRS with IRS

• More software providers each year (7 More software providers each year (7 including CCH & Lacerte (an Intuit including CCH & Lacerte (an Intuit subsidiary)subsidiary)

• Mandatory for larger nonprofitsMandatory for larger nonprofits• Pressure for mandatory for allPressure for mandatory for all• Easing the way for state charity officials Easing the way for state charity officials

with fed-state retrieval systemwith fed-state retrieval system

NASCOnet Fed-State Backend NASCOnet Fed-State Backend SystemSystem

• Designed to meet state needs for Designed to meet state needs for using datausing data

• Database of all Form 990 dataDatabase of all Form 990 data• Select based on criteria determined Select based on criteria determined

by stateby state• Display and print pdf of formDisplay and print pdf of form

NASCOnet Fed-State Backend NASCOnet Fed-State Backend SystemSystem

Filter ReturnsFilter Returns

Display ReturnsDisplay Returns

Display or Print Adobe PDFDisplay or Print Adobe PDF

Attachments -- View, Print, Attachments -- View, Print, Analyze (Info in Database)Analyze (Info in Database)

Pennsylvania: LivePennsylvania: Live

New York & Mississippi: New York & Mississippi: In 2 WeeksIn 2 Weeks

IncreaseIncrease E-filing E-filing

• Add URS as well as state specific Add URS as well as state specific forms (CO, MS, MI, NY, and PA)forms (CO, MS, MI, NY, and PA)

• Add professional fundraiser forms Add professional fundraiser forms (PA, HI)(PA, HI)

Professional Fundraiser Professional Fundraiser Registration: PA & HIRegistration: PA & HI

NCCS Policy InitiativesNCCS Policy Initiatives

• Work with IRS to enforce existing Work with IRS to enforce existing requirements for e-filing and eliminate requirements for e-filing and eliminate 250 return threshold250 return threshold

• Work with the IRS and states to add key Work with the IRS and states to add key items on Form 990 to make it sufficient items on Form 990 to make it sufficient for state charitable renewalsfor state charitable renewals

• Work with states to create a lean Work with states to create a lean Uniform Charity Registration Renewal Uniform Charity Registration Renewal FormForm

E-filing ApproachesE-filing Approaches

• CO – Mandatory e-filing CO – Mandatory e-filing • MI – One year created e-filing MI – One year created e-filing

system for corporate returns; the system for corporate returns; the next year, required e-filingnext year, required e-filing

• MI corporate returns represent 25% MI corporate returns represent 25% of those e-filed with IRS of those e-filed with IRS

• Use of Fed-State Retrieval SystemUse of Fed-State Retrieval System

Fed-State Retrieval SystemFed-State Retrieval System

• Similar to individual tax return Similar to individual tax return system – state IT and dept of system – state IT and dept of revenue already userevenue already use

• Provides data for pickup – then Provides data for pickup – then states have minimal programming states have minimal programming to incorporate into their individual to incorporate into their individual database systemsdatabase systems

New DevelopmentsNew Developments

• NCCS working on development of NCCS working on development of web-based Form 1023 – application web-based Form 1023 – application for tax-exempt status – for IRSfor tax-exempt status – for IRS

• Provides assistance for preparer, Provides assistance for preparer, like like 990 Online990 Online

• Goal is better quality applications; Goal is better quality applications; also usable dataalso usable data

The FutureThe Future

• Electronic submission from the Electronic submission from the beginning -- Form 1023, Form 990, beginning -- Form 1023, Form 990, and Request for Extensionand Request for Extension

• Same forms for state and federal Same forms for state and federal use – easy for charity, easy for use – easy for charity, easy for regulationregulation

• Access to greatly improved usable Access to greatly improved usable data on sectordata on sector

More on E-filing & Form 990More on E-filing & Form 990

• Sign up now for the NASCOnet Sign up now for the NASCOnet Backend SystemBackend System

• Annual meeting on Form 990 – Annual meeting on Form 990 – Spring 2006Spring 2006

• State e-registration systems – State e-registration systems – ongoing!ongoing!