As Americans scramble to make their year-end charitable contributions, they may have to do so without a key tool for understanding how those charities spend their money: their most recent tax forms.
According to a ProPublica review of public IRS data, which powers our Nonprofit Explorer database, the agency is behind on releasing nearly half a million tax records, known as Form 990s, for tax-exempt organizations. The delays, which began two years ago, are stymying access to key financial information that governments, the public and grantmakers use to evaluate the nation's tax-exempt companies.
The gap in reporting has become so profound that state charitable enforcement officers are sounding the alarm. In November, the National Association of State Charity Officials sent a letter urging the IRS to address backlogged 990 data releases.
"For charity regulators, the Form 990 series not only helps ensure transparency and accountability, but also provides vital information for state investigations into potential fraud and misuse of charitable resources," the organization wrote. "It is critical that the availability of that data be timely."
The filings, which tax-exempt organizations must submit annually, detail how organizations have carried out their public-interest mission and disclose executive pay, as well as grantmaking and fundraising activities.
These documents provide insight into a key sector of the U.S. economy, one that employs more than 12 million Americans.
"It's a big aspect of our economy," said Carl Malamud, a technologist whose organization, Public.Resource.Org, brought a lawsuit in 2015 that originally prompted the IRS to release the 990 data. "It's one of the major sectors, and without those Form 990s, you can't have an efficient market."
Nonprofit organizations perform many core social service roles in the U.S., including medical institutions like St. Jude Children's Research Hospital, disaster relief organizations like the Red Cross, aid networks like Feeding America and the National Alliance to End Homelessness, as well as advocacy organizations like the National Rifle Association or the American Civil Liberties Union.
The filings can help people assess the operations of an organization before making a financial donation. And they can help regulators and journalists to uncover wrongdoing like misuse of funds at the Trump Foundation or a bribery and kickback scheme at a major operator of New York City homeless shelters.
"This is having an impact on nonprofits, fundraising, donors ... and charity regulators," said Cinthia Schuman Ottinger of the Aspen Institute, who coordinates a group of practitioners who work with nonprofit tax data (ProPublica is a part of this group). "The whole ecosystem suffers when there are delays of this kind."
Michael Thatcher, the CEO of Charity Navigator, said the end of the year is a crucial time for charitable giving.
"Now's when people really need it and want it," said Thatcher of the information disclosed in 990 filings. His company uses the data to provide ratings that help potential donors vet organizations.
And, he said, "it's not just the donors that are upset by this." Many organizations want their latest information out there as well, especially if their finances have improved or they've done significant work in recent years. "They want to show that to the world, and guess what, when you go to Charity Navigator, you're seeing two-year-old information."
Many of the missing filings could help shed light on how organizations — and the nonprofit sector as a whole — have fared during tumultuous years marked by a pandemic, economic upheaval and large infusions of federal relief dollars.
Courtney Aladro, a charity regulator for the Massachusetts attorney general and NASCO board member, said that regulators across the country use the IRS repository of documents to confirm or corroborate the information that charities submit to their states. Recent holdups make it harder to access that information, and the delays ramped up just as the agency would typically be releasing filings that shed light on how organizations operated in 2020 and 2021.
"Those are some pretty important years because of some of the difficulties over the last few years," Aladro said. "The use and expenditure of COVID relief funds, for example. It's pretty important for charity regulators and law enforcement to monitor that, and not having that information will make it more difficult."
In a statement, the IRS said it is "making progress" and aims to resume posting the information soon. "This is an important tool, and the IRS is committed to keeping information up to date on the site to help taxpayers and others who use the data," a spokesperson said. The agency noted that its organization search does show up-to-date information on whether a charity is currently eligible to receive tax deductible donations.
The agency began releasing machine-readable data files for Form 990s in 2015, after the lawsuit won by Malamud. In the years since, an ecosystem of tools and documentation has grown up around the 990 data sets, powering more advanced tools and resources for the public to inspect the finances and other operations of nonprofits.
The IRS posted the information on a monthly basis to a public Amazon storage account for years, but amid COVID-19-era staffing struggles, updates began to lag. Then, in November 2021, the IRS announced it would begin publishing the information on its own website. Since then, the agency has not just fallen further behind but even uploaded several hundred thousand nonpublic forms by accident not just once, but twice. Three months after the agency notified Congress of the first mistake, downloads for some 2021 and 2022 files reappeared on the IRS' download page on Nov. 30. After this reporter notified the agency that the page still contained nonpublic documents, the files were removed once again. The agency blamed this second release on a contractor, Accenture Federal Services, which it said is responsible for posting the documents to the IRS website.
Neither Accenture Federal Services nor its parent company, Accenture, responded to a request for comment.
The IRS has not only taken heat for the disclosure of those forms, but also from Republicans who have attacked the agency over ProPublica's use of tax information for a series of stories that showed how the wealthy avoid taxes.
The IRS has faced repeated budget cuts over the past decade, and it has struggled with backlogs in all types of tax returns since 2020. In a letter to Congress in June, the Treasury Department pointed to historic staffing shortages: "The IRS has been stretched thin at a time when its workforce, already depleted to 1970s levels, has been battling personal and familial health challenges posed by the pandemic."
This year's Inflation Reduction Act allocates $80 billion to the IRS over the next decade to boost enforcement, operations, taxpayer services and modernization of technical systems.
"We understand that there have been staffing shortages, the pandemic has caused problems, but we do have to wonder if the posting of 990 data to the public are being given the priority they deserve," Schuman Ottinger said.
The delays have prompted private companies to try to collect this information on their own, doing an end run around the IRS' unreliable systems. Both Charity Navigator and Candid, another platform that provides 990 information, have built systems for nonprofits to send their forms directly to the companies. So far the organizations that have done that are "in the hundreds, not the thousands," Thatcher said.
The prolonged delays even drove one company to shut down. In September, Open990.org, which offered a nonprofit organization search tool and downloadable data sets for things like executive compensation and hospital finances, announced it was closing its doors. In its farewell message, the organization cited prolonged delays and inaccuracies in data released by the IRS.
David Borenstein, who was Open990's chief technology officer, said as data releases and updates slowed, the small organization was receiving large volumes of complaints and requests to update or correct information, beyond what it could keep up with.
"The lack of data undercuts a critical accountability mechanism for organizations seeking tax exemption," he wrote.
Borenstein said he doesn't fault the IRS, though. "Their budget has been cut to the bone, and they are unable to perform many responsibilities that are vital to the national interest."
