NCCS-GuideStar NASCOnet E-Filing Update

1. NCCS-GuideStar NASCOnet E-Filing Update Feb. 15, 2006

2. Why is E-Filing a Priority? • Senate Finance Committee focus on abuses • SFC legislative proposals and Independent Sector Panel recommendations • Tsunami, Katrina, Rita, etc. • More public interest, but…

6. What Happens Next? • Pressure for better more accessible data • More consequences for noncompliance • More e-filing and e-registration at state level

7. Growth in State Registrations (2005 est.) • 183,000 charities • 212,000 registrations/renewals • Includes multiple registrations by same charities • Growth in public charities filing 990 or Ezs averaging nearly 5% per year

8. E-filing Is Here Now • Immediate quality improvement • Data in electronic format, ready for use • Mandatory at federal level for “large” charities TY 2005 ($100 m. assets)* • Mandatory at federal level for charities in TY 2006 with $10+ m. assets*, private foundations* • IRS creating system for use by states * Mandatory for organizations must complete 250 “returns”:W-2s + 1099s + 941s + 990s

9. The State of State Regulation • Half of budgets on collecting information – few resources left to regulate • Support IRS fed-state retrieval system for e-filed data

10. Alternative Futures • I. More paper • II. State-specific imaging & registration systems • III. Our preference: Take advantage of IRS Fed-State Retrieval System, NASCOnet XML Schema & Backend to build a system that meets federal and multiple state needs!!! • Easier for regulators, easier for charities to comply, better data • 32 states require 990 data as well as state forms

11. About GuideStar • Founded in 1984 • More than 20,000 visitors each day to website • “Backbone” of a more efficient sector

12. About NCCS • National Center for Charitable Statistics at the Urban Institute • Improving nonprofit data and data standards since 1980s • From Form 990 content & instructions to programming for states to use Fed-state retrieval system

13. NCCS and States • With GuideStar & state charities, NASCOnet XML schema and data system • Systems to permit states to pick up data from e-filed forms and use • State-specific systems for PA, CO, NY, MS, MI, and FL

14. 990 Online • Web-based system for preparing Form 990 and e-filing with IRS • More than 8,000 returns created • Find easily at IRS website • Free • Immediately improves quality of reporting • Data in usable format

15. E-filing with IRS • More software providers each year (7 including CCH & Lacerte (an Intuit subsidiary) • Mandatory for larger nonprofits • Pressure for mandatory for all • Easing the way for state charity officials with fed-state retrieval system

16. NASCOnet Fed-State Backend System • Designed to meet state needs for using data • Database of all Form 990 data • Select based on criteria determined by state • Display and print pdf of form

17. NASCOnet Fed-State Backend System

18. Filter Returns

19. Display Returns

20. Display or Print Adobe PDF

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

22. Pennsylvania: Live

23. New York & Mississippi: In 2 Weeks

24. Increase E-filing • Add URS as well as state specific forms (CO, MS, MI, NY, and PA) • Add professional fundraiser forms (PA, HI)

25. Professional Fundraiser Registration: PA & HI

26. NCCS Policy Initiatives • Work with IRS to enforce existing requirements for e-filing and eliminate 250 return threshold • Work with the IRS and states to add key items on Form 990 to make it sufficient for state charitable renewals • Work with states to create a lean Uniform Charity Registration Renewal Form

27. E-filing Approaches • CO – Mandatory e-filing • MI – One year created e-filing system for corporate returns; the next year, required e-filing • MI corporate returns represent 25% of those e-filed with IRS • Use of Fed-State Retrieval System

28. Fed-State Retrieval System • Similar to individual tax return system – state IT and dept of revenue already use • Provides data for pickup – then states have minimal programming to incorporate into their individual database systems

29. New Developments • NCCS working on development of web-based Form 1023 – application for tax-exempt status – for IRS • Provides assistance for preparer, like 990 Online • Goal is better quality applications; also usable data

30. The Future • Electronic submission from the beginning -- Form 1023, Form 990, and Request for Extension • Same forms for state and federal use – easy for charity, easy for regulation • Access to greatly improved usable data on sector

31. More on E-filing & Form 990 • Sign up now for the NASCOnet Backend System • Annual meeting on Form 990 – Spring 2006 • State e-registration systems – ongoing!