March 29, 2021
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|Lawyers Alliance for New York State|
If this bill doesn’t pass soon:
The NY Department of State (DOS) may require approximately 6,700 NY nonprofits with a calendar year fiscal year to file their FY2020 annual financial report by May 15 of this year.[i]
A new law requires many nonprofits that already file an annual financial report and IRS 990 with the Charities Bureau to file those same documents with DOS. According to DOS’ website, covered nonprofits must file their annual financial report and IRS 990 by the 15th day of the 5th month after the end of their fiscal year. This is 6 months earlier than the IRS requires, and a year earlier than current Charities Bureau requirements.
DOS’ deadline appears to be a misreading of the law, which allows the Charities Bureau to extend the deadline for all annual financial reports.[ii]
The confidential donor information of approximately 11,000 NY nonprofits will be at risk.[iii] While most of a 501(c)(3) organization’s federal tax filing is already publicly available on the IRS and Charities Bureau websites, the IRS and Charities Bureau strictly maintain the confidentiality of the names and addresses of major donors reported on the 990 Schedule B. DOS has not explained what steps it will take to keep this information confidential.
S.4817/A1141 would require DOS to keep this information confidential and would make clear that donors’ identities should not be disclosed under the Freedom of Information Law (known as FOIL).
For more information about the new, redundant nonprofit filing requirements see Lawyers Alliance’s Legal Alert, New NY Department of State Reporting Requirements Effective January 1, 2021.
[i] This number represents the NY nonprofits that are listed in the IRS’ Exempt Organization Business Master File as having a calendar year fiscal year, being classified as a public charity because they are publicly supported, and having annual revenue of $250,000 or more. These organizations are likely to be required to file an annual report with the Department of State under Executive Law 172-b. The total number of affected organizations will be much higher, because many nonprofits located outside of NY will also be required to file.
[ii] Exec. Law 172-b.
[iii] This number represents the NY nonprofits that are listed in the IRS’ Exempt Organization Business Master File as being classified as a public charity because they are publicly supported, and having annual revenue of $250,000 or more.