NY Attorney General Suspends Schedule B Collection in Response to U.S. Supreme Court Decision
December 14, 2021
By Ravika Shankar
As of July 30, 2021, the New York Attorney General’s Charities Bureau has suspended its collection of IRS Form 990 Schedule B for charities registered in New York. Charities are no longer required to disclose donor information with their annual filings. This is in response to the U.S. Supreme Court’s decision held in Americans for Prosperity Foundation v. Bonta that a California law requiring charities to submit an unredacted copy of Schedule B of IRS Form 990 was unconstitutional. The Court found that the regulations were not narrowly tailored to any substantial governmental interest and that they placed an undue burden on donors. Any notices that charities received from the Charities Bureau regarding any deficiency due to missing or incomplete Schedule Bs are no longer effective. The Charities Bureau is reviewing the appropriate amendments to their policies, procedures, and forms to comply with the U.S. Supreme Court’s decision.
As discussed in our July 12, 2021 blog, 501(c)(3) organizations must generally provide information on donors who contribute $5,000 or more on Schedule B of their annual filing of Form 990, including Form 990-EZ and Form 990-PF (whichever form is applicable). Several states, including New York, had required organizations registered in their jurisdictions to submit a copy of their Form 990, including a complete and unredacted Schedule B, to their state attorney general. In 2018, the IRS withdrew some donor information requirements, announcing in Revenue Procedure 2018-38 that tax-exempt organizations other than IRC Sec. 501(c)(3) organizations would no longer need to report the names and addresses of donors. This led to numerous organizations challenging this requirement in the courts on First Amendment grounds, and the question reached the Supreme Court in Bonta.
Other states have also responded to the Supreme Court decision. California has announced that they will no longer require the filing of Schedule B as part of the registration and annual reporting requirements. New Jersey has taken a similar route as New York, where the Division of Consumer Affairs will no longer enforce their Schedule B requirements.