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

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

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

7. Growth in State Registrations (2005 est.) 183,000 charities183,000 charities 212,000 registrations/renewals212,000 registrations/renewals –Includes multiple registrations by same charities Growth in public charities filing 990 or Ezs averaging nearly 5% per yearGrowth in public charities filing 990 or Ezs averaging nearly 5% per year

8. E-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” charities TY 2005 ($100 m. assets)*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*Mandatory at federal level for charities in TY 2006 with $10+ m. assets*, private foundations* IRS creating system for use by statesIRS 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 regulateHalf of budgets on collecting information – few resources left to regulate Support IRS fed-state retrieval system for e-filed dataSupport IRS fed-state retrieval system for e-filed data

10. Alternative Futures I. More paperI. More paper II. State-specific imaging & registration systemsII. 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!!!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 1984Founded in 1984 More than 20,000 visitors each day to websiteMore than 20,000 visitors each day to website “Backbone” of a more efficient sector“Backbone” of a more efficient sector

12. About NCCS National Center for Charitable Statistics at the Urban InstituteNational Center for Charitable Statistics at the Urban Institute Improving nonprofit data and data standards since 1980sImproving nonprofit data and data standards since 1980s From Form 990 content & instructions to programming for states to use Fed-state retrieval systemFrom 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 systemWith GuideStar & state charities, NASCOnet XML schema and data system Systems to permit states to pick up data from e-filed forms and useSystems to permit states to pick up data from e-filed forms and use State-specific systems for PA, CO, NY, MS, MI, and FLState-specific systems for PA, CO, NY, MS, MI, and FL

14. 990 Online Web-based system for preparing Form 990 and e-filing with IRSWeb-based system for preparing Form 990 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 reportingImmediately improves quality of reporting Data in usable formatData in usable format

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

16. NASCOnet Fed-State Backend System Designed to meet state needs for using dataDesigned to meet state needs for using data Database of all Form 990 dataDatabase of all Form 990 data Select based on criteria determined by stateSelect based on criteria determined by state Display and print pdf of formDisplay 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 URS as well as state specific forms (CO, MS, MI, NY, and PA) Add professional fundraiser forms (PA, HI)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 thresholdWork 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 renewalsWork 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 FormWork with states to create a lean Uniform Charity Registration Renewal Form

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

28. Fed-State Retrieval System Similar to individual tax return system – state IT and dept of revenue already useSimilar 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 systemsProvides 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 IRSNCCS working on development of web-based Form 1023 – application for tax-exempt status – for IRS Provides assistance for preparer, like 990 OnlineProvides assistance for preparer, like 990 Online Goal is better quality applications; also usable dataGoal is better quality applications; also usable data

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

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