1. NCCS-GuideStar NASCOnet E-Filing Update
May 3, 2006

2. State Charity Registration
212,000 registrations/renewals
Includes multiple registrations by same charities
16% of returns are from multi-state filers
Only 4 states with registration/renewal requirements do NOT use the 990
84% of state registrations and renewals are in states that REQUIRE or ACCEPT the Form 990
Growth in public charities filing 990 or EZs averaging nearly 5% per year
OLD TEXT:
State officials estimate that approximately 10% of forms are from 1st time registrants
Thirty-four states accept the URS but 15 of them have supplemental forms
Twenty states required audited financial statements

3. IRS E-filing Is Here Now
Mandatory at federal level for “large” charities this year ($100 m. assets)* -- 3,000 organizations affected
Mandatory at federal level for charities next year with $10+ m. assets*, private foundations* -- 7,000+ organizations affected
IRS has created Fed-State Retrieval System for use by states
More software providers each year (7 including CCH & Lacerte (an Intuit subsidiary)
Nearly SEVEN THOUSAND 990s, EZ’s, and extensions received last year.
2,227 returns filed to date this year.
* Mandatory for organizations must complete 250 “returns”: W-2s s + 941s + 990s

4. Nonprofit E-Filing Chronology
July 1999 – NCCS began e-filing pilot project with IRS & states
Feb – IRS goes live with e-filing 990s; NCCS launches 990-EZ Online
July 2004 – NASCOnet XML SuperSchema Project launched with GuideStar
Feb – NCCS launches 990 Online
Jan – IRS requires largest orgs to e-file, implements Fed-State Retrieval System

5. Current Status
New NCCS 990 Online infrastructure supports multiple states, state-only filings, Fed-State Retrieval System & more
NASCOnet Fed-State Backend System for State Charity Offices
Completed web services system for receipt of 990s & state forms
Completed system for sending receipts & acknowledgements
Next steps: complete testing, complete PDF & database generation
We have completed work on Penn., New York, & Mississippi systems; Colorado nearing completion
Ready to proceed adding states at a much faster pace!

6. Streamlining the Process of Adding More States
Create NASCOnet XML schema (if not already done) (12-24 hours)
Create XML to generate web pages for state forms (50 hours)
Create PDF versions of state forms and XML-to-PDF crosswalk so printed forms can be created (10-20 hours)
Work with state to define payment options, “business rules” for acceptance & rejection of forms, transmission methods & integration with existing state systems
Install NASCOnet Fed-State backend
If needed, customize system for integrating e-filed data into existing state database

7. Alternative Futures
More paper – ½ of state charity offices’ budgets spent on processing paper
State-specific imaging & registration systems
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
Immediate quality improvement
Data in electronic format, ready for use

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

9. 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

10. How Information Flows in IRS Fed-State System
Charity or Tax Preparer
Using commercial tax prep software (CCH, Intuit, etc.) or NCCS Online tax prep. systems
IRS
Fed-State Retrieval XML (commercial) XML & PDF & some State Forms (NCCS)
State Charity Office 1. Standard XML  2. Standard Access/SQL Server tables  3. State custom registration mgt database
NCCS
State forms XML & PDF forms

11. How Information Flows within the State Charity Office
NASCOnet Back-End 1. Receives standard XML 990 data from IRS
2. Converts to standard Access/SQL Server tables 3. Manage & send receipt & acknowledgement messages back through IRS to preparers
Customization (Optional)
1. . Convert either XML or standard database to SCO database
Add log entries
Add or update annual data
Update (or add if accepting NEW registrations)
Current Charity Office Registration Database 1. Entity data (org. name, address, etc.) 2. Annual data (financial, fundraising, etc.) 3. Transaction logs (payments due & received, correspondence, etc.)
Standard 990 Database Use any of fields in database to identify missing registrants, professional fundraising activities, etc.

12. 990 Online: A “TurboTax” for Nonprofits
Web-based system for preparing Form 990 and e-filing with IRS
More than 10,000 returns created, 4,000 transmitted – nearly 1/3rd of IRS 990, EZ & extension forms
Free and easy to use
Drop-down menus, calendars for selecting items & dates
Program takes care of all arithmetic
Verifies that all required items are included
Context-sensitive links to IRS help and expert tips
No duplication of entries: Questions are asked only once
ADDITIONAL CONTENT:
Generates an Adobe PDF for easy printing, saving
Electronically file with the IRS
Secure
Import common schedules from Excel
Data in usable format
Saves data from year-to-year

14. 990s, EZs, Extensions… Import Information from Last Year’s Return

15. Does All Arithmetic, Ensures Completeness

16. Print, E-File, or Both

17. 990 Online & State Systems
Fully integrates with state forms
State forms populated from 990 data
States can choose to receive:
990s only
“Linked” 990s & state forms
State forms only If a state is willing, it can permit e-filed state forms only…and our system does NOT require the charity to create the 990.

18. State Registration Online Capabilities

19. Sample Mississippi Page

20. Sample New York Pages

21. Sample New York Page with Context-Specific Help

22. Sample Pennsylvania Page

23. Sample Colorado Page

24. 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
Accept data from NCCS AND any other transmitter (CCH, Intuit, etc.)

25. NASCOnet Fed-State Backend System

26. Filter Returns

27. Display Returns

28. Display or Print Adobe PDF

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

30. Professional Fundraiser Registration: Pennsylvania & Hawaii

31. NCCS Policy Work
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

32. State Approaches to E-filing
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

33. 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

34. New Developments
Provides assistance for preparer, like 990 Online

35. The Future
NCCS working on development of web-based Form 1023 – application for tax-exempt status – for IRS
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

36. More on E-filing & Form 990
Check out 990 Online at
Sign up now for the NASCOnet Backend System
Sign up for us to help you build a state e-filing system