A section 501(c)(3) organization is generally required to make a copy of its annual information return (Form 990) available for public inspection and copying. Prior to enactment of the Pension Protection Act in August 2006 (PPA), this requirement did not apply to an organization’s Form 990-T for unrelated business income tax (UBIT). However, the PPA extended this public disclosure requirement to Forms 990-T filed by 501(c)(3) organizations after August 17, 2006. To provide guidance on this new requirement, the IRS released Notice 2007-45, the most significant aspects of which include:

The public disclosure requirements now apply to all tax-exempt 501(c)(3) organizations that file a Form 990-T to report UBIT. The requirements also apply to state colleges and universities that have dual status as exempt organizations by virtue of sections 115 and 501(c)(3). However, state colleges and universities that are exempt solely by reason of section 115 are not subject to the public disclosure requirements. In addition, an organization filing a Form 990-T solely to request a refund of the federal telephone excise tax is not required to make that Form 990-T available for public inspection and copying.

The IRS expects to revise the applicable regulations to take account of the changes in the statute. Until those revised regulations are effective, organizations may rely on the following existing rules governing disclosure of Form 990 in order to comply with the new requirements:

• General guidance on making returns available for public inspection is provided in Treasury Regulations §301.6104(d)-1.

• A 501(c)(3) organization making its Form 990-T “widely available” does not need to comply with individual requests for copies of such return, although it must still make such return available for public inspection. This exception requires that the Form 990-T be posted in a format that reproduces the exact image of the return as it was filed with the IRS, for example as a PDF file on the organization’s website.

• There is an exception for requests which an organization believes to be part of a harassment campaign. Based on such belief, an organization may apply for a determination from the IRS that the organization is the subject of a harassment campaign and suspend compliance with the requests, provided that it files the request within ten business days of suspending compliance.

Absent an exception, failure to make a Form 990-T available for public inspection and copying may result in a penalty, payable by the person who fails to comply with the requirement. The penalty is $20 on each person for each day that the failure continues, not in excess of $10,000 on all persons with respect to any one return. Additional penalties may apply for willful failure to comply with the public disclosure requirements or for willfully furnishing fraudulent or false information.