Saturday, July 12, 2014

Why we can't find Form 990 tax returns for non-profit corporations on the Internet anymore

Public.Resource.Org has taken down all its Form 990s for non-profits because the IRS won't redact social security numbers from the documents it sells.

Here's what you see on a page where you used to find the Form 990 of a non-profit:

Public access to this database of Exempt Organization filings has been terminated due to inaction by the U.S. Congress and the Internal Revenue Service.

We apologize for any inconvenience.

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7 Frequently Asked Questions About the Sequestration of the Form 990 Database

Question 1: I'm outraged! To whom may I complain?

Public.Resource.Org is not accepting complaints at this time. Here are two places you can reach out to:
  • The IRS refuses to talk to us and we're assuming they'll refuse to talk to you as well. However, they work for the President and he can be reached at (202) 456-1414 or @whitehouse on twitter.
  • You can also write your Congressman. The most active on IRS issues has been Chairman Darrell Issa who can be reached at (202) 225-5074 or @DarrellIssa on twitter.

Question 2: What was this service before it was terminated?

Public.Resource.Org purchased over 2,000 DVDs from the Internal Revenue Service containing the annual information filings of Tax-Exempt Organizations, the Form 990. The IRS distributes this data as a series of 1-page low-resolution TIFF images, with 60,000 images per DVD. The DVDs are sent monthly.
Public.Resource.Org has processed 7,634,050 of these filings into PDF files and made them available on the Internet using Secure HTTP, FTP, and rsync protocols. There were no restrictions on use and no charge for the service. We have offered repeatedly to donate the system to the IRS.

Question 3: What is the IRS doing wrong?

There are 3 big problems with how the IRS handles this database:
  • Selling DVDs for $2,910 per year as a way of distributing an important database is ridiculous in this day and age. The data should be distributed in bulk on the Internet and these important public filings should (indeed must!) be made available on a government web site with a permanent URL and secure HTTP service.
  • Large organizations all e-file their returns, but the IRS deliberately dumbs down those returns by imaging the data onto a form and releasing it as a low-resolution bitmap. They do this do avoid “too much transparency.” Despite a number of meetings at the White House to get the IRS to release the data as machine-processable data as the President has ordered, the IRS has refused to comply. We are now in court to compel the release of this data.
  • There are a large number of Social Security Numbers in the Form 990 database. We have cleaned up many of those privacy breaches and our colleagues at other services such as GuideStar have done the same, but the IRS refuses to act and continues to sell this tainted data in violation of the law.
In addition to the 3 technical issues, there is an attitude problem. Despite a huge number of detailed and constructive notices sent to the IRS, they refuse to talk to us or to anybody else.

Question 4: Why are you terminating public access to this database?

We cannot continue to fix this database, redacting privacy information and providing better public access, if the IRS continues to break it. We redact Social Security Numbers, but the IRS continues to sell this data. This is unconscionable.
We were particularly outraged when we saw the Congress and the IRS finally start paying attention to privacy issues, but only in the context of a few dozen political operatives while ignoring privacy breaches that affect hundreds of thousands of schoolchildren, veterans, homeowner associations, fraternal organizations, local fire departments, and community volunteers.

Question 5: What must the IRS and the Congress do to fix this database?

There are 3 things the government must do:
  • Instead of selling bulk data on DVDs, the government needs to move towards an on-line distribution at no charge. This is how we distribute patents, SEC data, the Official Journals of government, and other crucial public databases. After the government has fixed the bulk data distribution issues, they should provide an on-line service that has individual Form 990s on a secure HTTP connection so citizens can access these public filings from a trusted source.
  • The government must release e-file data. This is required by law, the forms are meant for public inspection, and there is a crying need to access this information in a better way. The Congress and the President have required by law that the Form 990s be made available to make our nonprofit sector function more effectively and deliberately dumbing down the data is a thumb in the nose of the law.
  • The government must fix the privacy problems. The existing database should be scanned for Social Security Numbers and they must be redacted. Individuals whose privacy has been breached by the IRS must be notified. The IRS must scan incoming returns and look for SSNs and refuse to accept those returns when they find them. The IRS must provide a point of contact to accept notifications of privacy breaches discovered by individuals or institutions.

Question 6: What will Public.Resource.Org do?

Public.Resource.Org will continue to scan each monthly feed of DVDs and notify individuals, organizations, the IRS, and Congress of privacy breaches. In addition, we will continue our lawsuit and will pursue any administrative or legislative measures available to compel release of the e-file data.

Question 7: Why should I care?

If you work in the nonprofit sector, as a foundation executive or charity watchdog, you should be outraged by this situation. If you are a government law enforcement official, such as a state Attorney General, the IRS is making your job harder by not making this crucial information available. If you operate an Internet service such as LinkedIn or Google (or any startup that wants to be LinkedIn or Google) you should be outraged that this information was available in machine-processable format and the government deliberately dumbs it down.
The people that should care the most are the ones that have been ignoring the situation. Distribution of protected information by federal employees is a crime under 26 USC 6103. As the IRS well knows, indviduals could sue the IRS for $1,000 per viewing. Think about that. There are over 100,000 SSNs we've discovered in this database, we know that at least 9 customers purchase the database. Instead of organizing a $1 billion lawsuit against the government, we've spent two years building a better system and trying to help the government fix their systems.
The people that should care about this are the officials in the White House who have written and promulgated important new policies about the distribution of government data only to see the IRS ignore them. The people that should care are the members of Congress who mandated the Form 990 so our nonprofit sector could function more effectively. The people that should care are the IRS employees that are being exposed to criminal penalties for deliberately distributing protected information.
We should all care about this important database. I hope you will ask the Congress and the Administration to pay attention.
Carl Malamud
June 16, 2014