News and analysis
January 15, 2015

Key Court Victory Closer for IRS Open-Records Activist

The open-records activist Carl Malamud has moved a step closer to winning his legal battle to give the public greater access to the wealth of information on Form 990 tax returns that nonprofits file.

During a hearing in San Francisco on Wednesday, U.S. District Judge William Orrick said he tentatively planned to rule in favor of Mr. Malamud's group, Public. Resource. Org, which filed a lawsuit to force the Internal Revenue Service to release nonprofit tax forms in a format that computers can read. That would make it easier to conduct online searches for data about organizations' finances, governance, and programs.

"It looks like a win for Public. Resource and for the people who care about electronic access to public documents," said Thomas Burke, the group's lawyer.

The suit asks the IRS to release Forms 990 in machine-readable format for nine nonprofits that had submitted their forms electronically. Under current practice, the IRS converts all Forms 990 to unsearchable image files, even those that have been filed electronically.

While the court decision will immediately affect only the nine groups named in the suit­—including the American National Standards Institute, the New Horizon Foundation, and the International Code Council­—Public. Resource. Org sees it as the first step to getting the IRS to revamp the way it makes Forms 990 available to the public.

The lawsuit cited the Freedom of Information Act, which requires government agencies to produce documents in "any form or format requested" if it is "readily reproducible" in that format. The IRS argued that it would be technically difficult to change its process for removing confidential information from Forms 990, like lists of donors. The documents are not "readily reproducible" in machine-readable format, it said, given the "significant additional demand on limited agency resources."

Judge Orrick said he would issue a final order after getting a document that the IRS wanted to correct, which must be submitted within a week.

Send an e-mail to Suzanne Perry.