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No More Identification of Split-Interest Trusts on IRS Form 990
By: Aaron Hershberger
Aaron Hershberger
Senior Manager
Health Care
Cincinnati
513.621.8300
The IRS recently announced that organizations filing Form 990, Schedule R, Related Organizations and Unrelated Partnerships, will no longer have to disclose the name, address or employer identification number of split-interest trusts. The change takes effect beginning with the 2011 tax year.
An exempt organization must make its annual return available for public inspection. Such returns include Form 990, Return of Organization Exempt from Income Tax. Schedule R, which also must be made available for public inspection, is filed with an organization’s Form 990 to provide information on related organizations, on certain transactions with related organizations and on certain unrelated partnerships through which the organization conducts significant activities.
The IRS is changing the reporting requirements to help protect the confidentiality of donors to tax-exempt organizations. Currently, organizations must report several items of information on Schedule R, Part IV, including the name, address and employer identification number of trusts related to the filing organization. Stephen Clarke of the IRS Tax-Exempt and Governmental Entities Division explained that, beginning with the 2011 tax year, an organization with a related split-interest trust will only have to report the type of the trust on Schedule R.
The change is a response to the IRS’ publication of Announcement 2011-36, which sought comments on transitional issues and frequently asked questions involving the redesigned Form 990. Commenters were concerned that disclosure of the names of split-interest trusts could jeopardize donor confidentiality. Many split-interest trusts use the donor’s name when naming the trusts.
For more on how this change could affect your organization, contact your BKD advisor.
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