The American Institute of CPAs (AICPA) has requested the Internal Revenue Service (IRS) provide further guidance specifically related to the use of Form 8050 to direct funds associated with certain returns filed by exempt organizations. The AICPA’s letter asks that Form 8050 be modified to indicate that the form is not included in copies of a return made available for public inspection.
Form 8050, Direct Deposit of Tax Exempt or Government Entity Tax Refund, was introduced to facilitate the implementation of Executive Order 14247, “Modernizing Payments To and From America’s Bank Accounts.” The AICPA’s recommendation is based on Form 8050 not addressing a significant privacy concern for exempt organizations which are generally required to make Form 990-PF, Form 990-T and other returns available for public inspection.
Because the AICPA feels this creates uncertainty as to whether Form 8050 could inadvertently be included in publicly disclosed copies of those returns, the following recommendation was made:
- The IRS should modify Form 8050 and related instructions to state that the exempt organizations are exempt from including it with the copy of their filed tax return subject to public inspection.
The affected forms include:
- Form 990-T, Exempt Organization Business Income Tax Return,
- Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation,
- Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the Internal Revenue Code, and
- Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.
“Clarification would provide certainty to taxpayers and practitioners, facilitate compliance with the order’s requirements and address potential public inspection concerns associated with collecting banking information from exempt organizations,” says Scott Klein, Senior Manager, AICPA Tax Policy & Advocacy. “Creating this safeguard to protect taxpayer information helps safeguard sensitive direct deposit and banking information from unnecessary public access.”
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Tags: exempt, Income Taxes, IRS, tax exempt
