NOM and Tax Disclosure

Over at Slate, Mark Joseph Stern reports that the National Organization for Marriage is refusing to release its IRS Form 990 to a Human Rights Campaign employee, who has unsuccessfully knocked on its door and left an official request under its door several times. As a result, Stern asserts that NOM is “blatantly violat[ing] federal law” and that it appears that “NOM is intentionally neglecting to comply with federal law.”

He may be right, but it’s not completely clear.

First, let’s take as a given that NOM is a horrible organization with terrible goals. Moreover, in the post-Obergefell world, it’s not just a horrible organization: it’s essentially an irrelevant organization. But just because it is a bad organization does not inherently mean that it is flouting federal law. To figure that out, we need to drill down on the law that NOM is purportedly violating.

The Law(s)

There are actually two laws implicated here. The first is that a tax-exempt organization (with a handful of exceptions that don’t apply to NOM) must file an annual information return with the IRS. Among other thing, the return lists revenue and expenditures of the organization, as well as certain highly-paid employees. For calendar-year tax-exempt organizations (including NOM), the return is due on May 15, but they can get an automatic 3-month extension, and they can request an additional 3-month extension. Effectively, then, the return is due November 15 or, if the 15th is a weekend or holiday, the first business day after the 15th.

The second requires a tax-exempt organization to make that return available to the public. It can do so in a number of ways—generally, it must provide access to the return during its ordinary business hours if someone comes in, or provide it within 30 days in response to a written request. Alternatively, it can make the return available online.

The second law is the one that Stern argues that NOM is violating. Clearly, the HRC employee went to NOM’s office during regular business hours, and didn’t get a look at it. Moreover, the 2014 disclosure is not on NOM’s website.

Violating Federal Law?

The thing is, though, that it’s far from clear that NOM is violating the second law. NOM—like other tax-exempt organizations—is required to make its financial disclosure available for three years, starting on the later of the date the return is supposed to be filed or the date it is actually filed. If NOM has not filed its return with the IRS yet, it is not in violation of the disclosure requirement.

That would, of course, put it in violation of the filing requirement, and there are consequences to that violation. Specifically, a tax-exempt organization faces a fine of $20 for every day it files its return late, up to a maximum $10,000 fine. (For exempt organizations with more than $1 million in annual revenue, the daily and maximum fines are bigger.) In addition, a tax-exempt organization that fails to file for three years in a row loses its exemption.

In Conclusion

I know, this seems like a pedantic point to make, and perhaps its only of interest to me. But intentional violation of federal law has a connotation that doesn’t apply here, I don’t think. NOM may be violating the public inspection law, but it’s far from clear.

None of which, of course, validates the underlying goals or actions of NOM. Because I agree that it is a despicable organization. But its despicableness lies in its philosophy and its actions, not in its tax filing status.

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