Recently, witnesses testified before the U.S. House Ways and Means Committee about modernizing IRS Form 990, an annual informational return used by nonprofits. One expert suggested boosting transparency by revising the form to include questions about donor-advised funds, foreign operations and pass-through funding. Another recommended requiring nonprofits to provide Employer Identification Numbers to help track funding sources. Also discussed was the risk involved in fiscal sponsorships (where tax-exempt organizations sponsor projects by non-tax-exempt groups). Witnesses agreed that Form 990 should ask nonprofits to list sponsored projects and associated revenues, expenses and assets.
