In June of 2013, Malamud, through his nonprofit, sued the IRS after the agency denied his request for IRS Form 990 tax records filed electronically by nine tax-exempt nonprofit organizations. The IRS retains these forms in Modernized e-File (“MeF”) format. The MeF format is the electronic filing system for nonprofit organizations. According to the IRS, “MeF is a web-based system allowing electronic filing through the Internet,” and it “uses the widely accepted eXtensible Markup Language (XML) format, a standardized way of identifying, storing and transmitting data.”
Public.Resource.Org requested that the IRS produce various nonprofit organizations” tax returns in MeF or other machine readable format. The IRS, however, denied the request on the ground “established IRS procedure” requires them to be obtained instead in non-MeF format through a “Request for Public Inspection.” The lawsuit claims that there is no technical or legal reason that the IRS cannot produce Form 990s for nonprofits in MeF format. Furthermore, Public.Resource.Org claims that non-MeF versions offered by the IRS “are far less useful than the MeF versions.”
California Court Likely to Rule in Plaintiff’s Favor
Last week, U.S. District Court Judge William H. Orrick, of the Northern District of California, who is presiding over the lawsuit, stated that he “intends to rule against the IRS and in favor of plaintiff Carl Malamud” and his company.
In response to the judge’s decision, Malamud said he is “totally gratified.” Malamud believes the release of Form 990s in their machine-readable format will help “researchers, analysts, and entrepreneurs to understand the tax-exempt sector better and to create information tools and services to meet the needs of the sector.”
Malamud, however, recognizes it could be premature to celebrate because the IRS can appeal the decision once the judge issues his formal order. The IRS did not provide any comment to the judge’s ruling last week.
Contact a California Tax Attorney
Janathan L. Allen, APC’s California tax attorneys have extensive experience advising domestic and foreign clients on a broad range of tax matters. From preparing tax returns to working with the IRS on audits, our California tax attorneys can help you protect your personal and business interests.
If you are seeking an experienced tax law attorney in San Diego County, Los Angeles County, Orange County or elsewhere in Southern California, talk to us. We offer a free initial consultation.