Expanding Form 990 IRS Disclosures can Reduce Antisemitism on College Campuses

Form 990 is a document that certain nonprofit organizations in the United States are required to file with the Internal Revenue Service (IRS) on an annual basis. It is used to provide information about an organization’s activities, governance, finances, and compliance with federal tax laws. Form 990 serves as a key tool for transparency and accountability in the nonprofit sector, allowing stakeholders such as donors, government agencies, and the public to assess a nonprofit’s operations and financial health.

Publicly traded companies file a more comprehensive annual report (Form 10-K) to the Securities and Exchange Commission (SEC) that provides a detailed overview of the company’s financial performance and business operations over the past fiscal year. Form 10-K is a critical document for investors, analysts, and regulators, offering an in-depth view of the company’s activities, financial health, and potential risks.

Since its inception the SEC has evolved its disclosure rules to encompass a broader range of information beyond traditional financial metrics. This shift recognizes the growing importance of non-financial factors in assessing a company’s overall health and risk profile. The IRS, on the other hand, does not significantly update its disclosure requirements to incorporate a meaningful collection of nonfinancial metrics, particularly as it relates to how often a non-profit organization might interface with the Department of Justice (DOJ).

The differences in disclosure rules between the IRS and the SEC stem from their distinct regulatory goals, target audiences, and the nature of the entities they oversee. In this context, the IRS focuses on ensuring tax compliance and the proper use of funds by tax-exempt organizations, requiring limited but essential information. In contrast, the SEC aims to protect investors and maintain fair and efficient markets, necessitating extensive disclosures to provide a comprehensive view of a public company’s financial health, risks, and operations.

However, expanding IRS disclosure rules to disclose compliance with Title VI of the Civil Rights Act of 1964 (Title VI) and the Equal Protection Clause of the Fourteenth Amendment (Equal Protection Clause) can be justified by several key considerations that align with broader goals of transparency, accountability, and social responsibility. Expanding IRS disclosures associated with these components of law can and will drastically reduce antisemitism.

Aligning Non-Profit Accountability with Public Expectations:

Just as the SEC has expanded disclosure requirements to address non-financial risks and compliance with various laws, the IRS can enhance its oversight by requiring non-profit educational institutions and their grantors to disclose compliance with both Title VI and the Equal Protection Clause. This would ensure that these institutions adhere to federal anti-discrimination laws, thereby promoting a safer and more inclusive environment for all students.

Increased transparency about how nonprofit organizations handle Title VI compliance can enhance public trust in educational institutions. Furthermore, donors, students, and the broader community have a vested interest in knowing that these institutions are committed to protecting civil rights.

Enhancing Transparency and Accountability:

In the same manner the SEC mandates reporting on material cybersecurity incidents or how technology companies must disclose how they handle reports of harmful content or behavior affecting children, the IRS should require non-profit educational institutions to report incidents of discrimination and harassment based on race, color, or national origin. This includes reporting mechanisms, response times, and the effectiveness of enforcement actions against violators of community guidelines. The IRS could require detailed reporting on how these issues are addressed.

Promoting Social Responsibility and Ethical Governance:

Educational institutions should disclose their policies, training programs, and governance structures aimed at preventing discrimination. This would mirror the SEC’s requirements for companies to report on their cybersecurity and anti-corruption measures. The IRS would be encouraging institutions to report on their efforts to foster an inclusive culture, such as initiatives to promote diversity and inclusion, changes in hiring practices, and support programs for marginalized students.

Protecting Vulnerable Populations:

Expanding disclosure rules to include Title VI compliance would help protect students who are vulnerable to discrimination. This aligns with the SEC’s focus on protecting vulnerable populations such as children from exploitation and ensuring corporate accountability. Transparency about how institutions allocate resources to prevent and address discrimination can help ensure that sufficient attention and funding are directed towards protecting student rights.

Leveraging Public Disclosure for Improvement:

Perhaps the best outcome of public disclosure is the ability to benchmark against peers. This would encourage institutions to adopt best practices and improve their anti-discrimination policies. Increased transparency allows stakeholders, including students, parents, and advocacy groups, to hold institutions accountable, driving continuous improvement in campus safety and inclusiveness.

Supporting Federal Oversight and Enforcement:

Finally, enhanced IRS disclosures can support the efforts of other federal agencies, such as the Department of Education’s Office for Civil Rights, by providing additional data on institutional compliance with Title VI. Comprehensive disclosure requirements can help create a more holistic oversight framework, ensuring that non-profit educational institutions are held to high standards in all aspects of their operations, including civil rights compliance.

Expanding IRS disclosure rules on Form 990 to include detailed information on anti-discrimination efforts, particularly as it relates to Title VI and the Equal Protection Clause would significantly enhance the transparency, accountability, and social responsibility of tax-exempt educational institutions. This expansion would align with broader regulatory trends, promote ethical governance, protect vulnerable populations, and leverage public disclosure for positive change. By adopting these enhanced disclosure requirements, the IRS can ensure that educational institutions not only comply with federal anti-discrimination laws but also actively contribute to creating inclusive and equitable environments for all students and staff, particularly Jewish students on college campuses.

About the Author
Throughout my professional career, I have held several senior accounting and finance related roles at multiple, innovative publicly traded and privately held technology companies. I have a strong background in leadership, compliance and M&A, along with a strategic mindset, which has enabled me to lead teams through leveraged buy-outs, transactions and other transformation initiatives. I have an MS/MBA in Professional Accounting from Northeastern University and a BS from New Jersey Institute of Technology in Engineering Science. I have been a Certified Public Accountant (CPA), since 2004.
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