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Data Extraction

1. What Is The Modernized E-File (MEF) Format?

Private individuals, corporations, and exempt organizations all have the option of e-filing their tax return using the Modernized e-File program. In addition, very small organizations may file an e-Postcard with the IRS in lieu of filing out a traditional Form 990.

Filing with the MEF format is required for organizations that have more than $10 million in total assets and file more than 250 returns in a calendar year. Total filings including, in addition to the Form 990, other reports to the IRS such as employment tax, excise tax, and other documents. Smaller organizations have the option of e-filing but are not required to do so.

When the IRS releases tax returns for public inspection, they image the MEF data received onto a form and release that, just like a scanned return, as a TIFF page. In non-technical terms, the IRS prints the electronic data onto a form and then takes a picture of it. An example of such a return is the 2008 Form 990 submitted by the President and Fellows of Harvard College. Notice the MEF indicator at the top of the form that says "efile GRAPHIC print - DO NOT PROCESS." Wouldn't the report detailing the $22,228,909,000 in assets be far more useful if it weren't a 200 DPI TIFF file?

The reason that the IRS does not release the MEF data directly is that they feel to do so would provide a substantial disincentive to those organizations that have the option of e-filing but are not required to do so. The MEF data is much more amenable to computerized processing than the scanned images and thus the e-filed returns are “more transparent” and it is felt that given the option most organizations would opt for the less transparent route. Public.Resource.Org does not necessarily agree with this line of reasoning, but that's the way it is.

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2. Convincing the IRS to Release the MEF Data

Public.Resource.Org has met with the IRS as well as the Chief Technology Officer of the United States and with congressional staff and has laid out the positive aspects of releasing MEF data. Release of the MEF data will lead to more effective allocation of resources in the nonprofit sector, will help protect the public when they decide where to donate, and will be a valuable tool to help the IRS in their own enforcement activities because they will be able to take advantage of a raft of innovative new services that will result from release of the informaiton.

It is our hope that the IRS will, in the spirit of the Executive Memorandum on Freedom of Information and pursuant to the requirements outlined in the Implementation Guidance for the E-Government Act of 2002 and as further outlined in OMB Circular No. A-130 (Revised), we believe disclosure of this data is required by law.

In addition to requesting release of the data, there are a series of actions being undertaken that may use the Freedom of Information Act to compel release. A FOIA request for this information has been submitted by seriousgivers.org and is currently on appeal. The FOIA requires release of records maintained in electronic format and the MEF data clearly falls under these requirements. See the Department of Justice update on the 1996 FOIA amendments and in particular 5 U.S.C. § 552(a)(2)(D).

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3. Data Extraction From Scanned Forms

We believe that sound public policy will require e-filing for all nonprofit returns and that such requirements will lead to a better-functioning nonprofit sector. Today, however, many organizations still file paper forms.

Public.Resource.Org has let a contract with Captricity, Inc., a state-of-the-art data extraction firm, to convert the first two pages of all Form 990Ts into computable data. Captricity will use advanced technologies to turn the first two pages of these returns from TIFF images from “paper into digital data” that can be fed to computer programs. Data for approximately 75,000 Form 990Ts will be completed by January 31, 2013.

In addition, Public.Resource.Org is experimenting with public domain OCR tools to determine if the MEF data can be “reverse-engineered” from TIFF images back into computable information.

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