Why hasn’t NGO Monitor’s US fundraiser filed legally required public disclosures with Internal Revenue Service?

NGO Monitor, the far-right Israeli group that fashions itself as a transparency watchdog, suffers from a mysterious lack of transparency itself.

The legally-mandated public disclosures required of US nonprofits are nowhere to be found for NGO Monitor’s US-based fundraising arm known as REPORT.

Indeed, The Electronic Intifada has obtained an Internal Revenue Service document that shows REPORT was warned of the consequences of failing to file its public disclosures.

NGO Monitor has engaged in regular public attacks on The Electronic Intifada and on numerous Palestinian, Israeli, Jewish and other organizations it perceives as being hostile to Israel. The group has close ties to Israel’s government and military establishments.

NGO Monitor has also recently spearheaded an attack on the Center for American Progress, a think tank close to the Obama administration, alleging that bloggers employed there had made “anti-Semitic” statements (More background on NGO Monitor is available from the Institute for Policy Studies).

REPORT and American Friends of NGO Monitor

According to NGO Monitor’s website:

NGO Monitor receives significant financial support from Research + Evaluation = Promoting Organizational Responsibility and Transparency (REPORT) (Formerly AFNGOM), which provided a grant of $500,000 in 2010.

REPORT, formerly American Friends of NGO Monitor (AFNGOM) is recognized as a 501(c)(3) tax-exempt organization by the United States Internal Revenue Service (IRS).

REPORT maintains a separate website on which it confirms that NGO Monitor is one of the three projects it supports.

Public disclosure requirements for US nonprofits

IRS Form 990, also known as “Return of Organization Exempt From Income Tax,” is familiar to almost anyone who works in the nonprofit world.

It provides basic financial information about a nonprofit organization, how it spends its money, and it lists board members and the compensation of the highest paid employees. It also requires the organization to disclose whether it has engaged in lobbying activities among other information.

All 501(c)(3) nonprofits with receipts over $25,000 – except for religious organizations and certain state institutions – must file Form 990 and it is the only public report that such nonprofits are required to file.

NGO Monitor knows all about 990s as it spends a lot of time trawling through those of organizations it targets in order to look for information it can distort or use to attack them.

Given that NGO Monitor acknowledges it received a grant of $500,000 from REPORT in 2010, it would certainly have had to file a 990 for that year.

REPORT’s 990 forms unavailable through public databases

There are two widely-recognized sources for easily obtaining 990 forms for any 501(c)(3) tax-exempt organization required to file: Guidestar and the Foundation Center.

The Guidestar page for REPORT indicates that the organization was recognized by the IRS in 2009, but there are no 990s available for either 2009 or 2010.

Similarly, a search on the Foundation Center, using either the name or the IRS identification number – known as an EIN – of REPORT (26-2971061) turned up no result.

The absence of a 990 for 2009 can explained by the fact that the organization was only recognized by the IRS in that year and did not have $25,000 or more in gross receipts.

But there should be a Form 990 for 2010. Where is it?

IRS warns REPORT in letter about failing to file

The Electronic Intifada has obtained a 14 October 2011 letter from the IRS to Harry Teichman, a board member of REPORT, whose name also appears in online databases as a tax lawyer. The letter is signed by Cindy Thomas, Manager of the IRS Exempt Organization Determinations unit. The letter begins:

This is in response to your Aug. 31, 2011, request for information regarding your tax-exempt status. Our records indicate that you were recognized as exempt under section 501(c)(3) of the Internal Revenue Code in a determination letter issued in April 2009.

Our records also indicate that you are not a private foundation within the meaning of section 509(a) of the Code because you are described in section(s) 509(a)(1) and 170(b)(1)(A)(vi).

What does this mean? Did Teichman inquire about the tax-exempt status fearing it had already been forfeited due to a failure to file a 2010 report? Was REPORT seeking some loophole through which it could avoid filing? Were the forms lost in the mail? We can only speculate. But what is clear is that as of January 2012, a Form 990 for 2010 is nowhere to be found.

It may be significant that the IRS letter warns REPORT of the consequences of refusing to file:

failure to file an annual information return for three consecutive years results in revocation of tax-exempt status as of the filing due date of the third return for organizations required to file.

REPORT and NGO Monitor

Guidestar does reveal that one Dov Yarden is the “chief executive” of REPORT. Dov Yarden is also the “Chief Executive Officer” of NGO Monitor, listed on its website just below its president, Gerald Steinberg.

REPORT exists chiefly to raise tax-exempt funds in the US and channel them to Jerusalem-based NGO Monitor. So it should be easy enough for Gerald, a stickler for transparency so he claims, to ask Dov to immediately publish the 2010 990 form that the public is entitled to see, if it exists, or to file it with the IRS as required by law at once.

It’s time for NGO Monitor to practice a bit of the transparency it preaches to everyone else.

IRS Letter to REPORT