Public.Resource.org v. United States Internal Revenue Service

Filing 49

Declaration of Beth Simone Noveck in Support of 47 MOTION for Summary Judgment Plaintiff Public.Resource.Org's Consolidated Cross-Motion for Summary Judgment and Opposition to Defendant's Motion for Summary Judgment filed byPublic.Resource.org. (Attachments: # 1 Exhibit A)(Related document(s) 47 ) (Burke, Thomas) (Filed on 9/29/2014)

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DAVIS WRIGHT TREMAINE LLP

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THOMAS R. BURKE (CA State Bar No. 141930)
DAVIS WRIGHT TREMAINE LLP
505 Montgomery Street, Suite 800
San Francisco, California 94111
Telephone:
[phone]
Facsimile:
[phone]
Email:
[e-mail]
RONALD G. LONDON (Pro Hac Vice)
DAVIS WRIGHT TREMAINE LLP
1919 Pennsylvania Ave., N.W., Suite 800
Washington, DC 20006
Telephone:
[phone]
Email:
[e-mail]
DAN LAIDMAN (State Bar No. 274482)
DAVIS WRIGHT TREMAINE LLP
865 South Figueroa Street, Suite 2400
Los Angeles, CA 90017-2566
Telephone:
[phone]
Facsimile:
[phone]
Email:
[e-mail]
DAVID HALPERIN (Pro Hac Vice)
1530 P Street NW
Washington, DC 20005
Telephone:
[phone]
Email:
[e-mail]
Attorneys for Plaintiff Public.Resource.Org

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IN THE UNITED STATES DISTRICT COURT

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THE NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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PUBLIC.RESOURCE.ORG., a California non- ) Case No. 3:13-CV-02789-WHO
profit organization,
)
)
Plaintiff,
) DECLARATION OF BETH SIMONE
) NOVECK
v.
)
)
UNITED STATES INTERNAL REVENUE
)
SERVICE,
)
)
Defendant.
)

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Declaration of Beth Simone Noveck
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I, Beth Simone Noveck, declare as follows:

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1.

Since 2002, I have been a Professor of Law at the New York Law School. I am

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presently on leave from that position. I have personal knowledge of the matters stated in this

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declaration and could competently testify to them if called as a witness.

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2.

I am currently the Jerry Hultin Global Network Visiting Professor of Engineering

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at New York University and since 2012, I have also been a Visiting Professor at the MIT Media

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Lab.

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3.

From 2009 to 2011, I served as United States Deputy Chief Technology Officer in

the Executive Office of the President. In that capacity, I was charged with responsibility for the

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White House Open Government Initiative, including implementation of the President's

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Memorandum on Transparency and Open Government and the Office of Management and

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Budget's Open Government Directive and, together with my colleagues, implementation of the

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Administration’s policy on open government data.

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4.

As a result of this policy millions of people have searched for and downloaded

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open government datasets about everything from air pollution to farmers’ markets to government

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spending. Today, the governments of over 40 countries have opened more than a million data

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sets. People outside of government are using this data to develop solutions to challenging

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problems. For example, governments around the world are opening up the data they collect, such

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as subway and bus schedules, and then inviting tech-savvy citizens — civic coders — to create

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smartphone apps that tell commuters when their bus or train is coming.

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5.

In 2013, I served as co-author and principal investigator of the report "Information

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for Impact: Liberating Nonprofit Sector Data" published by the Aspen Institute (Aspen Institute

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Report). This report was an independent examination of Internal Revenue Service distribution of

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Exempt Organization tax returns (Forms 990). Preparation for the Aspen Institute Report included

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extensive interviews and discussions with experts in the field, including GuideStar, the National

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Center for Charitable Statistics at the Urban Institute, the Foundation Center, the Center on

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Philanthropy at Indiana University, and the Center for Civil Society Studies at Johns Hopkins

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University. A copy of this report can be found at
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Declaration of Beth Simone Noveck
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http://www.aspeninstitute.org/sites/default/files/content/docs/psi/psi_Information-for-Impact.pdf

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and is appended to this Declaration at Exhibit A.

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6.

The conclusion of the Aspen Institute Report was the data that the IRS collects

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about nonprofit organizations present a great opportunity to learn about and make the nonprofit

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sector more innovative and effective. Yet this data could be made far more useful than it is today

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if it were provided in open formats, by which I mean that the Forms 990 should be accessible in

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forms that third parties can use to do analysis and develop software applications about the

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workings of America’s nonprofits.

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7.

One of the primary conclusions of the Aspen Institute Report was that the IRS

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should make the Forms 990 available in the format in which they were created. In other words, the

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990s in Modernized e-File Format (MeF) should be published as-is in an open, digital format

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rather than being converted at time and taxpayer expense into the low-resolution images that are

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currently distributed.

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8.

The current system for distribution of e-filed Forms 990 consists of combining the

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e-file data with the forms and releasing the information as an image file. The result is the

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equivalent of a scanned paper document. Taking this extra step of converting open, digital data

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into an image file, instead of releasing the data received in MeF format in which it was filed,

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makes the information significantly harder to use. While techniques such as Optical Character

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Recognition (OCR) could be employed to recognize some of the data, these techniques are prone

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to considerable numbers of errors and are significantly more difficult than working with the data

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in the original MeF format.

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Making data in MeF format could enable researchers and law enforcement to

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recognize fraud early, anticipate abuses, and target enforcement more efficiently and effectively.

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For example, many state Attorneys General have a policy of providing extra scrutiny for

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nonprofits that provide loans to directors or officers. While such loans are not per se wrong, they

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are often a red flag that signals the presence of possible governance issues. Under the current

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system for release of the Form 990, state enforcement officials are forced to manually leaf through

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Declaration of Beth Simone Noveck
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large numbers of returns, whereas with release of data in MeF format, a simple computer program

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could find that information easily.

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If data in MeF format were available, for example, information from the Form 990

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could be more easily combined with other datasets, such as those on government spending, to

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better understand the relationship between public and private dollars in providing social services.

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If data in MeF format were available, extensive, in-depth, empirical research on the

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sector as a whole, including sector-wide issues such as the impact of the economic downturn on

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nonprofits, the geographic distribution of nonprofit services, and the efficiency of the nonprofit

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sector in delivering services could be conducted more easily.

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12.

On January 31, 2013, I spoke publicly on a panel at the Aspen Institute where

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representatives of major foundations and other leaders of the nonprofit community strongly

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indicated that they would welcome the release of electronic Forms 990. A video of that panel is

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available here: https://www.youtube.com/watch?v=_6ZhoIjvt2o

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As I wrote in a public letter published in Forbes to IRS Acting Commissioner

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Werfel, if data in MeF format were available, the IRS itself could more cost-effectively spot

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patterns of fraud and abuse and conduct its own enforcement activities on the basis of tangible and

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visible evidence. That article can be found at: “IRS: Turn Over a New Leaf, Open Up Data,” a

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Forbes (May 2013).

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Federal policy is very clear that making information available in machine-

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processable format, such as the Modernized e-File Format (MEF), is an important public interest

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goal as explained in the Executive Order "Making Open and Machine Readable the New Default

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for Government Information." That Executive Order can be found at

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http://www.whitehouse.gov/the-press-office/2013/05/09/executive-order-making-open-and-

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machine-readable-new-default-government- That Executive Order states "To promote continued

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job growth, Government efficiency, and the social good that can be gained from opening

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Government data to the public, the default state of new and modernized Government information

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resources shall be open and machine readable."

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Declaration of Beth Simone Noveck
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I believe that release of Forms 990 as machine-processable data in MeF format

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would be of immense use to those that work with Exempt Organizations data and would open up a

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raft of new uses for those that have been unable to work with the data because of the current,

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outmoded distribution format. I believe release of data in MeF format is clearly in the public

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interest.

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I declare under penalty of perjury under the laws of the United States that the foregoing is

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true and correct and that this declaration was executed this 23rd day of September, 2014 at New York,

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N. Y.

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/s/ Beth Simone Noveck
BETH SIMONE NOVECK

DAVIS WRIGHT TREMAINE LLP

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Declaration of Beth Simone Noveck
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