In an update from a previous post regarding a large donation made by an out-of-state non-profit to oppose Governor Jerry Brown’s tax initiative (“California audits can arise for a wide range of reasons,” Oct. 29, 2012), the California Supreme Court has ruled that the organization must disclose financial documents immediately. The request for the audits by California officials was granted by the court unanimously. The court, which issued its order at 3 p.m., gave the organization one hour to comply.

The audits are believed to be in an attempt to investigate whether the organization violated state laws. The laws prohibit the non-disclosure of individual donors if the donations were targeted towards a specific government initiative. The organization has repeatedly refused to disclose their donors’ identification, which stemmed the legal action that was initiated in October.

The Arizona based organization reportedly did not comply with the deadline set by the state court. It was reported that they had requested relief from the United States Supreme Court to extend their deadline. However, no further information has been released as to whether a delay in the disclosure deadline was granted.

Understanding audits and who may be subjected to them can be an important piece of information for many California citizens. Given the wide range of laws that surround the disclosure of financial information, ensuring that an individual, business or organization is properly protected can ensure that the audit process does not have a more detrimental affect than is necessary. Although it remains to be seen what exactly will occur in this case, it is clear that further legal wrangling may be needed, which in many people’s personal cases, is an added stress that they can ill afford.

Source: Sacramento Bee, “Capitol Alert: California Supreme Court orders nonprofit to face audit,” Kevin Yamamura, Nov. 4, 2012