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Understanding
the Ins and Outs of New IRS Form 990
For
the first time in 30 years, the format for reporting income
tax for non-profit and tax-exempt organizations has been
changed by the Internal Revenue Service. The changes will
have great impact upon non-profits/tax-exempts.
The
new IRS “Form 990,” as it is known is intended to enhance
transparency, promote compliance and reduce the filing burden.
It is now in effect for calendar year 2008 and for filers
whose fiscal year began in 2008.
The
new format calls for a significant increase in the amount
of information to be disclosed. When completed, the Form
990s are available for public inspection and easily accessible
through Guidestar and other non-profit watchdog organizations.
As a result, the management and boards of non-profits/tax-exempts
should make sure their filings are well organized and accurately
portray the organization's data in the new reporting format.
The
new Form 990 has a graduated phase-in as follows:
| May
file 990-EZ for: |
If
gross receipts are: |
If
assets are: |
| 2008
tax year (filed in 2009) |
>
$25K and < $1 million |
<
$2.5 million |
| 2009
tax year (filed in 2010) |
>
$25K and < $500K |
<
$1.25 million |
| 2010
and later tax years |
>
$50K and < $200K |
<
$500K |
Management
should review the following pages as soon as possible to
determine which, if any, they will need to complete, and
then review schedules and the instructions:
- 11
page core
- 16
possible schedule attachments (Schedules A through O,
and Schedule R)
- 37
questions on pages 3 and 4 that determine which of the
schedules an organization must follow
A
Quick Overview
Page
1 - a summary of comparative financial information
and questions about activities and governance.
Page
2 - information on program service accomplishments,
similar to the data required on the current Form 990.
Page
5 – 12 mostly new questions about compliance with
tax filings and IRS requirements.
Page
6 - probably the most significant change, asking
20 key questions about governance, management, and disclosures.
Most non-profits/tax-exempts may need to amend or adopt
certain policies so that these questions may be answered
“yes.”
Pages
7 and 8 - information regarding compensation levels
for officers, directors, trustees, key employees, highest
compensated employees and independent contractors, past
and present. While some of this data is similar to the prior
Form 990, several differences are important to understand.
Pages
9 through 11 – data about revenues, functional
expenses and balance sheet, while comparable to the old
reporting format, requires more detail.
Some
of the 16 schedules require the same information as from
the old form, but the data appears to be better presented
on the applicable schedule. For example, the former Schedule
A has been divided into four schedules (A, C, E and H).
The former Schedule B regarding contributions and contributors
has not changed. Most of the remaining schedules are new
and require detail typically not provided in the past.
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