Nonprofits and Governing Board Members Have New IRS Filing Requirements
Most nonprofit organizations are required to file an annual information return with the IRS known as Form 990. The IRS uses Form 990 as the primary tax compliance and reporting tool for tax exempt organizations. Unlike all other tax returns, once filed, Form 990 is open to public inspection. The IRS has completely revised Form 990 for filings beginning in 2009. The first filings using the new form began this past May 15, 2009, for tax year 2008.
The new form consists of an 11-page, 11-part core form that is required to be completed by all organizations that file Form 990. Depending upon the type of organization, one or more of 16 additional schedules may also need to be filed.
One of the primary changes involves new and extensive reporting requirements pertaining to the organization’s governance and management (Part VI, Sections A, B and C.) For example, Part VI, Section B, Policies, requires the organization to disclose whether or not it has adopted, and follows, policies pertaining to such things as compliance issues, conflicts of interest, whistleblower, document retention and destruction and compensation. Nonprofits, and their boards, need to be aware of these requirements well in advance of the due date for filing because of the potential need to update, adopt and implement any number of these policies and procedures.
Further, whereas previously the preparation and filing of Form 990 was likely left to the organization’s accountant or treasurer, a final version of the form must now be provided to each member of the organization’s governing board, must be reviewed by that board before filing, and the process for that review must be disclosed in Schedule O (see Part VI, Section A, question 10.)
An extensive amount of information concerning these new filing requirements can be found on the IRS website (www.irs.gov) by clicking on the tab “Charities & Nonprofits.”
Duane L. Reynolds