What has changed with the new 990?
The 990 is the primary federal return for tax-exempt organizations. In 2008, the IRS released its first major revision in more than 20 years. The reason, according to the IRS, is that the old form “failed to reflect the changes in the law and the increasing size, diversity, and complexity of the exempt sector.”
While there are changes to most tax forms every year, when you hear about the “new 990,” people are generally referring to the 2008 overhaul.
So what’s new? Here’s a quick summary:
- The addition of a section on governance, including requests for information on the governing body, management practices, and disclosure policies, such as in the case of a conflict of interest.
- Revisions to the way executive compensation is reported, along with transactions with “interested persons,” such as board members and independent contractors.
- New definitions of officers, directors, trustees and key employees.
- The addition of thresholds and exceptions for organizations required to file certain reports. This is designed to reduce the reporting burden for many organizations.
- Revised filing amounts (i.e., gross receipts and assets) for organizations eligible to file the 990-EZ.
- The addition of an annual electronic filing requirement for tax-exempt organizations normally with annual gross receipts of less than $25,000. These organizations are not required to file a 990 or 990-EZ, but must file a Form 990-N, Electronic Notice (e-Postcard).
- Reduction of required attachments; addition of new schedules. Financial reporting, fundraising, gaming activities (such as a charity-run bingo game) and treatment of endowments and art collections are just a few of the items covered in the new schedules.