Filers of the new IRS Form 990 will find “triggers” in many questions on the core form directing them to give more detailed explanations on various schedules, John Salbego, tax senior manager, Reznick Group, told exempt organizations at a forum on the new form sponsored by Arent Fox LLP and the Reznick Group on May 1, 2008, in Washington, D.C. Answering “no” to any of the questions, could raise a red flag for the IRS, Joseph A. Rieser, partner, Arent Fox, added.
Schedules. The core of revised Form 990 includes 11 parts, Salbego explained. Throughout the core are numerous “yes and no” questions. Part IV alone of the core form asks filers to answer 37 questions. “If you answer yes to a question that puts you in the position of having to complete a schedule.” “All of the questions and schedules reflect recent policy debates of whether exempt organizations are furthering their exempt purpose,” Rieser said.
Good Governance. Good governance appears to encompass more involvement by the exempt organization’s board of directors, Rieser noted. The IRS may be looking for a more “hands-on” approach by directors of nonprofits.
One example of the IRS’ emphasis on good governance is Question 10 on Part IV of new Form 990, Deanne M. Ottaviano, partner, Arent Fox, explained. Question 10 asks if a copy was provided to the organization’s governing body before it was filed. Organizations must describe the process, if any, they used to review the form.
“If the board chooses to delegate (review), it may but it must describe why,” Anne E. Schrantz, principal, Reznick Group, said. “Because so many different areas are touched upon the new Form 990, there may be different committees (of the board) that need to take responsibility for reviewing different portions.”
CCH Washington Bureau, May 1, 2008.
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