Updated draft instructions for new Form 990, Return of Organization Exempt from Income Tax, are expected to be posted on the IRS website August 15, 2008. The IRS published revised Form 990 in 2007. The 2008 Form 990 consists of an 11-page core form and 16 schedules. Many of the schedules are new, including: activities outside the U.S., hospitals, tax-exempt bonds, and noncash contributions. Others contain revisions and expansions of existing reporting concerning public charity status and public support, lobbying and political activities, fund-raising and gaming, compensation, transactions with insiders, and related organizations.
The 2008 Form 990 was released without instructions. When the IRS issued draft instructions in April 2008, it identified some common problems with the old instructions. These included no glossary of key terms, unclear definitions, and insufficient guidance in key areas, such as the reporting of activities of disregarded entities and joint ventures owned by the filing organization. The IRS also reported that filers requested more examples in the instructions. The comment period for the draft instructions ended on June 1, 2008.
Key employees. The IRS has revised the definition of “key employee” for purposes of reporting executive compensation, transactions with interested persons, and other items. Under the revised definition, entities will report as key persons only those individuals, other than officers, directors, and trustees, (1) who had reportable compensation exceeding $150,000 for the year; (2) had or shared organization-wide control or influence similar to that of an officer, director, or trustee; or (3) managed or had authority or control over at least 10 percent of the organization's activities (the “responsibility test”) and were among the organization's top 20 highest paid persons for the year who satisfied both the $150,000 test and the responsibility test.
Hospitals. Schedule H filers will be required to list in Part V each hospital or other facility that is licensed, registered, or similarly recognized by a state as a health care facility, including facilities other than licensed hospitals. The IRS explained that this does not alter the definition of hospital for purposes of determining whether the organization must complete Schedule H. Additionally, physician clinics and skilled nursing facilities will be eligible for treatment as subsidized health services in accordance with the generally applicable rules regarding subsidized health services.
CCH Washington Bureau, Aug. 6, 2008.
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