Tuesday, April 28, 2009

Newly Designed Form 990

For the 2008 tax year, charities with gross receipts >$1 million and assets >$2.5 million are required to use the newly designed Form 990. This is the first major redesign since the Form 990 was introduced in 1941.

Why the redesign? The IRS wanted to accomplish three, somewhat competing, goals:
  1. Increase transparency
  2. Increase accountability
  3. Ease the reporting burden on charities.
The new 990, which includes more questions about governance and compensation practices, consists of an 11 page core form and 16 schedules. Charities are not required to complete all of the schedules, but are directed to fill out certain schedules based on their responses to trigger questions. The IRS offers a mini online course that introduces the newly designed Form 990 and provides guidance to charities in how to complete the new document.

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