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IRS Releases New Version of Form 990

On December 20, 2007, the Internal Revenue Service issued a new version of Form 990, the tax return charities and other tax-exempt organizations are required to file annually. The new version of the form will be utilized for 2008 returns due in 2009.

Numerous groups submitted comments to the IRS in response to the initial draft issued by the IRS on June 14, 2007. The new version of Form 990 reflects an openness on the part of the IRS to many of the suggested changes. The new version of Form 990 allows an organization to describe its mission or significant activities on page one of the form and provides more opportunities throughout the form for the organization to explain its activities. Other major changes were made to the form's summary page (which seek to highlight current and prior year financial information in several key areas); expanded questions on governance and executive compensation; and the addition of several new or modified schedules.

The final form consists of an 11-page core form, which must be completed by each Form 990 filer and a series of 16 supplemental schedules, which require reporting of information only from those organizations that conduct particular activities. The final form significantly changes the amount and the format of information that is reported on Form 990 compared to the current Form 990 and could have operational impacts on the information that will need to be gathered starting with fiscal years beginning in 2008.

The new tax form will be required for all 2008 calendar years and all fiscal year entities with fiscal years beginning in 2008. For example, an entity with a June 30 fiscal year-end will need to file the new 2008 return for the fiscal year beginning July 1, 2008 and ending June 30, 2009.

More information, including the new form and IR-2007-204, is available at http://www.irs.gov/charities/index.html.

Please stay tuned for additional written communications from Blackman Kallick regarding the changes affecting your organization.

Blackman Kallick will also be hosting a round-table discussion for its not-for-profit clients and friends on Wednesday, March 5, 2008. The primary goal of the round table will be to discuss what organizations should be doing during 2008 in order to capture the financial information necessary to facilitate compliance with the reporting required under the new version of the form.

Questions?
Contact Brian Whitlock at 312-980-2941.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.