You have a few weeks left to make public comments on the revised Form 990. The changes will require nonprofits to strengthen accounting procedures – including upgrading accounting software and hiring staff with financial expertise – in addition to shoring up board governance procedures. The public has until September 14, 2007, to provide comments before it is finalized.
The new form must be filed by any nonprofit that has $100,000 or more in gross revenue or $250,000 in assets. Among the changes that will most significantly impact smaller charities are:
- – A summary page that requires disclosure of how much of a nonprofit’s revenue is devoted to program, administration and fundraising;
- – Details on the percentage of revenue paid in salaries to key employees; and detailed disclosure of executive compensation, fundraising expenses, non-cash donations and grants to individuals and other organizations;
- – Whether or not there is a whistleblower policy;
- – Expanded compensation disclosure requirements from officers and directors to all “key employees,” which is defined to include employees that supervise substantial organizational activities.
Independent Sector and the DC Bar Pro Bono Program: Community Economic Development Project have been closely following the revision process. Click here to for details on proposed revisions. To review Independent Sector’s comments on the proposed revisions, click here.
In June 2007, the IRS proposed significant changes seeking additional information beyond what is currently required. The IRS proposes to apply the new form in the 2008 calendar year for filings made in 2009.
New changes are designed to address recent scandals involving abuses of nonprofit status. The redesign of Form 990 is based on three guiding principles: enhancing transparency, promoting tax compliance, and minimizing the burden on the filing organization.