December 20, 2007
Today the IRS issued an updated version of Form 990, the return that charities and other tax-exempt organizations are required to file annually. The final form released today retains the redesigned draft's format of a core form and a series of schedules. The new form will be used for the 2008 tax year (returns filed in 2009). The IRS plans to release the related instructions in early 2008. "We are continuing to work with the nonprofit sector to complete the new form's instructions," said Lois G. Lerner, Director of Exempt Organizations.
In response to public comments, the new core form allows an organization to describe its exempt accomplishments and mission up-front 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, governance section, and various schedules, including those relating to executive compensation, related organizations, foreign activities, hospitals, non-cash contributions, and tax exempt bonds. A checklist of schedules was also added.
Of particular interest to healthcare organizations, the IRS also announced a phase-in of the form's new hospital and tax exempt bond schedules. Certain identifying information will be required for the 2008 tax year, with completion of the entire schedules required for the 2009 tax year. "We believe the transition relief we are providing is appropriate and meaningful, and will ease the concerns raised by commenters," said Lerner.
The final Form 990 and background material explaining the changes from the current form and the June draft are available on the Exempt Organizations portion of the IRS website.
We would like to thank James R. King, Esquire, of Jones Day (Columbus, OH) for preparing this email alert.