On June 14, 2007, the IRS released a discussion draft of a substantially redesigned Form 990, Return of Organizations Exempt from Income Tax. The redesign of the Form, the first since 1979, is based on three guiding principles:
- Enhancing transparency by providing the IRS and the organization’s stakeholders with a realistic picture of the organization and its operations, along with the basis for comparing the organization to similar organizations.
- Promoting tax compliance by ensuring that the Form accurately reflects the organization’s operations and use of assets, so the IRS may efficiently assess the risk of noncompliance.
- Minimizing the burden on filing organizations by asking questions in a manner that makes it relatively easy to fill out the Form and that does not impose unwarranted additional recordkeeping or information-gathering burdens to obtain and substantiate the reported information.
The draft consists of a 10-page core form and 15 schedules, each of which must be completed only by organization conducting certain activities. The core form includes a summary page providing a snapshot of the organization’s key financial, compensation, governance, and operational information.
Comments to the discussion draft Form 990 can be sent to Form990Revision@irs.gov and are due by September 14, 2007. The IRS hopes to have the redesigned Form 990 ready in 2009 for the 2008 tax filing year.
Independent Sector’s Analysis (rev. 8/3/07)