The IRS Form 990, Return of Organization Exempt from Income Tax, is used by nonprofits that have been organized under the various Tax Exempt Code Sections. Determining which 990 form is required is based on the level of gross receipts and total assets. Organizations that receive less than $50,000 in gross receipts, file Form 990N; for gross receipts less than $200,000 and total assets below $500,000, a Form 990-EZ or Form 990 is filed. Organizations that receive $200,000 or more in income or have $500,000 or more in assets must file Form 990.
These forms have been redesigned in recent years resulting in increased filing errors, according to the IRS. The importance of properly completing the 990 form is significant as the IRS has sent a clear message through the Exempt Organizations Division of the Tax Exempt and Government Entities office, that the number of returns being audited has increased, so a complete and accurate return is in your best interest. Data from the redesigned Form 990 is being used to identify patterns of noncompliance so that the IRS can better target potential offenders.
There are many common mistakes made by nonprofits when completing the Form 990, because reporting is no longer just about the numbers. This is a direct reflection of policy requirements that the Sarbanes-Oxley Act imposed on public companies, and that the IRS is now imposing on nonprofits. Most importantly, the new form asks, more closely than before, about board involvement in establishing and assessing policies supporting proper governance. This includes an expectation that board members are reviewing the completed Form 990.
It is important to note that a nonprofit’s From 990 filing becomes public information and is easily accessible by donors and community. Therefore, it is important that organization portray themselves in the best possible light with a complete and accurate Form 990 filing. White Nelson Diehl Evans supports the mission of our clients by ensuring that all compliance issues are met when completing the Form 990, therefore allowing our clients to focus on their core mission.