Yes, the IRS did complete its major revision of the Form 990 in 2008 (for returns filed in 2009 and later), but each year there are some revisions and clarifications. A chart summarizing the significant changes to the Form 990, Form 990-EZ, schedules, and instructions for tax year 2012 was published recently by the IRS.
Most of the changes are small, but all reflect areas of concern to the IRS in its enforcement efforts. The IRS has continued to refine and clarify the regulations for hospitals and organizations that give foreign grants. The form itself was changed to eliminate the section covering the reconciliation between audited financials and the numbers reported on the Form 990, which has required some other changes throughout the form. So, all organizations should review the changes before filing their 2012 returns.
A few changes that all organizations should note are listed below:
- DO NOT put SSNs and home addresses on the form.
The IRS does not want private information (like Social Security Numbers for individuals and tax preparers and home addresses for board members) listed on these forms, as the forms are public documents. If this private information is included on the form, the IRS must include it when asked for a copy of the filed document – no redactions are allowed. So again, the IRS is emphasizing that such information is not required and should be kept off the form. The form will end up on the web, available to all.
- DO report compensation for organization executives that actually are employed by management companies.
Some organizations have contracts with for-profit management companies to administer their programs and staff, so compensation levels for the individual positions were often not listed, just a total for the management contract. More detailed reporting is now required on compensation, even if the executives are paid by the management company.
- DO report hours worked per week from related organizations as well as hours worked for the reporting organization in part VII.
Again, the IRS is interested in getting a better picture of the relationship between related organizations and how employees working for these related organizations allocate hours and payroll costs.
One final point that was actually a clarification in the instructions last year, but is worth emphasizing again, is the reporting of compensation in Part VII of the form.
- DO NOT check too many boxes in Column (c) when selecting Position for the listed employees.
Only one is usually the right answer – unless the person was both an officer and director/trustee of the organization, then those two boxes can be checked. Otherwise, check only the relevant one.
As the Annual Report of the Exempt Organization Division states on page 22:
“The IRS uses the Form 990 responses to select returns for examination, so a complete and accurate return is in your best interest.”
So, it continues to be important to pay attention to the information filed on Form 990 and any changes to those requirements.