Revised 2008 Form 990 requires current action.

• Author: Underwood, Joyce
• Position: Nonprofit organizations tax exemption form

On December 20, 2007, after extensive public comment, the Service released its final draft of Form 990, Return of Organization Exempt from Income Tax, for the 2008 tax year. Although preparers will not use the revised form until 2009, organizations and their tax advisers should be aware that significant changes in reporting rules for the new return may require current changes in procedures and an organization's accounting system to capture the necessary information.

Form 990 has expanded to 11 pages and will now have 16 possible schedules. The form is completely reorganized, presents comparative summary information on page one, and now captures information in many areas that have been of key concern to the IRS, Congress, and the public in recent years. Seeking to identify well-run organizations by their answers, Form 990 now requests information on governance, tax compliance, and certain tax firings. The Statement of Program Service Accomplishments now requires a breakdown of revenue in addition to grants and expenses by program. The reporting of compensation of officers and other key employees is now reported based on Form 1099 and W-2 data on a calendar-year basis regardless of the organization's fiscal year, which can create confusion with the reporting of fiscal-year information in the functional expense summary. Also, non-501(c)(3) organizations are now required to report compensation of non-key employees and independent contractors.

Although Schedule B, Schedule of Contributors, is unchanged, most information from Schedule A has been split up among the many new schedules; the schedule now retains only reporting of the reasons for public charity status and public support. A new Schedule J, Compensation Information, provides a number of new questions about the nature of compensation packages. Schedule G, Supplemental information Regarding Fundraising or Gaming Activities, captures information on fundraising and gaming that will likely be a key focus of state charity regulators. Schedule M, Non-Cash...