May 15th--deadline for the first 990 filers--get your interviews and documentation ready
The I.R.S. restructured the 990 tax returns for 1.3 million nonprofit (not including churches). This is the first time since 1979 such a major reform has been put into place and the ramifications are significant. The draft was issued in December 2007, adjustments were made, and the filings for Annual Year 2008 are due May 15th. All nonprofit officers, boards, attorneys and accountants are focusing on this new form. Do you know what to look for?
Are you grabbing one of the biggest stories this year?
- The redesigned forms have 16 new schedules featuring information that has not previously been collected. Information will help monitor how nonprofits take action to advance their missions.
- The first four pages are now an informational summary which includes the mission statement
- Unrelated business income, noncash contributions and other revenue will become more transparent
- The new governance section will require all nonprofiit boards to comply with new policies about records retention, whistleblower or anti-harassment protections, and will require the demonstration of more stringent conflict of interest disclosures
- The 16 new schedules standardize a broader array of required information
- The new schedules focus on compensation, and require salary and other information on every Executive Director and Financial Officer, as well as highest paid officers, and board compensation
- Noncash contribution reporting will be more standardized
- Hospitals will be asked to demonstrate why they are exempt from federal income taxation
- Tax exempt bonds information is now transparent
To review some of the first 990s filed for the Annual Year 2008, go to Guidestar.org
Additional Information is found at Minnesota Council for Nonprofits mncn.org
Contact partner Sarah Duniway with Gray Plant and Mooty http://www.gpmlaw.com/professionals/bio.aspx?id=1106&LangType=1033&terms=duniway
Contact Peg Thomas, NonprofitPro at peg@strategeries.com www.strategeries.com
Use the 990s for your planning
The I.R.S. dramatically changed the tax filings for all nonprofits. Instead of financial documents, the new filings are information documents. The new documents will be reviewed by thousands of people who will becomed informed about countless aspects of your organization through Guidestar.org.
This is some of what you will now be revealing:
- The salaries of your Chief Financial Officer and Executive Director, no matter what you pay them.
- Yes or no: do you have Conflict of Interest Statement, Whistleblower Statement, your Document Destruction and Retention Policies.
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Does your board meet regularly?
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Does your board use benchmarks to measure success, and what is the quantity and quality of your programming--does it support your stated mission statement?
Are you prepared to meet these yearly information needs?