"Now is the time to determine whether you need to adopt policies and procedures before year end. In addition, various questions in the filing should be answered, and we recommend carefully drafting and reviewing your narrative responses to address if they will reflect positively or negatively on your organization,” urges Karen A. Gries, nonprofit tax manager with LarsonAllen.

She explains that some internal systems (e.g., accounting) could require modifications to collect the data the new Form 990 requires.

Summary of revised redesigned 990 instructions
“I’m pleased with the revisions the IRS made to the instructions for the new Form 990,” says Reed Seabright, health care tax manager with LarsonAllen. “They took the public’s feedback seriously.”

The noteworthy revisions and background documents include:

• Specific instructions for the 11-page core form and 16 schedules
• Glossary of terms
• Compensation table to help organizations determine how to report different types of compensation (officers, directors, trustees, key employees, and highest paid employees)
• New appendices for reporting requirements
• Reporting guidance for filing group returns, including activities conducted through joint ventures and disregarded entities

Key reporting changes and history
Both Gries and Seabright believe the most notable reporting changes were made to the following sections of the final instructions and new form: governance, hospitals, executive compensation, tax-exempt bonds, non-cash contributions, and charity. They recommend nonprofits look at these areas of the form very carefully.

For example, organizations receiving non-cash contributions may not be tracking the “type” of contribution in a manner that will easily flow into the new reporting on Schedule M. Additionally, the schedules required for hospitals and outstanding tax-exempt bond issuances may require building accounting systems and practices to accumulate the data to be reported in the filing.

In our story titled “Redesigned 990 Requires Extensive Preparation,” learn about:

• Key reporting requirements for governance, hospitals, executive compensation, tax-exempt bonds, non-cash contributions, and charity
• Why the form changed and how the changes will impact your organization
• Your responsibilities and steps you can take to prepare

How we can help
With our 990 tools, we can help you understand and comply with the new disclosure requirements. We are working with clients to:

• Develop plans for upcoming filing dates
• Identify exposure areas
• Draft responses to the extensive questions

For more information, contact Karen A. Gries, nonprofit tax manager, or Reed Seabright, health care tax manager, at 1-888-529-2648.