The document summarizes key points about the revised Form 990 that non-profit organizations in the US must file. It highlights changes made to emphasize governance, management policies, and disclosure practices. It provides an overview of the additional schedules and requirements for policies and documentation. It also lists common mistakes made in filling out the form and provides resources for non-profits to ensure compliance.

1. Form 990:
Making It Work for Your Organization
Harmon Burstyn
August 8, 2012
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5. The Not so New Form 990: Make It Work for
Your Organization
 Harmon Burstyn, CPA
hburstyn@harmonburstyncpa.com
 www.irs.gov
 www.guidestar.org
 Attorney General
 Secretary of State
 www.foundationcenter.org
 www.boardsource.org
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6. The Not so New Form 990: Make It Work for
Your Organization
 Form 990 had not been significantly revised since
1979.
 Exempt organizations (EO) have increased in size,
diversity, and complexity.
 Emphasis on the EO governing body, governance
and management policies, and its disclosure
practices.
 More schedules, no attachments.
 Form structured to allow EO to tell their story.
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7. Exempt organizations have increased in
size, diversity, and complexity.
 Nonprofit groups account for 5% of the U.S.
gross domestic product
 Contribute $666 billion to the economy
through their actions
 Many charitable nonprofit organizations have
international operations
 Multiple revenue streams
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8. Form 990 Filing Phase-In
Form 990:
 2008—Gross receipts ≥ $1,000,000; total assets ≥
$2,500,000
 2009—Gross receipts ≥ $500,000; total assets ≥
$1,250,000
 2010—Gross receipts ≥ $200,000; total assets ≥
$500,000
Form 990EZ—All others above $50,000 average
Form 990N—Gross receipts $50,000 or less
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9. Emphasis on governance, management
policies, and its disclosure practices.
 Sarbanes-Oxley’s impact
 Sen. Charles Grassley, Senate Finance
Committee
 Sarah Hall Ingram, Commissioner, Tax
Exempt and Government Entities, IRS
 Mismanagement, fraud, unrelated business
income tax (UBIT)
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10. More schedules, no attachments
 “Core” Form 990 is 12 pages
 16 “possible” schedules
 No attachments (Schedule O)
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11. 16 Schedules
 A – Supplementary Information
 B – Schedule of Contributors
 C – Political Campaign and Lobbying Activities
 D – Supplemental Financial Statements
 E – Schools
 F – Statement of Activities Outside the United States
 G – Supplemental Information Regarding Fundraising or
Gaming Activities
 H – Hospitals
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12. 16 Schedules - Continued
 I – Grants and Other Assistance to Organizations,
Governments and Individuals in the United States
 J – Compensation Information
 K – Supplemental Information on Tax-Exempt Bonds
 L – Transactions With Interested Parties
 M – Non-Cash Contributions
 N – Liquidation, Termination, Dissolution or Significant
Disposition of Assets
 O – Supplemental Information to Form 990
 R – Related Organizations
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13. Form 990 structured to tell your story.
 Part I, Line 1
 Part III, Line 1
 Part VI
 Schedule “O”
 Direct users to EO website
 Form 990, website, marketing materials all
compliment each other
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14. Redesigned Form 990
Required Policies
 Conflict of interest policy – Part VI, Line 12
 Whistleblower policy – Part VI, Line 13
 Document retention and destruction policy – Part VI,
Line 14
 Joint venture policy – Part VI, Line 16
 Expense reimbursement policy – Schedule J, Part 1,
Line 1
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15. Redesigned Form 990
Practices & Procedures
 Prepare a written document setting forth the
procedures by which the Board of Directors will
review the Form 990 before it is filed – Part VI, Line
11
 Document compensation reasonableness processes
– Part VI, Line 15
 Obtain/retain professional fundraisers agreement –
Schedule G, Part I, Line 2
 Documentation regarding eligibility to receive grants
– Schedule I, Part 1, Line 1
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16. Redesigned Form 990
To Do List
 Estimate the total number of volunteers during the year – Part I, Line 6
 Identify any new program service activities conducted during the year
– Part III, Line 2
 Ensure that all 1099s are filed when required (non-employee services
of $600) – Part V, Line 1a
 Prepare documentation to support classification of independent
contractors
 Ensure that organization is preparing Form W-2G when required –
Part V, Line 1b
 Register with Attorney General if conducting raffles and undertake
backup withholding if necessary – Part V, Line 1c
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17. Redesigned Form 990
To Do List
 Document meetings of Board of Directors and
committees with authority to act – Part VI, Line 8
 Document how organization satisfies public disclosure
requirements – Part VI, Line 19
 Identify all key employees under the expanded definition
($150k compensation)
 Document an allocation policy for indirect costs – Part IX
 Update Chart of Accounts (and audited financial
statements) to include the “new” expense categories -
Part IX
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18. Automatic Lose of Tax-Exempt
Status
 Beginning in 2007 EO’s were required to file a return with the
IRS, even if revenues were under $25,000.
 No filings for 3 consecutive years led to automatic lose of tax-
exempt status.
 As of October 2010 275,000 EO’s lost their exempt status.
 IRS believes the vast majority of these are defunct.
 EO’s with $50,000 or less in gross receipts can re-apply for tax-
exempt status retroactive to the date of revocation.
 Application (Form 1023) fee reduced to $100.
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19. Common Mistakes
 “Weak” program service accomplishment descriptions.
 Not filing the RRF-1 with the Attorney General.
 No careful review of the 990 prior to filing.
 Board not understanding the 990 and its importance.
 Non/late filing of the SI-100 with the Secretary of State.
 Taking “risk” with pro bono preparation.
 Not tracking volunteer hours.
 Not tracking expenses for each program.
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