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IRS Forms 990: Accountability, Transparency,

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Title: IRS Forms 990: Accountability, Transparency,


1
IRS Forms 990 Accountability, Transparency,
Marketing
  • Gail T. Merridew, MPA, NMC
  • Community Impact Grants Manager
  • United Way of Greater Richmond Petersburg
  • gail_merridew_at_peoplepc.com
  • 804.771.5846 (Work) 804.874.5334 (Cell)

2
Purpose of Form
  • Used by tax-exempt organizations, Section 527
    political organizations, and nonexempt charitable
    trusts to provide information to the IRS (as
    required by Section 6033)
  • Available for public inspection (Section 6104)
  • Primary or sole source of information about
    specified organizations programs and
    accomplishments
  • From IRS Instructions for Form 990 and Form 990-EZ

3
Three Guiding Principles
  • Enhancing transparency to provide the IRS and the
    public a realistic picture of the organization
    and a reasonable basis for comparison to other
    organizations.
  • Promoting compliance and accountability by
    accurately reflecting the organizations
    operations so the IRS may efficiently assess the
    risk of noncompliance.
  • Minimizing the burden for filing multiple
    documents with multiple entities.

4
Filing Requirements
  • All 501(c)(3) tax exempt organizations need to
    make an annual filing. Generally
  • 990-N (e-postcard) for organizations with annual
    gross receipts less than 50,000
  • Form 990-EZ for organizations with annual gross
    receipts less than 200,000 and total assets less
    than 500,000 at the end of the year
  • Form 990 for organizations with gross receipts
    greater than or equal to 200,000 or total assets
    greater than or equal to 500,000 at the end of
    the year

5
Filing Requirements
  • Failure to file for 3 consecutive years will
    result in the automatic revocation of your tax
    exempt status.
  • Tax penalties exist for failure to make timely
    filings.
  • (A penalty of 20/day, not to exceed 10,000 or
    5 of total revenue, may be charged. For
    organizations with 1 Million or more in total
    revenue, a penalty of 100/day, not to exceed
    50,000, may be charged.)

6
Accounting Periods
  • Calendar Year January 1 December 31
  • Fiscal Year 365/366 day period beginning with
    the first day of one month and ending with the
    last day of the previous month (e.g. July 1
    through June 30) - will often coincide with the
    organizations natural operating or funding
    cycle, where one exists.
  • Short period an accounting period less than 12
    months (may be used to move from one reporting
    period to another).

7
When to File
  • The 15th day of the 5th month after the end of
    the organizations accounting period
  • For calendar year preparers 5/15
  • For fiscal years ending 6/30 11/15
  • For fiscal years ending 9/30 2/15
  • Automatic extensions of 3 months may be requested
    with Form 8868 however, reasonable cause for the
    additional time requested must be provided for
    this or additional extensions.

8
Who is looking at your Form 990?
  • IRS
  • Media
  • Job seekers
  • Other nonprofits
  • State regulators
  • Watch dog groups
  • Potential board members
  • Potential donors / funders
  • Large foundations often have staff devoted to
    990 analysis

9
GuideStar (www.guidestar.org)
  • Using GuideStar
  • How to Find What Youre Looking for in GuideStar
  • Search Results
  • General Information Analyst Report
  • Board of Directors Financial Data
  • Mission and Programs (Premium Members or )
  • Goals and Results
  • Form 990 and EDOCs

10
Documents
  • Funders often request one or more of the
    following
  • IRS tax determination letter
  • IRS Form(s) 990
  • Annual Report(s)
  • Audited Financial Statement(s)
  • IRS Form 1023
  • Other independent financial review or compilation
    (smaller agencies)
  • Note All of these can be uploaded to GuideStar!

11
Common questions
  • Tracking non-cash donations?
  • Tracking volunteer hours?
  • Performing comparables checks for salaries?
  • Guidelines for conflict of interest and other
    governance issues?
  • Separating program, management general, and
    fundraising expenses?
  • Temporary versus permanently restricted funds?

12
About the Presenter
Having worked in the nonprofit and governmental
sectors since 1997, Gail Merridew currently works
as Community Impact Grants Manager for United Way
of Greater Richmond Petersburg. Gail has taught
the Form 990 class for Nonprofit Learning Point
since 2005. As a staff member who is called upon
to review grant applications, audited financial
statements and related Forms 990 for potential
partner agencies, Gail is very aware of the
impact that these documents can have when funders
make grant award decisions.
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