IRS Completely Redesigns Form 990 for the 2008 Tax Year

(Tax Planning Alert dated July 13, 2007)


The Internal Revenue Services has released for public comment a discussion draft of a redesigned Form 990, Return of Organization Exempt from Income Tax, the form filed by many public charities and other exempt organizations. The draft Form 990, Schedules A through R, and instructions as well as other key information are located on the IRS Web site, IRS.gov/eo. Use the following link for direct access to the forms and instructions on the IRS website link.

The IRS anticipates using the redesigned form for the 2008 tax year (returns filed in 2009). Questions and comments can be emailed to the IRS at Form990Revision@IRS.gov or mailed to the address below, but are due no later than September 14, 2007.

Internal Revenue Service
Form 990 Redesign, SE:T:EO
1111 Constitution Avenue, NW
Washington, DC 20224

The redesigned Form 990, which is a complete overhaul of the prior Form 990, consists of a 10-page core form to be completed by each Form 990 filer. In addition, the redesigned form’s 15 schedules are designed to require reporting of information from organization’s that conduct particular activities including a new schedule for hospitals. The new Form 990 and associated schedules will require more detailed information about each tax-exempt organization in both a qualitative and quantitative nature. As a result, the compliance burden will likely increase for both gathering and reporting this information for most tax-exempt organizations.

Among the highlights of the new form are the following:

• A summary page providing the organization’s identifying information and a snapshot of the organization’s key financial, compensation, governance, and operational information.
• A portion of the form requiring governance information including the composition of the board, and certain other governance and financial statement practices.
• Schedules that will focus reporting on certain areas of interest to the public and the IRS: fundraising, compensation, tax-exempt bonds, non-cash charitable contributions and hospitals. The schedule hospitals will be required to complete is broken down into the following five parts:
  • Part I requires information on Community Benefit which has been adapted from “A Guide for Planning and Reporting Community Benefit”, by the Catholic Health Association of the United States.
  • Part II requires information on Billing and Collection Practices.
  • Part III requires information on Management Companies and Joint Ventures, focusing on understanding the structure of the organization and any inurement or private benefit issues.
  • Part IV requests General Information on exempt activities and community needs assessment.
  • Part V requires an identification of all of the facilities an organization operates for the provision of hospital and medical care.

If you would like to discuss the redesigned Form 990 and how it could affect your tax-exempt organization’s compliance, reporting or other processes, please contact Terry Haefner, Eddie Phillips, or Debbie Ernsberger at (800) 270-9629.

WE ARE REQUIRED BY IRS CIRCULAR 230 TO INFORM YOU THAT THE FOLLOWING DISCUSSION WAS NOT INTENDED OR WRITTEN TO BE USED, AND IT CANNOT BE USED, NOR RELIED UPON, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW. THE ADVICE WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED IN THE DISCUSSION. EACH TAXPAYER SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

The information provided via PYA Alert, Tax Planning Alert, or Audit and Accounting Alert should not be construed as accounting, auditing, consulting, or legal advice on any specific facts or circumstances. The contents are intended for general information purposes only.  Please contact us at (800) 270-9629 to discuss your specific situation or to discuss any specific questions you may have.

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