Form 990 is a “Return of Organization Exempt from Income Tax” that provides the IRS annual financial information. It is used by government agencies to stop organizations from abusing their tax-exempt status.
Even after significant revisions to Form 990 in 2009, the IRS has struck again. Now, more tax-exempt organizations will be required to file a Form 990 or 990-EZ, instead of the much simpler 990-N. The table below shows the filing thresholds for 2010 as compared to 2009.
Filing Thresholds for 2010
|Form 990||2010 Amounts||2009 Amounts|
|Gross Receipts Equal or Greater Than||$ 200,000||$ 500,000|
|Total Assets Equal or Greater Than||$ 500,000||$ 1,250,000|
|Form 990-EZ (short version)|
|Gross Receipts Less Than||$ 200,000||$ 500,000|
|Total Assets Less Than||$ 500,000||$ 1,250,000|
|Form 990-N (e-Postcard)||$ 50,000||$ 25,000|
The new Form 990 disclosures are extensive and will require some exempt organizations to change their policies and procedures. For example, to answer all of the questions in the affirmative, some organization may see more intensive involvement by its board of directors and the adoption of expanded governance practices, including developing written policies on gift acceptance, conflicts of interest, document retention, and whistle-blowers. The IRS will also use the new Form 990 to monitor executive compensation.
Tax-exempt organizations that now meet a higher threshold should plan for early involvement of its board of directors and the organization’s management.
As always, if you have questions please call Brad Marckx, Laura Dees, or Lesley Hamilton at BKM Sowan Horan, LLP.