IRS Forms 990: Accountability, Transparency,

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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)

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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

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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.

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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

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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.)

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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).

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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.

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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

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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

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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!

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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?

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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.