As nonprofit organizations have increased in size and scope, the Internal Revenue Service (IRS) has continued to revise the Form 990 to facilitate financial and organizational transparency.
On January 21, 2012, the IRS issued the final 2011 version of Form 990, Return of Organization Exempt From Income Tax, and the related instructions and schedules. The latest version of the form contains notable changes, which include the following:
Report Foreign Investments
In other words, any investment held outside the United States in foreign partnerships, foreign corporations, and foreign entities with an aggregate book value of $100,000 or more at any time during the tax year must be reported.
Funds transferred into non-interest bearing accounts outside the United States to be used in the organization's program services are not reportable as investments. Once the funds are used for the program services, however, they are reportable as expenditures in Schedule F.
Disclose Distribute Share of Joint Venture Assets Per Schedule K-1
Explain Reliance Placed on Related Organizations for Establishing Compensation
Explain Delegation of Authority to Committee
Explain if the governing body delegates broad authority to an executive committee or similar committee in Schedule O.
These are a few of the changes made to the 2011 Form 990. See the 2011 instructions at http://www.irs.gov/pub/irs-pdf/i990.pdf for more information.
By Paul M. Doetsch, CPA, CMA, Partner, pdoetsch@legacycpas.com