April 8, 2013
The Form 990 provides the public with financial and organizational information about a given non-profit association and is often the only accessible source of such information. The 990 is an informational return that is used by government agencies to prevent non-profits from abusing their tax exempt status.
Here are a few things that non-profits should keep in mind about the Form 990:
- Submit your form on time. Know the due dates for submitting your 990.There are two extensions that can be granted after the initial due date. For example, as association with a 12/31 yearend would have their 990 due by the following dates:
- 5/15 – initial due date
- 8/15- can get 90 day extension by filing Form 8868 part a
- 11/15 – can get an additional 90 day extension by filing Form 8868 part b. This date is the absolute last date to submit a 990. Significant penalties ($100/day) are assessed after 11/15.
- Be prepared to share it. Public Inspection regulations state that an organization must provide copies of its three most recent Forms 990 to anyone that requests them, whether in person, by mail, fax or email. Additionally, requests may be made via the IRS using Form 4506-A, and PDF copies can be found online on sites such as Foundation Center’s 990 Finder, Guidestar.org and the National Center for Charitable Statistics.
- Educate about your organization in the form. A mission statement is included in Form 990. If your organization has no formal mission statement, you should develop one. Additionally, there is a section that allows you to describe the organization’s program service accomplishments. This is a great opportunity to talk about the relevant activities of the organization (research, conference, education, advocacy, etc.). Remember, the Form 990 is informational and available to the public, so you should not miss the chance to communicate your organization’s accomplishments.
- Make sure you’re meeting the requirements for governance. The new 990 that was released in 2007 has some additional requirements for governance. Essentially, the association has to document whether certain policies are in place. Among the most prominent are – does the organization have in place conflict of interest, whistleblower and document retention and destruction policies? Are all board members named in the return? Are meetings documented by the drafting of board minutes? Is a copy of the 990 circulated to all board members prior to filing?
- Disclose full financial statements. You need to include both statements of financial activity and financial position for the current and prior year.
- Beware your UBIT revenue and lobbying expenses. The 990 is an informational return, however, a potential liability arises relative to UBIT – unrelated business tax, and lobbying. In the case of UBIT, revenue, less deductions for expenses that are directly connected to those activities are taxable. In lobbying, expenses attributable to lobbying, less any portion of assessments or dues that were communicated to members are being non-tax deductible, is taxable to the association.
The Form 990 is a very important –and mandatory—tool for non-profit organizations to complete. Make sure that your organization’s form is comprehensive and accurate so that anyone looking to learn more about your organization has all the information they need.