Form 990 Redesign & Reporting Project
As part of the IRS Compliance Initiative, the Form 990 redesign project will most likely focus on reducing the number of places the same information is reported on the form and requesting specific information to identify potential noncompliance areas such as loans to officers and directors.
There are twenty-four compensation related items on Form 990 and if they are not completed properly or perceived anomalies not explained, this could lead to a compliance check, single issue examination. The Redesign Project report showed that many organizations did not answer questions correctly or provide enough supporting information. Specific issues have arisen regarding excess benefit transactions and whether all benefits are being properly reported as compensation. It is important for organizations to work with their accountant, auditor or consultant to ensure the document is being completed accurately.
Additional time should be spent determining whether 990 data reconciles with the individual W-2 and if it does not, to explain reasons for the lack of reconciliation.
The IRS has revised the current Form 990, Schedule A (and instructions) and is in the process of carrying out the most significant overhaul of the Form in 25 years for release in 2010. Summer 2007 should bring us a draft for public comment and any revisions to the current Form are merely a band-aid between now and then.
If you have questions on completing Form 990, Yaffe & Company, Inc. can help. Please contact us for more information.