IRS Releases Final 2008 Form 990

Contrary to what was reported by the IRS (and me) last week the IRS has released the new form 990. From the press release:

The final form released today retains the redesigned draft’s format of a core form and a series of schedules. In response to public comments, the new core form allows an organization to describe its exempt accomplishments and mission up-front and provides more opportunities throughout the form for the organization to explain its activities. Other major changes were made to the form’s summary page, governance section, and various schedules, including those relating to executive compensation, related organizations, foreign activities, hospitals, non-cash contributions and tax exempt bonds. A checklist of schedules was also added.

The new form will be for tax year 2008. There will also be a phase in process for those to file based on budget size:

Organizations with gross receipts over $1.0 million or total assets over $2.5 million will be required to file the Form 990. For the 2009 tax year (returns filed in 2010), organizations with gross receipts over $500,000 or total assets over $1.25 million will be required to file the Form 990. The filing thresholds will be set permanently at $200,000 gross receipts and $500,000 total assets beginning with the 2010 tax year. Also, starting with the 2010 tax year, the IRS will increase the filing threshold for organizations required to file Form 990-N (the e-postcard) from $25,000 to $50,000.

You can down load the new forms here. The IRS plans to release the related instructions for them in early 2008.

Earned Income Tax Credit Notification

California Employers will have a many new laws come January 1st, 2008, but here is one in particular worth noting. Starting in 2008 employers are required to let employees know about the Earned Income Tax Credit. You must provide notification to your employees by either handing it directly to your employee or mailing it to your employee's last known address. Posting of this information on an employee bulletin board will not satisfy the notification requirement.

IRS 2008 Implementation Guidelines

The IRS has just released a PDF of its FY 2008 Implementation Guidelines. It contains the program guidance for implementing the Exempt Organizations portion the IRS's Strategic and Program Plan for the coming fiscal year.

Among the highlights:

1. Details of the updated form 990 will not be released until the first quarter of 2008 rather than the end of 2007 as previously reported by the IRS.
2. More attention to executive compensation.
3. Further looking into charitable trusts.

Download a copy to find out what the IRS has in store for us in 2008, I'll also try to keep updates here as soon as they happen.

FASB 116 & 117

Since we talk about them so much in the boot camps, and the govern so much of what we do in keeping our nonprofits books, I thought I would link to the sources and list a quick summary of them. Enjoy!

Statement No. 116 Accounting for Contributions Received and Contributions Made

This Statement establishes accounting standards for contributions and applies to all entities that receive or make contributions. Generally, contributions received, including unconditional promises to give, are recognized as revenues in the period received at their fair values. Contributions made, including unconditional promises to give, are recognized as expenses in the period made at their fair values. Conditional promises to give, whether received or made, are recognized when they become unconditional, that is, when the conditions are substantially met.

This Statement requires not-for-profit organizations to distinguish between contributions received that increase permanently restricted net assets, temporarily restricted net assets, and unrestricted net assets. It also requires recognition of the expiration of donor-imposed restrictions in the period in which the restrictions expire.

Statement No. 117 Financial Statements of Not-for-Profit Organizations

This Statement requires that all not-for-profit organizations provide a statement of financial position, a statement of activities, and a statement of cash flows. It requires reporting amounts for the organization's total assets, liabilities, and net assets in a statement of financial position; reporting the change in an organization's net assets in a statement of activities; and reporting the change in its cash and cash equivalents in a statement of cash flows.

This Statement also requires classification of an organization's net assets and its revenues, expenses, gains, and losses based on the existence or absence of donor-imposed restrictions. It requires that the amounts for each of three classes of net assets-permanently restricted, temporarily restricted, and unrestricted-be displayed in a statement of financial position and that the amounts of change in each of those classes of net assets be displayed in a statement of activities.

This Statement amends FASB Statement No. 95, Statement of Cash Flows, to extend its provisions to not-for-profit organizations and to expand its description of cash flows from financing activities to include certain donor-restricted cash that must be used for long-term purposes. It also requires that voluntary health and welfare organizations provide a statement of functional expenses that reports expenses by both functional and natural classifications.

New Law Restricts Use of Employees' Social Security Numbers

HRCalifornia.com reports about a new law that goes into effect on January 1, 2008 restricting employers' use of employees' Social Security numbers.

Employers are prohibited from the following:

• Public posting or displaying of an individual's Social Security number.
• Printing an individual's Social Security number on any card required for the individual to access products or services provided by the person or entity.
• Requiring an individual to transmit his/her Social Security number on the Internet unless the connection is secure or the Social Security number is encrypted .
• Requiring an individual to use his/her Social Security number to access a Web site, unless a password, unique identification device or unique personal identification number also is required to access the site. This may require a change in systems used to access or transmit personal, business, human resources or payroll information on the Internet.
• Printing an individual's Social Security number on any materials that are mailed to the individual, unless state or federal law requires the Social Security number to be on the document mailed.

Go to www.HRCalifornia.com for more info about this issue and all other employment issues that affect California employers

An IRS Phish

I think I wrote about this in earlier this year. The IRS doesn't contact you about rebates by email, please do pass these warnings on to the more trusting friends or relations of yours.