A national organization that CAN is a member of, the National Council of Nonprofit Associations, is hosting a call with the IRS abut the new form 990. CAN members can participate on this call in two ways:
- Join in on the call! It is only $10.00 (to cover the costs of the call) and will be an invaluable opportunity to express your questions, concerns and / or praise for the redesigned form.
- Post your questions below about the form so that I can submit them to the IRS rep and ask them on the call for you. Please post any questions in the comments section below and I'll make sure they get the attention they deserve.
Posts
4 comments:
Selections of comments emailed to CAN:
"I have advised several hundred nonprofit active organizations throughout the US and in most cases found that the board of directors of those organizations had no concept of what their fiscal responsibility to their donors and the public meant.With over a million nonprofits now operating in the United States the new 990 reporting procedures are sorely needed."
More comments:
"As a new 990 filer this year, we wanted to be able to acknowledge pro bono contributions from consultants. These contributions have been very meaningful in supporting our organization, yet there was no way for us to account for these contributions and keep within the IRS rules. It's probably obvious, but we feel that our non-profit would benefit significantly from a rule/form change related to this since:
(1) If consultants could be recognized as making a contribution at a dollar value it would reduce their tax liability and this in turn would encourage more consultants to provide pro bono services; and
(2) In a real way, when our organization receives this value from pro bono services, the value of our organization increases both in terms of the value of the services we provide to youth and in the perception of our organization in our community (which in turn can affect our budgets and grants received).
Perhaps a rule change such as proposed above could be made along with a maximum amount of pro bono contributions that would be recognized by the IRS."
And another comment via email:
"We definitely see the need for reasonable and efficient regulation of the nonprofit sector. It is essential that abuses in this sector are weeded out. We strongly support the processes currently in place in the 990 reporting system and believe that the current processes are fully adequate to address these abuses. Between the current 990 process in place and the powers of intermediate sanctions already held by the IRS, the Agency has all of the regulatory authority and information that it needs to go after abusive nonprofit corporations.
Unfortunately, often when government agencies find potential abuses, rather than utilize the existing rules and procedures to penalize the abusers, the reaction is to implement new rules and regulations that end up punishing everyone without singling out any of the abusers. That is certainly the case here in the proposed new regulation, wherein virtually all non profits would need to fill out massive amounts of new and additional paperwork in order to operate. As we understand it, the proposed new rule calls for a new core 990 Form of 10 pages accompanied by up to 15 additional schedules.
Politicians consistently speak against the burden of over regulation and how it damages the efficiency of the private sector. What is often lost in this debate is that this same type of overregulation severely damages the ability of the nonprofit sector to deliver the critical human services needed throughout the country."
Even More Comments:
Part 1, Line 8 – This computation takes the program related key employee compensation as a percent of total program expenses. I believe the concept is a good one, but it should be total compensation divided by total expenses (column A instead of B).
Part 1, Summary – I do not see any value in the Gaming & Fundraising boxes, either to the public or the organization, on the bottom of the page.
Part 3, Governance – This will be problematic for most organizations. In particular:
#4 and #5 are ridiculous for small nonprofits and I believe should be eliminated.
#10 asks if the governing body reviews the Form 990. I know of no organization that has its board review the Form 990 so this should be eliminated.
Part 5, Statement of Functional Expenses – Line 23, other expenses has only six lines. You should add a place on Schedule “D” either for the detail of these expenses or as an overflow. That will avoid an attachment.
Part 8, Other I.R.S. Filings – Questions 9a and 10a (the number of W-2’s and 1099’s filed) are really not meaningful numbers in any way, so I would suggest just asking the yes or no question.
Part 9, Program Accomplishments – The “direct revenues” column will be virtually impossible for small organizations to accurately accumulate and I am not entirely sure what benefit it provides the reader.
Schedule A, Part 2, Line 16 – Most organizations that have been around any length of time have no idea what the effective date of exemption is. I would suggest you eliminate that line.
Schedule A, Parts 2 and 3, Line 20 – Currently when an organization files a Form 990-PF the first year there is a mismatch and it generates considerable I.R.S. correspondence. This problem should be addressed before the new form is released.
Schedule D, Part 12 – Going back four years will be a great burden, especially in the first year. I wonder what this tells the I.R.S. or the reader? Perhaps going back two years would be better.
Schedule D, Part 13 – This schedule seems needlessly confusing. A simple reconciliation would be adequate.
Schedule J, Part 1 – Column “E”, “nontaxable expense reimbursements” has nothing to do with compensation and will be very difficult to accurately track. For example, if parking is reimbursed this must be tracked? I understand you are looking at total compensation, and there can be significant abuse in this area, but to include this as an element of compensation seems a bit overreaching.
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