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IRS Issues Form 990 Preparation Checklist

Tax-Exempt Organizations

With the May 15 filing deadline for calendar-year tax-exempt organizations fast approaching, the Internal Revenue Service has issued a preparation checklist for the new Form 990. (Note that private foundations do not file the Form 990.) The checklist highlights a number of practical issues involved in the preparation of the new Form 990. We note in particular:

  • Tax-exempt organizations should determine whether they are eligible to file the Form 990-EZ in lieu of the full Form 990. Those organizations with gross receipts between $25,000 and $1 million and total assets less than $2.5 million may file the Form 990-EZ for the 2008 reporting period.

  • The new Form 990 has additional questions regarding mission and activities, governance, executive compensation, and insider transactions that are best addressed using a team approach. Organizations should involve not only financial staff but also program leaders, legal and public relations advisors, and others in the preparation of the Form 990.
  • The new Form 990 includes specific questions about governance policies that the IRS thinks tax-exempt organizations should have. For calendar-year filers, organizations may answer "Yes" to questions on the Form 990, regarding whether the organization had certain policies, only if those policies were adopted by December 31, 2008. Those calendar-year filers that adopted any policies after December 31, 2008, may wish to report the status of those policies on the Form 990 Schedule O, Supplemental Information to Form 990, if space allows.

This update is intended as a general summary of legal matters and not as specific advice to any particular client. If you have any questions concerning the subject matter of this update, please contact your Quarles & Brady attorney.