Executive Review Guidelines for IRS Form 990: Archived Webinar, Podcast and Key Takeaways

In December of 2008, the IRS released what has been coined as the “New Form 990.” The driving forces behind the revised form included pressure on the IRS from Congress to closely monitor tax-exempt organizations and the need to publicly disclose more information about nonprofits’ financial stability to the variety of users who access the document. The IRS’ guiding principles behind developing the new form were to enhance transparency, promote compliance and minimize the burden on filing organizations. On numerous occasions the IRS released statements indicating that the new version of the Form 990 was meant to augment governance practices, increase tax law compliance, and further support nonprofits as they work to fulfill their mission and charitable purpose. However, many nonprofits and their executives still struggle with some of the nuances that are at play in the Form 990.

In a recent webinar, “Executive Review Guidelines for the IRS Form 990,” we addressed some of those nuances and how nonprofit executives can effectively evaluate their Form 990 prior to filing with the IRS. During the webinar, which can be accessed online at any time, attendees were provided with helpful guidelines around performing a top level review of the Form 990, including how to assess the overall financial stability of their organization and how to adhere to industry best practices. Attendees of the presentation asked several questions about particular sections of the Form 990.

Here are a just a few of those inquiries:

How much information should be provided in the “Summary of Program Service Accomplishments” section?
Part III of the Form 990 goes into further detail about the mission of the organization, changes during the year that affected its ability to realize certain goals, and specific accomplishments tied to program revenue and how it was spent. Given this is a public document accessed by many people including funders and potential donors, it in the organization’s best interest to use this opportunity to showcase a bit of “PR” and elaborate on the organization’s story.

Is it advisable to establish a full audit committee that devotes it’s time to managing the audit process and reviewing the Form 990?
While establishing an audit committee is not required, the IRS has specified that it is a governing best practice. In the Form 990, you will be required to disclose whether or not your organization has established an audit committee and what their work entailed. If you are considering adopting this best practice and need additional guidance, we recommend visiting our microsite Effective Audit Committees for Nonprofit Organizations.

What is the most common mistake you see organizations make on the Form 990?
The Form 990 should be prepared and finalized by a CPA and/or a licensed audit firm, which will greatly decrease any discrepancies in reporting. The most common error we see on the Forms 990 is very minor – board members’ names are spelled incorrectly. This will have no effect on your filing status, but as a good rule of thumb, be sure to closely proofread your work.

If you missed the initial presentation or would like to share it with other executives at your organization, you may access the on-demand webinar and podcast anytime. A full list of questions and answers is available. You may also want to download and save our full guide, Executive Review Guidelines for the IRS Form 990.

The webinar and podcast recordings are complimentary and are intended for our valued blog readers, clients and contacts serving the nonprofit community. CPE credit is not available for these recordings at this time.