Nonprofits may have to disclose more to IRS (Tell the IRS what you think about new 990 form)

The Orange County Register ^ | June 14, 2007 | RONALD CAMPBELL

[Between the Lines]

The tool donors use to learn about nonprofits is getting a makeover.

The Internal Revenue Service on Thursday released a newly redesigned Form 990 and asked for comments from the public and from nonprofits.

The form is filed annually by more than a million nonprofits, including such prominent local institutions as Chapman University, Hoag Hospital and the Orange County Performing Arts Center. By law, nonprofits must make their last three years' 990s available to anyone who asks.

Since its last remodel in 1979, Form 990 has been repeatedly tweaked, with many new line items squeezed in like new appliances in an old kitchen. As a result, IRS Exempt Organizations Director Lois G. Lerner said, it no longer serves anybody very well.

Once intended purely as a way to tell the IRS how much money tax-exempt groups were raising and spending, Form 990 has evolved into the public's principle source of information about nonprofits. A popular website, GuideStar, provides free, downloadable copies of 990s for several hundred thousand charities. Other sites such as Charity Navigator and the Better Business Bureau Wise Giving Alliance rate charities based on their 990s.

Lerner said the IRS hopes the new form will make nonprofits more transparent, giving donors more accurate information and letting them compare charities more easily. At the same time it should help the IRS and state charities regulators enforce the law without unduly increasing paperwork for nonprofits.

The most dramatic change from the current Form 990 comes on the front page. Instead of just providing financial information, as the current form does, the new front page includes details about the nonprofit's mission, governance, employment and the top salary it pays.

The new 990 also requires much more detailed disclosures by nonprofit hospitals and by charities that loan money or pay non-cash compensation to key employees.

[Between the Lines]

The redesigned form and supporting materials are on the IRS website.

The comment deadline is Sept. 14. The IRS plans to roll out a final version of the new Form 990 early next year. Nonprofits would file it and the public could begin using it in 2009.

"I think the (nonprofit) sector should comment, I think the press should comment, I think the public should comment," Lerner said.

[Always Right]

If Churches were smart, they would not register as 503(c)3, but enjoy the automatic tax-exempt status that churches have. Registering makes in cleaner for the CPA’s, but it puts the Church under the authority of the IRS.

[Alex Murphy]

If Churches were smart, they would not register as 503(c)3, but enjoy the automatic tax-exempt status that churches have. Registering makes in cleaner for the CPA’s, but it puts the Church under the authority of the IRS.

AMEN! I couldn't have said it better myself!

[xzins]

Governmental invasion of privacy is a huge reason for going to some form of national sales tax. Many have financial reasons for supporting or not the sales tax idea, but removing the IRS would certainly enhance personal privacy.

The ONLY reason this information about so-called non-profits is being collected is because of our form of taxation.