One of Your Organization’s Most Visible Documents: Understanding IRS Form 990
Internal Revenue Service (IRS) Form 990 is an exhaustive, complicated tax filing that goes well beyond simply reporting annual financial results. Further, the report is available publicly, seen by prospective donors, nonprofit analysts, the news media and others interested in the tax-exempt arena. This means nonprofit leaders should make time to become familiar this report and understand the information it communicates to these many audiences.
The ultimate goal of filing the Form 990 is to satisfy IRS requirements and preserve an organization’s tax-exempt status. Organizations designated as charities have an additional objective: that is to demonstrate each year, via the public support test, that they continue to qualify as a publicly-supported organization.
Essential to this required tax filing is to ensure that the Form 990 is complete and accurate. The starting point for accuracy is identifying which form a nonprofit organization needs to file, and for which year. For fiscal year-end nonprofits, it is critical to identify the correct tax year: file the wrong year, or skip the correct year filing, and the IRS will consider that year as never having been filed.
Mary Jo Alexander is tax director at Mauldin & Jenkins, LLC.
Register for our upcoming webinar on 990 Prep Essentials
Learn more about Form 990 essentials and filing requirements by participating in our special webinar on April 30. In this session, participants will learn how to navigate the purpose, data and disclosure requirements of the 990 form as well as understand the difference between the Form 990 and other financial statements.
The webinar is complimentary for GCN members. Non-members may participate for a small fee.