Tax Form 990 Now and Whats Next

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Tax Form 990 Now and Whats Next

• H R Block
• Margaret Schmitz, Enrolled Agent
• And Joan Baron, Enrolled Agent

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Advantages of Tax Exempt Status

• The organization is exempt from paying federal
  income tax.
• Donors may deduct contributions made to the
  organization.

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Who is qualified to be a tax-exempt organization?

• Serve some type of common good,
• Not be a for profit entity,
• Not have net earnings that benefit the members of
  the organization, and
• Not exert political influence

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Federal Reporting Requirements for 2007
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Gross Receipts

• The total dollars received from all sources
  during the annual accounting period, including
• Membership dues
• Investment Income
• Gross receipts from fund raising activities.
  (before considering expenses)

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Filing the Annual Return

• Due Date May 15th or the 15th day of the fifth
  month after the accounting period ends.
• An additional 3 month extension is available with
  sufficient reason
• Electronic filing is available or mail return to
  Internal Revenue Service Center, Ogden, UT 84201

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Information Needed for Form 990

• The Source and Amount of all receipts.
• A list of Contributors giving 5,000 or 2 of
  total receipts.
• Detailed listing of all expenses.
• Statement of Program Service Accomplishments
• Balance Sheet
• List of Officers, Directors, Trustees and Key
  Employees.

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Failure to File Penalties

• 20 per day up to the lesser of 10,000 or 5 of
  gross receipts.
• 100 per day up to a maximum of 50,000 if gross
  receipts exceed 1 million.
• No penalty will be assessed if reasonable cause
  can be shown.

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Other Disclosure Requirements

• Organization must provide the following on
  request
• A copy of their Exemption Application
• 3 Prior Years Informational Returns (Form 990 and
  990EZ)

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Other Disclosure Requirements Continued

• Written requests must be fulfilled within 30
  days.
• Requests in person must be fulfilled in the same
  day.
• Effective May 17, 2006 100 per day for each
  day late up to 10,000

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New for 2007E-Postcard

• For tax-exempt organizations whose annual gross
  receipts are 25,000 or less and are not required
  to file Form 990 or 900-EZ.
• Due by May 15,2008 if calendar year or filing due
  date.
• Organizations that fail to comply for 3 years may
  lose their tax exempt status.

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E-Postcard- continued

• ? Must file electronically. IRS is still
  developing filing system for the e-Postcard
• ?E-postcard will require the following
• Organizations legal name
• Any other names used by organization
• Organizations mailing address
• Organizations website (if applicable)
• Organizations EIN
• Name and address of principal officer
• Organizations annual tax period
• Statement that gross receipts are normally still
  normally 25,000 or less
• If applicable, a statement that organization is
  going out of business

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Form 990 Redesign

• Phased-in filing requirements for small
  organizations
• May file new Form 990 or Form 990-EZ
• Tax year Gross receipts Assets

Form 990-N (e-postcard) filing threshold will
increase to 50,000 in gross receipts in 2010.
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Why update Form 990?

• Form 990 not significantly revised since 1979
• IRS needed a Form 990 that reflects the way this
  growing sector operates in the 21st century
• Final form helps meet IRS goals of transparency,
  compliance and burden minimization

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Redesigned Form 990

• 11-part core form to be completed by all
  reporting organizations.
• 16 schedules to be completed only from
  organizations that conduct particular activities
• Note- Form 990 EZ will be retained in present
  form some of the new schedules for redesigned
  Form 990 will replace certain attachments.

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Redesigned 990 Core Form

• Part I, Summary- summary of mission or
  activities snapshot of key financial, governance
  and operation information
• Part II, Signature Block
• Part III, Statement of Program Service
  Accomplishments- includes new, discontinued or
  altered program services
• Part IV, Checklist of Required Schedules-answer
  questions, required Schedule will be indicated
• Part V, Statements Regarding Other IRS Filings
  and Tax Compliance
• Part VI, Government, Management and Disclosure
• Part VII, Compensation of Officers, Directors,
  Trustees, Key Employees, Highest Compensated
  Employees and Independent Contractors
• Part VIII, Statement of Revenues
• Part IX, Statement of Functional Expenses
• Part X, Balance Sheet
• Part XI, Financial Statements and Reporting-

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Redesigned Form 990 and Schedules

• Schedule A- Public Charity Status and Public
  Support
• Schedule B- Schedule of Contributors
  contributions of 5,000 or more from any one
  contributor
• Schedule C- Political Campaign and Lobbying
  Activities
• Schedule D- Supplemental Financial Statements
• Schedule E- Schools
• Schedule F- Statement of Activities Outside the
  United States
• Schedule G- Supplemental Information Regarding
  Fundraising or Gaming Activities- will also apply
  to Form 990EZ filers if gross revenue from
  special events and activities is more than
  15,000
• Schedule H- Hospitals
• Schedule I- Supplemental Information on Grants
  and Other Assistance to Organizations,
  Governments and Individuals in the US
• Schedule J- Compensation Information
• Schedule K- Supplemental Information on Tax
  Exempt Bonds
• Schedule L- Transactions with Interested Persons
• Schedule M- Non-Cash Contributions
• Schedule N- Liquidation, Termination, Dissolution
  or Significant Disposition of Assets
• Schedule O- Supplemental Information
• Schedule R- Related Organizations and Unrelated
  Partnerships

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Let HR Block Help You!

• Free evaluation of your units compliance.
• Speakers to assist you educate your members and
  consumers on a variety of issues.
• Easy fund raisers.