The Internal Revenue Service has recently released a draft of detailed instructions for the new Form 990 tax information return that many public charities and other tax-exempt organizations will have to file next year. (IR-2008-60.)
The Form significantly expands the reporting requirements and the Boards of many organizations will want to adopt new policies and procedures so that their returns will portray the organization in the most favorable light possible.
The basic Form 990 has not been significantly revised since 1979 and, according to the IRS, “is universally regarded as needing major revision.” It has “failed to keep pace with changes in the law and with the increasing size, diversity, and complexity of the exempt sector. As a result, the current form fails to meet the Service’s tax compliance interests or the transparency and accountability needs of the states, the public and local communities served by the organization.”