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Must CPA prepare nonprofit’s Form 990?

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Must CPA prepare nonprofit’s Form 990?

Must a Certified Public Accountant prepare a nonprofit's annual Form 990 tax information return?  Will it make a difference to potential funders if a non-CPA prepares a 990?

There is no requirement that a CPA prepare a nonprofit’s Form 990.  Anyone can prepare the return.  An authorized officer of the organization has to sign the return and say, under penalty of perjury, that to the best of the officer’s knowledge and belief it is true, correct and complete.  The officer may feel more confident that that statement is accurate if the Form is prepared by someone who understands numbers and the requirements of the Form, but that person does not need to be a CPA.  Many returns are prepared by a volunteer treasurer or a CFO who knows accounting and finance, but is not actually certified as a public accountant.

If anyone other than an employee of the organization is compensated for preparing, or assisting in the preparation of, all or substantially all of the Form, that person must obtain a Preparer Tax Identification Number (“PTIN”) to give the IRS when signing as the preparer immediately below the officer’s signature on the first page of the return.  Virtually anyone can obtain a PTIN.  The application asks only for the applicant’s Social Security Number, personal and business information like name, address, and contact information, a copy of the previous year’s individual tax return, “explanations for felony convictions (if any),” explanations for problems with individual or business tax returns if any, the $19.75 user fee, and “if applicable” any U.S.-based professional certifications such as CPA, attorney, or enrolled agent.  The IRS says that felony convictions and discrepancies on individual or business tax returns “may” affect the ability to obtain a PTIN, and “generally” a person presently incarcerated for a felony conviction will not be approved, but neither history is an absolute bar to being approved.

I doubt that sophisticated potential funders will be significantly more impressed because a return is signed by a CPA.  A lot of CPAs don’t have much experience with 990s and therefore don’t do them very well.  That can be pretty obvious when the returns are reviewed by someone who does understand them.  Just as it would be foolish for a business to rely on me, as an attorney, to prepare a report for the Securities and Exchange Commission, it would be foolish for a nonprofit to rely on a CPA who has little or no experience with 990s to prepare the return.  A CPA certification, by itself, is no assurance of competence in a specific area of practice.

Tuesday, January 23, 2024


I agree that many CPAs don't do a very good job of preparing 990s. It's a very specialized area and they are labor intensive. I've seen some pretty good 990s prepared by in-house financial managers with years of experience. I don't know about other states, but Florida nonprofit statute 496.407, and the instructions to the FL solicitation registration form require that for organizations with annual contributions of at least $500,000, the 990 submitted with the annual registration "must be prepared by a certified public accountant or another professional who prepares such forms or schedules in their ordinary course of business." So that would include enrolled agents or I presume anyone with a PTIN.

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