Exempt Organizations Advisory - 2005 Tax Forms Available to Exempt Organizations

Exempt organizations tax form packages are now available electronically for download on the IRS website. Included is Form 990, which was released in draft form in October of last year.

The final version of the Form 990 incorporates the following revisions:

• Part V, "List of officers, directors, trustees, and key employees," has been broken into two parts, so that both current and former officers, directors, trustees, and key employees must be listed.
• Part V-A, Question 75 lists four new questions which require the following information about current officers, directors, and trustees: (1) the number of officers, directors, and trustees permitted to vote on organization business at board meetings; (2) whether the current officers, directors, and trustees or the highest compensated employees or professional and other independent contractors listed in Schedule A are related to each other through family or business relationships; (3) whether the current officers, directors, and trustees listed in Schedule A or the highest compensated employees or professional and other independent contractors listed in Schedule A receive compensation from any other organizations, whether tax exempt or taxable, that are related to the organization through common supervision or common control; and (4) whether the organization has a conflict of interest policy. Additional information must be supplied in attached statements for affirmative answers.
• Part VI, Questions 91 (b) and (c), includes two questions related to foreign activities: whether the organization has an interest in or a signature or other authority over a financial account in a foreign country, and whether the organization maintains an office outside of the United States.
• Schedule A, which 501(c)(3) organizations must file along with the Form 990, requests additional compensation information for employees and independent contractors who are paid over $50,000. Part I requests information regarding compensation of the five highest paid employees other than officers, directors, and trustees. The revised Part II is broken into two new categories: Part II-A, Compensation of the Five Highest Paid Independent Contractors for Professional Services; and Part II-B, Compensation of the Five Highest Paid Independent Contractors for Other Services.

These packages will be mailed to exempt organizations in late February, with the exception of those organizations that filed their prior returns electronically. Soon after this mailing, the packages will be available in IRS walk-in centers.

For more information on this topic, please contact Catherine W. Wilkinson, Suzanne Ross McDowell, or the Steptoe attorney(s) with whom you usually work.

The Exempt Organization Advisory is a general summary of the law and is not intended as specific legal advice for any organization.

Internal Revenue Service - Circular 230 Disclosure: As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

Questions and comments about the Exempt Organizations Advisory are always welcome and should be sent to bstone@steptoe.com.