Exempt Organizations Advisory - IRS Official Discusses Changes to Redesigned Form 990

By: Catherine W. Wilkinson (cwilkinson@steptoe.com)
Suzanne Ross McDowell (smcdowell@steptoe.com)

On September 28, Ronald J. Schultz of the Tax Exempt/Government Entities spoke to a meeting of the American Bar Association Section of Taxation’s Exempt Organizations Committee about the redesigned Form 990.  He discussed changes that the IRS plans to make to the redesigned Form 990 in response to public comments received.  Schultz said that the changes to the Form 990’s core form include:

1. Elimination from Page 1 of questions on compensation percentages (Lines 8a and 8b), percentage of contributions to fundraising expenses (Line 19b), comparisons of total expenses as a percentage of net assets (Line 24b), gaming percentages (Line 25), and fundraising percentages (Line 26);
2. Statement of Program Service Accomplishments (Part IX) will be moved from the back (Page 10) to the front;
3. Form 990-EZ may be eliminated, and the 990 may eventually be restructured so that it can be used for smaller organizations; and
4. The redesigned Form 990 will include a governance section but the questions asked may be different than those on the discussion draft..
   

Other likely changes will be those made to the 990’s Schedule H (hospitals), including the definition of a hospital, the community benefit table (Part I), and joint venture reporting.