Tag: Form 990

As a key constituent at your nonprofit, protecting yourself and your organization is no easy task, and inaccurate tax preparation and filings on forms such as the Form 990 are one way that your organization can easily be in trouble. The good news is that you don’t have to figure it all out alone. Beck and Company’s Certified Public Accountants and Business Advisors are trained in these areas and are here to help. Our tax services are designed to help you file all of your nonprofit-related forms with peace of mind.

Last week, we took a look at how Form 990s are often misunderstood or not sufficiently understood, what risks these misunderstandings could create, the importance of seeking professional help in filing Form 990s, and what Form 990s include. To learn more about the Form 990 and what you need to know on general terms, visit here.

By now, it should be clear that protecting yourself and others from penalties is important, but how do you ensure that this happens (in addition to the help you receive from a professional CPA)? How do you actually know what must be filed on Form 990 returns? The following information will help you to be informed when it comes to filing Form 990s and all of their nuances. The questions below are meant to assist you with any future tax compliance filings and the process of informing and education boards and management teams alike. All key constituents (officers, directors, trustees, key employees, management, presidents, board members, etc.) should be sufficiently informed to be able to answer these questions.

1. Do all members of the governing body of your organization have a complete copy of the Form 990 that is supplied prior to filing?
2. Did your organization become aware of or engage in any excess benefit transactions in the past tax year?
3. Did your organization have any receivables from or payables to key constituents recorded on its financial statements?
4. Was any grant or assistance given to any of these key constituents or their families by the organization?
5. Was your organization a party to a business transaction with any of these current or past key constituents, employees, or their family members?
6. Do any donor-advised funds, where the right to advice on distribution or use of funds/accounts was granted, exist?
7. Did your organization hold assets in endowments of any kind?
8. Has your organization had any international financial accounts?
9. Did any key constituent have a relationship (familial or business) with any other key constituent?
10. Have substantial and significant changes been made during the tax year to governing documents?
11. Is a written conflict of interest policy in place that requires annual interest disclosure that could give rise to conflicts? If so, was this monitored and enforced regularly and with compliance?
12. Does your organization have written policies for: whistleblowing, document retention, and document destruction?
13. Does compensation determination follow a review and approval procedure with sufficient data and deliberation before a decision is reached? (A review of Form 990, Part VII is highly recommended.)
14. Does your organization have an audit, review, and compilation committee responsible for oversight of financial statements and independent accountant selection?
15. Is a gift acceptance policy used for non-standard contributions?

If key constituents can answer these questions, they will be on the right track to completing the Form 990 or reviewing it with sufficient information to avoid penalties and give accurate reporting information. With some education, information, and review, you can save your organization from lots of headaches and potential disaster in the eyes of the public, press, and IRS. Don’t leave your key constituents uninformed.

Beck and Company CPAs would like to assist any key constituent with filing the Form 990. Contact us to get the nonprofit tax assistance you need to be successful at tax time.

With tax time looming, tax forms and reporting are likely on your mind to some extent by now and will become even more prevalent in the next few weeks and months. Tax reporting issues can be costly in many ways, both financially and to the future health or even existence of tax-exempt and nonprofit organizations. Over the years, Beck and Company’s Certified Public Accountants and Business Advisors have seen that many nonprofits and their boards are not as aware as they should be of what data and information is expected to be reported and needs to be reported on Form 990 returns. Without proper understanding of this information, there is also a risk of not being aware of the penalties that are possible to incur if these Form 990 forms are filed late, are inaccurate, or are left incomplete.

As a member of the board of directors, a trustee, or a staff member of a nonprofit, it is your duty and responsibility to review the Form 990 sufficiently to help protect both yourself and your organization from penalties. Although not an IRS requirement, it is certainly a best practice and strongly encouraged that boards review Form 990 information. By submitting proper information in a timely manner, you offer three forms of protection. You protect your organization from losing its exempt status. You also protect the organization from incurring potential financial penalties. Finally, you protect board members from the possibility of owing money personally from personal penalties.

Beck and Company’s Certified Public Accountants and Business Advisors understand that these forms are confusing, complicated, and overwhelming. Not only that, but it is difficult for those of you working at nonprofit organizations, who should be focused on the important work and mission of the organization, to truly understand them and what is expected on them. The intricacies necessitate trained professionals who are well versed in the forms and understand the legalities and complexities well. As you can see, inaccuracies can be costly to your organization’s future, but you don’t have to worry about those if you solicit the help of a professional tax advisor. Learn more about Beck and Company CPA’s tax services and the ways we can help you so your tax preparation and filing are done correctly.

Now that you understand that Form 990s and other tax forms are often misunderstood or not understood by boards and nonprofit staff members, that there are risks to inaccurately filing Form 990s but also ways to protect yourself, and that a professional tax advisor or Certified Public Accountant (CPA) is likely a necessity in helping taxes get filed properly, let’s take a quick look at a general overview of Form 990 including what it is, when it needs to be filed, and what is included on the form.

What is the Form 990?

The IRS Form 990, officially referred to as the “Return of Organization Exempt from Income Tax,” is the tax document that tax-exempt, nonprofit organizations file each year with the IRS. The Form 990 allows the IRS and the public to evaluate nonprofits and how they operate.

The Form 990 requires disclosure of potential conflicts of interest, compensation of board members and staff, and other details having to do with financial accountability and avoidance of fraud.

When do you file the Form 990?

Your filing depends on your fiscal year end date. You are required to file by the 15^th day of the 5^th month after your fiscal year period ends.

What information is required on the Form 990?

Besides general contact information, the form includes a Statement of Program Service Accomplishments, a Checklist of Required Schedules, Statements regarding other IRS Filings and Tax Compliance, Governance, Management, and Disclosure information, Compensation figures, a Statement of Revenue, a Statement of Functional Expenses, a Balance sheet, Reconciliation of Net Assets, Financial Statements and Reporting.

Next week, we will take a closer look at what key constituents truly need to understand and know about Form 990 information that is filed so they can differentiate that from what they can leave to the professionals. Beck and Company CPAs would like to assist you and your organization in filling out the Form 990. Contact our CPAs today to get the nonprofit tax assistance you need.