The IRS Form 990

What is the Form 990

Form 990 is an annual reporting return that certain tax-exempt organizations must file with the IRS. It provides information on the filing organization's mission, programs, and finances.

Due annually by May 15 unless the appropriate extension is filed. 1st extension due by August 15 2nd extension due by November 15 Use IRS Form 8868 to request an automatic 3-month extension

of time to file the 990 and also to apply for an additional (not automatic) 3-month extension if needed.

WHAT FORM MUST YOU FILE?

Effective FY 2010, any tax-exempt organization with gross receipts less than $200K or total assets less than $500K must file the 990 or 990 EZ

Any small organization with gross receipts of $25K or less must file a form 990-N, an electronic notice (postcard) with the IRS

Extensions are not available to those filing the 990-N e-Postcard.

What Happens if you Do not File a 990, 990EZ or 990N?

If you do not file your e-Postcard on time, the IRS will send you a reminder notice but you will not be assessed a penalty for late filing the e-Postcard.

However, an organization that fails to file required e-Postcards (or information returns – Forms 990 or 990-EZ) for three consecutive years will automatically lose its tax-exempt status. The revocation of the organization’s tax-exempt status will not take place until the filing due date of the third year.

The 990 Objectives

The 990 is intended to increase the transparency of tax-exempt organizations and present the IRS and stakeholders with a realistic picture of entities and their operations,

Promote Tax Compliance, and

Minimize Filing Burden to Organizations.

KEY AREAS OF THE FORM 990

The key areas of increased transparency and disclosures are in the following areas: Governance Documents*

Annual Review of the 990 by boards and executive management

Executive Compensation Political Activities and Foreign Transactions

Governance

This section helps to determine whether the organizations have policies in place that will help them stay compliant with the law.

This section has three parts– the organization’s governing body and management, its governance and management policies, and its disclosure practices.

GOVERANCE

In Part VI, Section A, question 10: Did your board review the 990 before it was filed?

What process did the board use to review the form? The process has to be described in 990-Schedule O.

How many voting members are on the governing body and how many are independent?

GOVERANCE In Part VI, Section B, question 12: The IRS wants to

know if your organization has a written conflict of interest policy.

In Part VI, Section B, question 13: Does your organization have a whistleblower policy—in other words, policies and procedures that enable individuals to come forward with information on illegal practices or violations of organizational policies?

In Part VI, Section B, question 14: Does your organization have a written document retention and destruction policy?

GOVERANCE

In Part VI, Section C, question 18: The IRS wants charitable organizations to make information about its operations, including its governance, finances, programs, and activities, widely available to the public.

The 990 lets you indicate how you make this information available: on your own website, on another website (Guidestar, for example), or upon request (at your office or via mail within 14 days, for example).

More Information

www.irs.govCLICK ON FORMS & PUBLICATIONS SEARCH FOR THE FORM BY NUMBER

Publication 557 for Tax-exempt status for your organization

Compliance Guide for Tax-exempt organization

AFFILIATE ANNUAL FINANCIAL DISCLOSURE TO ACNM-WHY?

It is required as part of our IRS “group ruling” which allowed our affiliates to gain non-profit tax status through the national organization rather than each having to do so separately.

What is a group exemption?

When the IRS recognizes a group of organizations as tax-exempt if they are affiliated with a national organization.

This avoids the need for each of the organizations to apply for exemption individually.

This is an administrative convenience for both the IRS and organizations with many affiliate organizations.

IRS GROUP EXEMPTION Requirements for both Organizations

ACNM Requirements:

Submit annual report to IRS annually on behalf of the group due Oct. 31, 2011

Develop standard governing documents

Provide each affiliate an annual financial reporting template

Affiliate Requirements:

Follow affiliate governance policies

Annual filing of 990 or 990-N postcard are current

Submit to ACNM national a brief annual financial report (template will be provided)

Affiliate Financial Requirements

1. Maintain an accounting tracking of asset, liabilities, revenue & expenses

2. Maintain the same fiscal year as ACNM National (Jan-Dec)

3. Provide a brief annual financial report to ACNM national

4. Disclose annually to ACNM national whether you have filed the IRS 990 or 990-N postcard

5. Comply with applicable state & federal laws

Federal Tax Status

Affiliates and ACNM national are classified as IRS 501(c)6 membership associations

This means that we are a not-for-profit (vs. a charitable) organization

Dues, donations, and other monies received by ACNM and/or affiliates may not be classified by individuals or organizations as charitable or non-taxable contributions but may be classified as a normal business expense.

STATE TAXES

Federal tax exemptions do not carry over into state jurisdictions

Each affiliate should contact its state department of revenue to determine state tax status

Annual Financial Disclosure To ACNM

Must include the following: Reporting template will be released December 1,

each year Activity at December 31, each year

Due to ACNM by March 31, of the following year.

OPEN FOR DISCUSSION