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IRS Releases New Draft Form 990 With More Focus on Fundraising

(June 18, 2007) The Internal Revenue Service (IRS) has introduced a draft of a new Form 990 that would focus more on several areas, including fundraising and noncash charitable contributions.

The IRS has given charities until Sept 14 to submit comments about the new form, which would be used for the 2008 taxable year with charities filing the form in 2009.

According to the IRS, the redesign of Form 990, the first since 1979, is based on three guiding principles:

  • Enhancing transparency to provide the IRS and the public with a realistic picture of the organization, along with the basis for comparison to other organizations
  • Promoting compliance by accurately reflecting the organization’s operations so the IRS may efficiently assess the risk of noncompliance
  • Minimizing the burden on filing organizations

The redesigned Form 990 consists of a 10-page core form to be completed by each Form 990 filer. In addition, the new form has 15 schedules that are designed to require reporting of information only from those organizations that conduct particular activities.

More Information on Fundraising, Gifts

Schedule G of the new form would relate to fundraising and gaming. Most of the information requested on the new form is already gathered on the current form. However, the section does expand the charity’s reporting about the use of third-party fundraisers. All organizations with more than $10,000 from fundraising events or outside fundraising costs would have to complete Schedule G.

Schedule M is new and relates to noncash contributions. It would require reporting by types of contribution and information regarding a donee’s valuation methods for financial reporting Organizations that received more than $5,000 in noncash contributions would have to complete Schedule M.

There are also new schedules for overseas activities, hospitals and tax-exempt bonds.

Other new parts of the form include a summary page providing the organization’s identifying information and a snapshot of the organization’s key financial, compensation, governance and operational information. In addition, a portion of the form requires governance information, including the composition of the board and certain other governance and financial statement practices.

Comments

The draft of the new form, along with background information, summaries and highlights, can be found on the IRS website.

The deadline for submitting comments to the IRS regarding the new form is Sept. 14, 2007. Questions and comments should be e-mailed to the IRS at Form990Revision@irs.gov or mailed to: 

IRS
Form 990 Redesign, SE:T:EO
1111 Constitution Avenue, NW
Washington, DC 20224

AFP will be submitting comments to the IRS and will be seeking input from interested members and other fundraising organizations.

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