NAVREF - Professional Development

professional development

UNDERSTANDING IRS FORM 990

NPC staff should work diligently with their auditor and accountant to ensure that the NPC's IRS Form 990 and schedules are completed in accordance with IRS guidance. For proper fiduciary oversight, the board should review and discuss the draft 990 with the preparer to ensure awareness and understanding of the information provided in the form.

Hint: Preparation of the 990 is greatly simplified if the NPC's chart of accounts is designed to accrue the information needed to ensure accurate reporting on IRS Form 990, financial statements and the annual report to VA.

The re-designed IRS Form 990 is being phased in for use for 2008 tax years. That is, organizations that use the calendar year as their fiscal year must file the new form for calendar year 2008, and for fiscal years that began in 2008 and end in 2009, unless gross receipts fall below $1 million. NPCs with low revenues should consult with their accountants to determine whether they must complete the new form or may exercise the IRS option to file a 990 EZ.

Guidance on the New IRS Form 990:

August 2009 - Grant Thornton has provided NAVREF with permission to post its very useful table listing the 990 policies, procedures, practices, and topics of interest to the IRS. The table also identifies the applicable 990 form and line item, and guidance on whether the IRS requires a description of the policy, procedure or practice. This chart is an invaluable tool for assessing whether your NPC is ready for the new 990. Click here for the Grant Thornton Table

June 2008 - See http://www.navref.org/newsletter/2008/update_061208.htm#3._____Are_You_Ready_for_the_New_IRS_Form_990. Use the list of policies in the ClarkNuber article to identify any that your NPC may be missing and start working on them now so they may be board-approved before the end of the applicable calendar or fiscal year and in time for your NPC to respond “yes” to the policy questions on the new 990. Three key sample policies are on the NAVREF web site.

See:

Conflict of interest: http://www.navref.org/bestpractices/gov_conflict_policies.htm
Whistleblower: http://navref.org/library/SMC_Implications_of_SOX.htm
Document retention and destruction: http://navref.org/library/SMC_Implications_of_SOX.htm

There is also discussion of executive compensation review: http://www.navref.org/bestpractices/hr_phiringterm_hiring_contract.htm

Sample policies posted at http://navref.org/newsletter/word/JJacobs-Sample_Policies_for_New_990.doc have been widely disseminated. These must be tailored for NPC purposes but may save NPCs in need of policies some time.

IRS Guidance: The IRS has comprehensive guidance about the new 990 posted at http://www.irs.gov/charities/article/0,,id=181089,00.html

The mini-courses linked at the end of the page are particularly useful. See http://www.irs.gov/charities/article/0,,id=166625,00.html

Additionally, the IRS has developed a training program on the new 990. Go to http://www.taxtalktoday.tv/index.cfm?page=2.501, register and use the archives to access the November 4 program called “Preparing for the New Form 990.”

NAVREF encourages all NPCs to consult their accountants for advice on the new 990.

February 6, 2006 - NAVREF Guidance on completing IRS FORM 990. Please note: This guidance applies to the old 990 which most NPCs are still using in 2009. It will be updated during 2009.
Click here for a table of line by line discussion of key IRS Form 990 line items. NAVREF and CPA Jane Searing collaborated on this document to provide NAVREF members with information tailored to address their particular needs. Please note: This guidance applies to the old 990 which most NPCs are still using. It will be updated during 2009. It will be updated during 2009.
Listen to the November 9, 2004 Conference Call with presenter Jane Searing, CPA, on Understanding the IRS Form 990. Click here for link to recording. Note: The recording starts 10 minutes into the workshop. No substantive information is missing.
PowerPoint Presentation 11/9/04
Helpful Links

Disclaimer: Information presented during the teleconference and/or linked does not constitute legal or accounting advice. Please consult an accountant familiar with your organization and state regulations for advice.

Helpful Links

Internal Revenue Service (IRS)

IRS website: http://www.irs.gov/

IRS Form 990 and Form 990-EZ Instructions: http://www.irs.gov/pub/irs-pdf/i990-ez.pdf

IRS Form 990: http://www.irs.gov/pub/irs-pdf/f990.pdf

IRS Form 990, Schedule A Instructions: http://www.irs.gov/pub/irs-pdf/i990sa.pdf

IRS Form 990, Schedule A Form: http://www.irs.gov/pub/irs-pdf/f990sa.pdf

IRS Form 990, Schedule B Form: http://www.irs.gov/pub/irs-pdf/f990ezb.pdf

SOP 98-2

AICPA: http://www.aicpa.org/pubs/jofa/aug98/capin.htm

Langan and Associates Compliance Checklist http://www.langancpa.com/client/chklist.html

Financial Accounting Standards Board

FASB 136: http://www.fasb.org/st/summary/stsum136.shtml

GuideStar

Tutorial on 990s: http://www.guidestar.org/learn/tutorial/990_0intro.jsp

Special Thanks! NAVREF thanks Jane Searing for developing content designed to meet the unique needs of the NPCs. We also thank Eileen Lennon, Ph.D., Executive Director, and Jude Harlan, Controller, Seattle Institute for Biomedical and Clinical Research, for providing invaluable input.