IRS Forms 990: Accountability, Transparency, & Marketing

1. IRS Forms 990: Accountability, Transparency, & Marketing Gail T. Merridew, MPA, NMC Nonprofit Management Solutions, LLC gail@npmgmtsolutions.com 866.403.5505 804.795.9009 804.874.5334 Toll Free Richmond Mobile

2. Purpose of Form • Used by tax-exempt organizations, Section 527 political organizations, and nonexempt charitable trusts to provide information to the IRS (as required by Section 6033) • Available for public inspection (Section 6104) • Primary or sole source of information about specified organizations’ programs and accomplishments From IRS Instructions for Form 990 and Form 990-EZ

3. Three Guiding Principles • Enhancing transparency to provide the IRS and the public a realistic picture of the organization and a reasonable basis for comparison to other organizations. • Promoting compliance and accountability by accurately reflecting the organization’s operations so the IRS may efficiently assess the risk of noncompliance. • Minimizing the burden for filing multiple documents with multiple entities.

4. Filing Requirements All tax exempt organizations will need to make an annual filing. Generally: • 990-N for small organizations below $50,000 (by 2010) • 990-EZ for small organizations between $50,000 and $200,000 (by 2010) • 990 for organizations with more than $200,000 (by 2010)

5. Filing Requirements • Failure to file for 3 consecutive years will result in the automatic revocation of your tax exempt status. • Tax penalties exist for failure to make timely filings. (A penalty of $20/day, not to exceed $10,000 or 5% of total revenue, may be charged. For organizations with $1 Million or more in total revenue, a penalty of $100/day, not to exceed $50,000, may be charged.)

6. Accounting Periods • Calendar Year – January 1 – December 31 • Fiscal Year – 365/366 day period beginning with the first day of one month and ending with the last day of the previous month (should coincide with the organization’s natural operating cycle, if applicable). • Short period – an accounting period less than 12 months (may be used to move from one reporting period to another).

7. When to File • The 15th day of the 5th month after the end of the organization’s accounting period: • For calendar year preparers - May 15th • For fiscal years ending June 30th - November 15th • Automatic extensions of 3 months may be requested with Form 8868; however, you must show reasonable cause for the additional time requested.

8. Who is looking at your Form 990? • IRS • Media • Job seekers • Other nonprofits • State regulators • Watch dog groups • Potential board members • Potential donors / funders*** *** Large foundations often have staff devoted to 990 analysis

9. GuideStar (www.guidestar.org) • Using GuideStar - Basic or Premium • How to Find What You’re Looking for in GuideStar • Frequently Asked Questions • Search Results: • General Information ■ Analyst Report • Board of Directors ■ Financial Data • Mission and Programs (Premium Members or $$$) • Goals and Results • Form 990 and EDOCs

10. Program Information Detailed program information: • Mission • Description • Clientele served • Expenses • Goals • Accomplishments

11. Documents Funders often request the following: • IRS tax determination letter • IRS Form(s) 990 • Annual Report(s) • Audited Financial Statement(s) • IRS Form 1023 • Other independent financial review or compilation (infrequent)

12. About the Presenter: A nonprofit management consultant since 2003, Gail Merridew has developed various educational, consulting, and networking initiatives related to nonprofit capacity building. Gail assists clients with strategic planning, board development, capacity building, outcomes evaluation, and data analysis (potentially incorporating systems development). Working predominantly with early-stage or “growth-challenged” agencies, Gail uses a combination of education, facilitation, and hands-on strategies for: Guiding nonprofit organizations to the next level!