New 990 IRS Form
Earlier this summer, the Internal Revenue Service (IRS) released a revised draft of tax Form 990, the annual return that charities with annual budgets of $25,000 or more file with the government. This new Form is expected to be filed by organizations in 2009 with tax information for tax year 2008.
This is the first revision since 1979 of the document that was created in 1941. The 990 Form will now include a section that asks charities about management and governance policies in an attempt to encourage accountability.
NOTE: It is anticipated that organizations that do not have policies in place that can serve as answers to the questions will not be penalized. Nevertheless, those entities stand a greater chance of being audited.
Also new to the form:
- Organizations must list their major accomplishment for the year
- Schedule D for Supplemental Financial Statements – this will be used for organizations that maintain donor advised funds and also for organizations that maintain collections of art and/or historical treasures
- New Schedules for organizations that receive non-cash contributions and for those that conduct activities outside of the United States
In addition to the Form itself, the IRS would like to have feedback on whether or not the filing threshold be raised from organizations with annual budgets of $25,000 to organizations with annual budgets of $50,000.
The revised 990 Form can be found at http://www.irs.gov/charities/index.html and your comments can be submitted via email Form990Revision@irs.gov or via regular mail at Form 990 Redesign, ATTN: SE:T:EO, 1111 Constitution Avenue, N.W., Washington, D.C. 20224.
The IRS encourages your comments anytime prior to their September 14th deadline. The earlier comments are submitted the more chance they have of being synthesized into the final version of the Form.
Senators Max Baucus (D-MT) and Charles Grassley (R-IA) – the charitable reform duo, who in 2003-2004 brought you valuation limits on vehicle, cultural, and intellectual property donations, play a part in the new IRS Form changes.
According to the 6/14 edition of the Chronicle of Philanthropy, Senators Baucus and Grassley sent a letter to the Treasury Department in May urging the IRS to "add tough new questions to the form to make it more effective in identifying and preventing charity abuses, especially those involving overly generous pay and perquisites for charity officials." To read more about the issue, check out the websites of these organizations:
Independent Sector
Alliance for Justice
American Association of Museums
New IRS Rules For 403 (b) Plans
If you offer your employees a tax-sheltered annuity (TSA) retirement program, your obligations for oversight have been changed. On July 23, 2007, the Internal Revenue Service (IRS) issued final regulations on TSA programs as a means to make the rules for governing 403 (b) retirement plans similar to those for governing 401 (k) plans and 457 (b) plans.
These new rules will significantly impact tax-exempt organizations and their employees by increasing the employers’ fiduciary responsibilities as well as the responsibility to educate employees about their investment options.
According to a white paper written by Ginny Boggs, senior compliance consultant for Milliman, an actuarial and consulting firm, employers that offer 403 (b) plans now need to have:
- A written plan document outlining the guidelines for selecting, monitoring, and evaluating investment options
- Written description of all available investment options
- Stricter transfer rules
- An investment committee to review investment performance, plan expenses, and employee education
- A bright-line test for offering retirement plans to employees with irregular work schedules
- Annual meaningful notice to employees of their rights to participate in the offered retirement plans
The new regulations will take effect January 1, 2009. Be sure to consult your attorney or retirement plan manager to learn how the new rules specifically apply to your organization.
To learn more about this issue, please visit:
Internal Revenue Service
Milliman
Blank Rome LLP
Prudential
The Cultural Alliance looks to host a forum to help you learn more about this issue.
Barnes Suit
The Friends of the Barnes Foundation filed a lawsuit on 8/21/2007 to keep the museum in Merion.
Philadelphia Inquirer | 8/28/2007 | Neighbors sue to keep Barnes from moving
Philadelphia Daily News | 8/28/2007 | Reconsider Barnes move, judge is asked
Barnes Timeline
2007
- Montgomery County Commissioners remains committed to filing lawsuit
- Friends of the Barnes file lawsuit
- Montgomery County Commissioners fire lawyer hired to file lawsuit
- Montgomery County Commissioners offer to keep Barnes by buying the property and then leasing it back to the Foundation
- Barnes announced the six architecture firms considered for the Parkway project
- Mayor Street and the Fairmount Park Commission introduced City Council legislation to make zoning changes and approve Barnes lease
2006
- United States Representative Jim Gerlach (R-PA) introduced legislation to revent the Barnes move by placing a tax on nonprofits whose relocation plans go against the intent of the donor
- Barnes Foundation announces new President Derek Gillman
- Philadelphia City Councilwoman Jannie Blackwell blocked Barnes move to the parkway
2005
- Barnes President Kimberly Camp resigned
2004
- Montgomery County Orphans' Court Judge Stanley Ott permits Barnes board expansion and move plans
2002
- Barnes petitioned Montgomery County Orphans' Court to expand board and to move to the Benjamin Franklin Parkway
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