Form 990 is a reporting document filed by tax-exempt organizations in the United States with the Internal Revenue Service (IRS). It provides detailed information about the organization’s financial activities, governance, programs, and compliance with tax regulations. Form 990 serves as a tool for transparency and accountability, allowing the public, donors, and regulators to assess how tax-exempt organizations operate and fulfill their missions. Here’s an overview of Form 990:
1. Purpose and Importance:
- Form 990 is required by the IRS for tax-exempt organizations, including nonprofits, charities, foundations, and other types of tax-exempt entities.
- It provides transparency by disclosing information about the organization’s finances, operations, governance, and activities to the IRS, stakeholders, and the general public.
2. Reporting Requirements:
- Organizations with gross receipts exceeding $50,000 must file Form 990 annually.
- The specific version of Form 990 filed depends on the organization’s size and activities. The main versions include Form 990, Form 990-EZ, and Form 990-N (e-Postcard).
3. Content and Sections: Form 990 is comprehensive and includes various sections that require information about:
- The organization’s mission, activities, and accomplishments.
- Financial data, including revenues, expenses, assets, liabilities, and net assets.
- Governance, including details about board members, key personnel, and compensation.
- Fundraising activities and related expenses.
- Grants, contributions, and allocations of funds.
- Compliance with tax regulations, conflicts of interest policies, and other governance practices.
4. Public Disclosure:
- Form 990 is a public document, and it is accessible to the public. This allows donors, stakeholders, and the general public to review how organizations use their resources and fulfill their missions.
- Many nonprofit organizations also provide copies of their Form 990 on their websites or upon request to promote transparency.
5. Impact on Organizations:
- Accurate and complete reporting on Form 990 is essential to maintain the organization’s tax-exempt status and comply with IRS regulations.
- Misrepresentations or inadequate disclosures on Form 990 can lead to penalties or loss of tax-exempt status.
6. Filing Deadlines:
- The filing deadline for Form 990 depends on the organization’s fiscal year. Generally, it is due by the 15th day of the 5th month following the end of the fiscal year.
7. Variations for Different Organizations:
- Some types of tax-exempt organizations, such as churches and certain religious organizations, are not required to file Form 990.
- Private foundations have additional reporting requirements on Form 990-PF.
Form 990 provides a valuable snapshot of a tax-exempt organization’s financial health, governance practices, and overall operations. It serves as a tool for accountability and transparency, allowing the public and regulators to assess the organization’s effectiveness in fulfilling its mission and managing its resources.