Okay, it’s a bit too late for beach reading, but CPAs everywhere are likely devouring its every nuance. The revised, redesigned, and reconsidered IRS 990 form and instructions — a required annual filing for any nonprofit with gross receipts of $1 million or more, or total assets of $2.5 million or more at the end of the tax year (nonprofits with lesser budgets fill out the 990EZ or the cute little 990-N) — has finally been unleashed upon the world.
It may seem like the pinnacle of tedium, but such redesigns of the reporting requirements have a rather dramatic impact on how the nonprofit world works (the last major revision of the 990 was in 1979, the year Skylab fell to earth… Coincidence? I think not.). These rules define the lens through which we see and understand a large part of the nonprofit infrastructure — how donors evaluate potential recipients, how foundations map their strategy, how nonprofits describe and track their financial life.
If you’re interested in the specifics of the redesign, Charity Governance has a thoughtful overview. Or, just print out the new form and instructions and curl up in your jammies tonight for a good read.
A confusing bit from the IRS’s revised 990 instruction pdf…
First this, regarding the $0 compensation threshold for the reporting of “officer” salaries and payments…
* current officers, directors, and trustees (no minimum compensation threshold)
Then this bit that seems to define the senior day-to-day staff person, executive director, or general manager as an officer (no matter how the organization’s by-laws treat him/her)…
For purposes of Form 990 reporting, including Part VII, Section A and Schedule J, treat as an officer the following persons, regardless of their titles:
1. Top management official. The person who has ultimate responsibility for implementing the decisions of the governing body or for supervising the management, administration, or operation of the organization.
That would mean that the compensation of a chief executive earning well under the $150,000 “key employee” threshold, must still be reported under the officers, directors, and trustees disclosure (even if that salary were $1/year).
Do y’all agree with my reading of it?
I just sent in the 501-c-3 application to the IRS. I have to laugh, my tiny agency hasn’t cracked the $5,000 per year limit yet and I’m reading about $1 & 2.5 million dollar agencies-I’ll download the form and read it all the way through, I’m sure my sides will hurt by the end of it!
I guess a girl can dream big!
Yes, you’re correct in assuming that a chief executive should be listed in both Part VII-A and schedule J regardless of compensation. The person’s title has less to do with the requirement than the person’s level of responsibility. The organization’s top financial official must also be listed, whether this is a board member or a staff member.