Form 990 CPAs know how strongly the AICPA (American Institute of CPAs) advocates for common sense and tax transparency. In 2012 they’ve recommended changes to the Form 990 preparation process for 2013. The goal of Form 990 is to:
- Prove the non-profit organization has a charitable function.
- Has IRS approval as a non-profit organization.
- Spends its funds to support that function.
- Provide a publicly available tax return contributors can examine.
Form 990 is a dozen pages long with an alphabet of sub-schedules. While it’s easy to point Form 990 out as an example of overly complex tax preparation, it does apply to vast array of different types of non-profit organizations.
“While you don’t have to be a non-profit CPA to understand Form 990, I have to say the average contributor might have difficulty following it.”
- Gary Bode, Form 990 CPA
Here are some of the common sense changes the AICPA proposed to the IRS:
- Changes in the Form 990 instructions, specifically to highlight changes in 2013 from 2012.
- Making it easier for a non-profit organization to change its name.
- Defining what audited Financial Statements mean for hospitals.
- Clarifying compensation for short year returns.
- Easing Board approval on policy changes.
- Making pension expense more transparent.
- Making accrued compensation reporting more like business tax returns such as Form 1120-S and Form 1065.
- Closing a loophole that allows short year compensation to go un-reported.
- Making a recent temporary sub schedule permanent to better reflect non-profit organizations that have Partnership ties.
- Changing the definition of support to mean financial support instead of both financial support and service support.
- Making the non profit’s lobbying efforts more transparent.
- Clarify Net Unrealized Gains and Losses on Investments.
- Making foreign activity more transparent.
- Making repetitive answers more concise through aggregate check boxes.
- Making housing benefits to employees more transparent.
- Making Form 990 instructions consistent with Form 990 itself.
I’m a Form 990 CPA with a virtual office to serve non-profit organizations wherever they are. (910) 399-2705.
