Note: The following discussion is provided for informational purposes and is not intended to serve as legal or tax advice. For specific information about completing IRS Form 990, consult your legal or tax advisor.
On December 20, 2007, the Internal Revenue Service introduced the revised 2008 Form 990, Return of Organization Exempt from Income Tax. This was the first redesign of the Form 990 in over 30 years, having no previous significant revisions since 1979. Although the new Form 990 still requires financial information as it did in the past, there are expanded reporting requirements, including information related to governance, oversight, and additional disclosures.
The revised Form 990 will require expanded recordkeeping and disclosure of information regarding the organization's governance and administrative policies. The IRS's intent is to improve the governance behaviors of organizations. With the current state of the economy in the forefront of all donors' minds, the Form 990 is an important tool that donors can use to compare organizations. With donors' ability to compare "apples to apples," nonprofits will not want to have missed out on contributions simply because their response to questions regarding governance, oversight, and accountability were less favorable than those of other organizations competing for the same funds.