Do New Charities Have to File Forms 990?

February 1, 2012 Posted by The Law Firm for Non-Profits, P.C. in IRS, News, Taxes

New organizations often ask us whether or not they have to file the Form 990. Recently the IRS made it clear that the answer is yes. The IRS explains that organizations must file the 990 even before they file the Form 1023 (or receive a determination letter) based on the belief that the organization is tax-exempt even though the IRS hasn’t recognized it yet.

And there are other notable changes to the 2011 Form 990. Governmental units and affiliates that are classified as supporting organizations, which used to be excused from filing, are now required to do so. Organizations that receive $100,000 or more in foreign funds have an additional portion of the form to complete. And several major changes have been made to the required filings for hospitals.

The IRS is also paying closer attention to the Board of Directors. Is the Board delegating broad authority to an executive or other committee? Are any governance decisions subject to approval by specific persons not on your Board? Are Board members reviewing the Form 990? The IRS wants answers.

The IRS has not yet released the 2011 versions of the Form 990-EZ or Form 990-T, but you can check in with the IRS to keep current on any changes. Consult with your organization’s tax professional if you need further advice. And remember to file an extension if you need more time!

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits,1812 W Burbank Blvd, #7445, Burbank, CA 91506

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