In their efforts to comply with the reporting requirements of the Internal Revenue Service (IRS), nonprofits often provide too much information, or they even provide the same information in more places than one. Such duplication can cause problems rather than prevent or solve them, and annoy IRS agents rather than pleasing them.
During the AICPA Not-For-Profit Industry Conference, Elaine Leichter of the Internal Revenue Service (IRS) illuminated some of the general rules relating to the IRS’s Form 990, especially Part VII, relating to listing an organization’s directors or officers or employees. Some guidelines:
A director/trustee or officer is “current” if the person served in that capacity at any time during the taxable year.
All directors/trustees and officers are listed in Part VII, Section A.
The look-back period for a “former” director/trustee, officer, key employee or highest compensations employee is five years.
List relevant persons only once. But consider whether a person listed in Section A might also be listed in Section B (independent contractors).
Include items of compensation in Part VII only once.
An item reported in “reportable compensation” should not be counted again as “other compensation.”
Don’t give extraneous information. Include requested information only: names, titles, business address, time devoted to duties, services provided, amounts paid.
Input the requested information on the form. Do not attach raw data. Provide information in Schedule O or Schedule J.
Form 990 is signed under penalties of perjury. So, do not provide supporting documents; the instructions do not request them, and the IRS does not want them.
