IS Files Comments with IRS on Proposed Redesign of Form 990

(Washington, D.C., September 17, 2007) -- Independent Sector filed detailed comments with the Internal Revenue Service on the proposed redesign of the Form 990, the primary annual reporting return for many tax-exempt organizations. In its letter to the IRS, IS stated that the draft form is a significant step toward strengthening the compliance and accountability of nonprofit organizations, but also makes several recommendations for improving the implementation and substance of the draft form.

Among its recommendations, IS strongly urges the IRS to delay implementation of the Core Form, the ten-page section that all filers must complete, until Fiscal Year 2009 to permit organizations to make necessary changes to their accounting and record-keeping systems. The letter also raises serious concerns regarding the Form’s supplemental Schedules, which must be completed only if an organization engages in the activities covered by a particular schedule or must report information in addition to that required in the Core Form. Recommendations cover Schedules pertaining to hospitals, non-cash charitable contributions, and reporting grants and activities outside the U.S.

“Independent Sector is pleased that the Internal Revenue Service is working to improve the Form 990 to facilitate accurate, complete, and consistent reporting by tax-exempt organizations,” said Diana Aviv, president and CEO of Independent Sector. “Our recommendations are essential to making the form an effective tool for the nonprofit community.”

IS recommends reorganizing the Core Form to emphasize an organization’s program activities, to clarify core financial information, and to expand the compensation section to include more information about an organization’s staff. Comments also address compliance with tax laws and recommended governance practices.

To ensure its comments accurately represented concerns raised by the nonprofit community, IS conducted seven conference calls in June and July for its member organizations to highlight problem areas and to suggest improvements. It then posted draft comments for review and response in early August, and this feedback helped shape the comments, which were filed September 14.

For more information about the proposed redesign of the Form 990 is available by clicking here.

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Independent Sector is a nonprofit, nonpartisan coalition of approximately 600 charities, foundations, and corporate philanthropy programs, collectively representing tens of thousands of charitable groups in every state across the nation. Its mission is to advance the common good by leading, strengthening, and mobilizing the nonprofit community.