New Form 990 Presents Many Challenges, But Redesign Was Worth It, Practitioners Say

Posted on 08.15.10

*Due to constantly changing regulations, please consult your tax and accounting professional for the most up to date information on this and any topic that you research online.

The redesign of Form 990 was a necessary and positive change despite the many challenges it presents to organizations and practitioners, participants in an Aug. 11 BNA Tax & Accounting webinar said.

The form, which lists revenues, expenses, and program services of charities and other tax-exempts, went through a massive redesign in 2007—the first in nearly 30 years. Most of the largest tax-exempt organizations have filed the 2008 redesigned form and if applicable, going forward, starting with the 2009 forms, they must add in two new mandatory schedules—Schedule H for hospitals and Schedule K for organizations with certain tax-exempt bond liabilities.

After 30 years, it was “definitely” time to redesign the Form 990, said Travis Patton, a partner at PricewaterhouseCoopers. “If you looked at the old form it had become very choppy. Sections were out of order; there was revenue that was reported in two different places and it didn’t give the focus on some of the critical activities that organizations are currently doing and allow them to describe those in a nice manner,” Patton said. “I do think that the redesign is extensive. It obviously requires organizations to report a great amount of more detail than they did before. But I think it was necessary.”

Meredith Monroe, a senior associate in PricewaterhouseCoopers’ Exempt Organization Tax Services practice, agreed the redesign was needed and said that many of the challenges experienced by taxpayers and practitioners with the 2008 forms will not be as daunting with the 2009 forms and beyond because they will be more accustomed to the larger amount of detail and record-keeping required for the form. “Once organizations start to get a little bit more organized and their policies are in line, I think it will be really beneficial to the public and to the organization as a whole to get more organized,” Monroe said.  Source: BNA Tax Daily.

The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.