2012 Form 990 Instructions Change
March 21, 2013
IRS has released the instructions to the 2012 Form 990, which independent institutions and their related organizations must file on or before the fifteenth day of the fifth month following the close of their taxable year. Public colleges and universities are not required to file the Form 990. The 2012 instructions include a number of changes from last year's form.
Changes of interest to colleges, universities, and their related organizations include:
- Audited financial statements. Only hospital organizations are required to attach a copy of their most recent audited financial statements to the form.
- Grants to foreign organizations and individuals. There are new instructions regarding when an organization should complete Schedule F, Parts II (Name) and III (Name), which deal with grants and other assistance to foreign organizations and individuals.
- Related organizations. Schedule R requests information on related organizations, and the IRS notes that both related C and related S corporations must be reported in Part IV.
- Management companies. Part VI (Governance, Management, and Disclosure), line 3 of the core form asks whether the organization delegated any management duties to a management company, and the instructions specify the information about the management company that must be provided if the organization answers "yes."
- Compensation-related information. Part VII (Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors) of the core form asks for compensation information on officers, directors, key employees, highly compensated employees, and independent contractors. In addition to the number of hours these individuals worked for the filing organization, the IRS also asks how many hours they worked for related organizations. This section also includes an example of how to report benefits provided through a self-insured medical reimbursement plan and clarification that insurance providers should not be treated as independent contractors.
- Partnership and joint venture income. For purposes of Part VIII (Statement of Revenue), Part X (Balance Sheet), and Appendix F (Disregarded Entities and Joint Ventures), organizations are no longer required to report their share of joint venture revenue or assets using Schedule K-1, and can instead report based on their books and records.
- Income allocations from S corporations. The 2012 instructions state that if the filing organization is a shareholder in an S corporation, it must treat all allocations of income from that corporation as unrelated business income.
- Payment card and third-party network transactions. Under Part VIII (Statement of Revenue) the instructions explain how to report income from payment card and third-party network transactions reported on Form 1099-K.
- Outside assistance in preparing grant applications. The glossary now defines "professional fund-raising services" as including the preparation of applications for grants or other assistance.
- Contributions received to support particular programs. Appendix J (Contributions) clarifies that if an organization accepts a contribution in the name of one of its programs, the donor acknowledgment form should include the name of the organization itself.
- Sales of bond-financed property. Schedule K includes three new lines 7-9 in Part III (Name?) regarding certain sales and dispositions of bond-financed property, whether bond issues met the private security or payment test, and whether the organization has established written remediation procedures for nonqualified bonds.
Finally, the 2012 instructions reiterate a reminder from earlier Form 990 instructions that filers should not include Social Security numbers on the Form 990 because the form is required to be publicly disclosed by both the filing organization and the IRS.
Director, Tax Policy
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