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Business and Policy Areas
Business and Policy Areas
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IRS Announces Changes to 2013 Forms 990 and 990-EZ

February 7, 2014

The Form 990, Return of Organization Exempt from Income Tax, was substantially redesigned beginning with the 2008 filing year, and the IRS revises the form annually to modify and clarify certain reporting requirements. The IRS recently released a list of the significant changes made to both the 2013 Form 990 and the Form 990-EZ—the short form that can be filed by organizations with gross receipts of less than $200,000 and total assets of less than $500,000 at the end of their tax year.

Most of the Form 990 changes relate to the instructions and the accompanying schedules, rather than the actual form. They include:

Part IV, Checklist of Required Schedules: Explains when an organization needs to respond "Yes" to report that it became aware of an excess benefit transaction with a disqualified person in the prior year.

Part VI, Governance, Management, and Disclosure: Clarifies what compensation paid by a management company to interested persons needs to be reported on Schedule O.

Part VII, Compensation of Officers, Directors, etc., Section A: Requires reporting of a director's compensation for non-director independent services provided to the organization and related entities. It also clarifies that compensation paid by a management company to an officer, director, trustee, key employee, or highly compensated employee does not generally have to be reported.

Part IX, Statement of Functional Expenses: Explains how to report expense payments and reimbursements to contractors.

Glossary: Clarifies that the term "contributions" does not include either donations of services or discounts on the sale of goods.

Appendix F, Disregarded Entities and Joint Ventures: Explains when to treat a single-member LLC as a disregarded entity of its sole member/owner.

Schedule D, Supplemental Financial Statements, Part VIII: Now requires a description of each program-related investment on a separate line of the table.

Schedule F, Statement of Activities Outside the United States: Clarifies that a filer does not have to report on investments in entities domiciled overseas but traded on a U.S. stock exchange.

Schedule I, Grants and Other Assistance to Organizations, Governments, and Individuals in the United States: Includes new instructions that define domestic organizations, domestic governments, and domestic individuals.

Schedule J, Compensation Information: Clarifies that a reportable severance payment includes a payment made pursuant to a separation agreement entered into by the parties. It also explains what information must be reported with respect to unrelated organizations that provide compensation to officers, directors, etc.

Schedule L, Transactions with Interested Persons: Explains when a foreign organization may be treated as an IRC §501(c)(3) charity for purposes of the Part IV reporting exceptions.

Full text of 2013 Form 990 and 990-EZ changes.

Contact

Mary Bachinger
Director, Tax Policy
202.861.2581
E-mail