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IRS Releases Draft Form 990

October 20, 2005

The Internal Revenue Service released a new draft version of its Form 990 (Return of Organization Exempt from Income Tax). The changes primarily affect the areas listing current and former officers, directors, trustees, and highly compensated employees of tax-exempt organizations, and whether those individuals have a conflict of interest due to their position with a related organization.

The new changes include the following:

• Officers, directors, trustees, and “key employees” must now be listed separately by status as either current or former.
• New information is now required for current officers, directors, trustees, and key employees:
• • the total number of individuals permitted to vote on organization business at board meetings;
  • whether current officers, directors, trustees, highest compensated employees, or independent contractors listed in Schedule A are related to one another through business or family relationships;
  • whether those individuals listed in Schedule A receive compensation from any other organizations, tax exempt or taxable, that are related to the organization through common supervision or common control; and
  • whether the organization has a conflict-of-interest policy in place.
• Two new questions ask whether the organization has a financial account in another country and whether the organization maintains an office outside of the United States.

Comments on the new draft Form 990 are due to the IRS no later than November 7.