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Business and Policy Areas
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NACUBO Engages IRS on Form 990 Changes

July 20, 2007

A NACUBO delegation met on July 10 with IRS staff working on the Form 990 redesign. The delegation stressed key concerns that the new form raises for colleges and universities and discussed possible improvements and revisions to the draft. NACUBO convened a small delegation after participating in three conference calls and gathering input from more than a dozen institutions. Participants met with IRS officials to talk about the new form, which the Service hopes to have up and running for the 2008 tax year -- fiscal year ending June 30, 2009. 

Theresa Pattara, a project manager in the IRS's exempt organizations division, and Ron Schultz, senior technical advisor to the commissioner of Tax Exempt and Governmental Entities, explained that the Service is reaching out to identify issues early in the 90-day comment period, beginning to address the recommendations it receives internally, and getting started on workable alternatives prior to the Sept. 14 comment deadline.

Dave Carson, vice president for business and finance at Washington & Jefferson College; Barbara Morris, director of tax and payroll at Johns Hopkins University; Jennifer Lopez, tax manager at George Washington University; and Mary Bachinger, director of tax policy at NACUBO, participated in the July 10 meeting at NACUBO's offices. 

The delegation voiced significant concern over the sheer enormity of the redesigned form. Pointing out that most colleges will need to complete at least 13 of the 15 schedules, NACUBO suggested that the magnitude of the new reporting requirements seem to unduly burden the higher education community. Already, many institutions have estimated that they will need to add at least one full-time employee to coordinate the new reporting procedures. In addition, information systems will need to be crafted to capture data required on the new form.

Other key issues raised during the meeting included:

  • The explanation of how the elimination of group reporting (ie., consolidated return for an institution's subordinate organizations) would disparately impact higher education institutions, some of which have more than 100 groups that would then need to file individual 990s
  • General problems with reporting financial information in non-GAAP (Generally Accepted Accounting Principles) categories and sub-categories, and recommendation to somehow incorporate the submission of the filing institution’s audited financial statement
  • Recommendations for paring down the amount of detail required on programs in foreign countries (Schedule F) and on tax-exempt bonds (Schedule K)
  • Transitional relief or postponement of new requirements to provide necessary lead time to prepare for such a large amount of additional reporting

Another meeting of the NACUBO team is planned for early August. If you or your staff are responsible for completing the Form 990, either on behalf of your institution or perhaps for the foundation of a public institution, we strongly urge your close review of the IRS discussion draft. If you have any questions about the draft form, or if you decide to submit comments to the IRS, contact Mary Bachinger, director of tax policy, at mary.bachinger@nacubo.org.