On December 20, the IRS released the 2008 Form 990, Return of Organization Exempt from Income Tax. The Form is available at on the IRS website. Organizations will begin using new Form 990 for the 2008 tax year (returns filed in 2009), but must continue to use the current Form 990 for the 2007 tax year (returns filed in 2008). The Form is based on the Discussion Draft that was released to the public for comment on June 14, 2007 but incorporates many recommendations made in the public comments.
The Form consists of an 11-page core form. In addition, the Form’s 16 schedules are designed to require reporting of information only from those organizations that conduct particular activities. The IRS added one page and a new schedule (Schedule O) to the Discussion Draft in response to requests for more opportunity to provide explanations and narrative responses to the Form’s questions.
Among the major changes the Form made to the Discussion Draft are the following: (1) a revised summary page; (2) a reordered core form that moves the organization’s description of its program service accomplishments to page 2, immediately after the summary; (3) a new checklist of schedules that shows which schedules the filing organization must complete; (4) more opportunity throughout to provide supplemental information; (5) revised governance and compensation sections; and (6) modified schedules for hospitals, tax-exempt bonds, non-cash contributions and supplemental financial statements. Finally, to address transition concerns expressed by the sector, the IRS will phase in the new Form over a 3-year period. The IRS expects to release draft instructions for the 2008 Form 990 in early 2008.