There are also penalties (fines and imprisonment) for willfully not filing returns and for filing fraudulent returns and statements with the IRS (see sections 7203, 7206, and 7207). States can impose additional penalties for failure to meet their separate filing requirements. If you are filing a 2022 Form 990, you are required to file electronically.

Expenses may be shown by nature or by function or both in the Statement of Activities. Expenses shown by nature present how the money was spent (salaries, rent, professional fees, etc.). Expenses shown by function present whether the money was spent towards program, administrative, or fundraising expenses. A Schedule C may also be necessary to report the political activities of a tax-exempt organization. Other documents include a Schedule D to provide more detailed financial statements, a Schedule F to report the organization’s level of activity outside the United States and a Schedule G to describe the organization’s fundraising activities. Part IV of Form 990 provides a detailed checklist of supporting documents that may be required depending on the answers given to a list of questions.

Fiduciary reporting

For example, in answering Form 990, Part I, line 6, the total number of volunteers for all of the subordinate organizations would be reported. If a tax-exempt organization charges a fee for copying and postage, it must accept payment by certified check, money order, and either personal check or credit card for requests made in writing. If a tax-exempt organization charges a fee for copying, it must accept payment by cash and money order for requests made in person. The organization can accept other forms of payment, such as credit cards and personal checks.

Report the following persons based on reportable compensation and status for the calendar year ending within the fiscal year. To determine which persons are current or former officers, directors, trustees, key employees, or highest compensated employees, see the instructions for Part VII, Section A, column (C), later. Answer “Yes” on line 16a if, at any time during its tax year, the organization invested in, contributed assets to, or otherwise participated in a joint venture or similar arrangement with one or more taxable persons. Disregard ventures or arrangements that meet both of the following conditions.

FAQs About the Exempt Organization Public Disclosure Requirements

Donors’ restrictions may require that resources be used after a specified date (time restrictions), or that resources be used for a specified purpose (purpose restrictions), or both. Donors may also stipulate that assets, such as land or works of art, be used for a specified purpose, be preserved, and not be sold or donated with stipulations that they be invested to provide a permanent source of income. All funds without donor-imposed restrictions must be reported on line 27, regardless of the existence of any board designations or appropriations. Report revenue that the organization has received but not yet earned as of the balance sheet date under its method of accounting. The amounts on line 16 must equal the amounts on line 33 for both the beginning and end of the year. If an amount is reported on this line that is 5% or more of the amount reported on Part X, line 16, answer “Yes” on Part IV, line 11d, and complete Schedule D (Form 990), Part IX.

Organizations use Schedule A, Part II to calculate their public support percentage to demonstrate that they qualify for public charity status under Section 170(b)(1)(A)(VI). Schedule A, Part II also can be used to demonstrate an organization’s eligibility to use a special rule that effectively reduces the number of contributors that must be reported in Schedule B. The 990-PF is filed by all 501(c)(3) private foundations and 4947(a)(1) nonexempt charitable trusts. See the Form 990 filing thresholds page to determine which forms an organization must file. A quid pro quo contribution is a payment that is made both as a contribution and as a payment for goods or services provided by the donee organization. An organization must provide a written disclosure statement to donors who make a quid pro quo contribution in excess of $75 (section 6115).

Why Is a 990 Form Important?

Organizations that report more than $15,000 total on lines 1c and 8a must also answer “Yes” on Part IV, line 18, and complete Part II of Schedule G (Form 990). An “institutional trustee” is a trustee that isn’t an individual or natural person but an organization. Organizations must report compensation from themselves and from related organizations, which generally consist of parents, subsidiaries, brother/sister organizations, supporting organizations, supported organizations, sponsoring organizations of VEBAs, and contributing employers to VEBAs. See the Instructions for Schedule R (Form 990) for a fuller discussion of related organizations.

An officer that served at any time during the organization’s tax year is deemed a current officer. The officers of an organization are determined by reference to its organizing document, bylaws, or resolutions of its governing body, or as otherwise designated consistent with state law, but, at a minimum, include those officers required by applicable state law. Officers can include a president, vice president, secretary, treasurer, and, in some cases, a Board Chair.

File

A diversion of assets can in some cases be inurement of the organization’s net earnings. In the case of section 501(c)(3), 501(c)(4), and 501(c)(29) organizations, it can also be an excess benefit transaction taxable under section 4958 and reportable on Schedule L (Form 990). If the combined amount of an organization’s gross investment income, and other gross income from unrelated trades or businesses, is $1,000 or more for the tax year, the organization must report the investment income, and other unrelated business income, on Form 990-T.

• A document retention and destruction policy identifies the record retention responsibilities of staff, volunteers, board members, and outsiders for maintaining and documenting the storage and destruction of the organization’s documents and records.
• Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations must report the total compensation and other distributions provided to disqualified persons and persons described in section 4958(c)(3)(B) to the extent not included on line 5.
• Amounts excluded under the two separate $10,000 exceptions (the $10,000-per-related-organization and $10,000-per-item exceptions) are to be excluded from compensation in determining whether an individual’s total reportable compensation and other compensation exceeds the thresholds set forth on Form 990, Part VII, Section A, line 4.
• Report compensation on Form 990, Part VII, for the calendar year ending within the organization’s fiscal year, including that of current officers, directors, and trustees, even if the fiscal year is used to determine which such persons must be listed in Part VII.
• In general, answers can be explained or supplemented in Schedule O (Form 990) if the allotted space on the form or other schedule is insufficient, or if a “Yes” or “No” answer is required but the organization wishes to explain its answer.

If the organization is aware that the amount actually reported on the other form is incorrect, it must report on https://quickbooks-payroll.org/accounting-for-a-non-profit-organization/ the information that should have been reported on the other form (in addition to filing an amended form with the proper amount). Under section 6652(c)(1)(A), a penalty of $20 a day, not to exceed the lesser of $11,000 or 5% of the gross receipts of the organization for the year, can be charged when a return is filed late, unless the organization shows that the late filing was due to reasonable cause. Organizations with annual gross receipts exceeding $1,129,000 are subject to a penalty of $110 for each day failure continues (with a maximum penalty for any one return of $56,000). The penalty applies on each day after the due date that the return isn’t filed. An organization should keep a reconciliation of any differences between its books of account and the Form 990 that is filed. Organizations with audited financial statements are required to provide such reconciliations on Schedule D (Form 990), Parts XI through XII.

Which Nonprofits Have to File a 990

If the organization doesn’t maintain a website, enter “N/A” (not applicable). If the organization is exempt under section 501(c) (other than section 501(c)(3)), check the second box and insert the appropriate subsection number within the parentheses (for example, “4” for a section 501(c)(4) organization). Check this box if the organization changed its address and hasn’t reported the change on its most recently filed Form 990, 990-EZ, 990-N, or 8822-B, Change of Address or Responsible Party—Business, or in correspondence to the IRS. File the 2022 return for calendar year 2022 and fiscal years that began in 2022 and ended in 2023.

The organization must also answer “Yes” on Part IV, line 11e, and complete Schedule D (Form 990), Part X. Use column (C) to report expenses that relate to the organization’s overall operations and management, rather than to fundraising activities Specialized Tax Services STS accounting method: PwC or program services. Overall management usually includes the salaries and expenses of the organization’s CEO and his or her staff, unless a part of their time is spent directly supervising program services or fundraising activities.