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The Internal Revenue Service has unveiled draft instructions for its updated Form 990 that will be used by nonprofit organizations beginning in tax year 2008. The differences between the existing and new form are significant and include changes in format, organization, and additional disclosure.
MMT Program Officer Paul Reich weighs in and wants to know what you think:
You will rarely find me advocating for increased government regulation and for some questions, the new form causes me to ask, "Why do you need this information?"
Nonetheless, I think the new 990 is a good idea, particularly regarding governance and increased transparency regarding financial transactions that nonprofits should avoid. In particular, its sections on "Statement of Program Accomplishments," "Governance, Management and Disclosure," and "Compensation Information" are noteworthy. Having been in a leadership position in a number of capacities, I can even see this form being used as a tool by nonprofit executives to improve an organization.
What do you think? Please add your comments below...
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In addition, the IRS is accepting comments through June 1, 2008.
Government grants non-profits the privilege of different -- better -- tax status. Government may therefore require different -- more thorough -- explanations of why that status is deserved. The new form is, as Mr Reich suggests, useful. It is also fair.
On a side note, this writer believes that more government regulation of for-profit industry, as well as sharper enforcement teeth in the form of massive fines for corporate miscreants, is something to be advocated for!
I think folks should know that Paul has years of experience as a nonprofit CFO and ED who's had to file his organizations' Form 990s. Since much has been made of the complexity and difficulty of the new forms, I was relieved to hear his appraisal that the changes are potentially beneficial and not too onerous! I'm anxious to hear what others think.
Government grants non-profits the privilege of different -- better --tax status. Government may therefore demand different -- more thorough -- explanations as to why that status is deserved. The new form is both useful, as Mr. Reich suggests, and fair.
On a side note, increased government regulation of for-profit business, with increased enforcement teeth and massive fines for corporate miscreants, seem to me a very good idea!