New Resources

Guidance for nonprofits on the new Form 990

On Aug. 19, the Internal Revenue Service issued instructions for the new Form 990, so there is clearer direction for nonprofits to begin to review their accounting and recordkeeping procedures and their governance practices to make next year’s filing go well.  Here are resources compiled b the National Council of Nonprofit Organizations to help you learn more about what the instructions say so you can advise your member organizations:

  • The IRS Press Release on the finalization of the 990 instructions.
  • The new Form 990 and instructions – The 2008 Form 990, released by the Internal Revenue Service in December 2007, is effective for the tax year of 2008 (i.e., for returns filed in 2009).
  • Background Paper – Summary of Form 990 Redesign Process – This is a five-page explanation of the redesign process, from the release of the Form’s discussion draft in June 2007 to the August 2008 release of the instructions. It includes reasons for the redesign, the public comment process, key changes from the old to the new form, and some next steps to prepare for the 2009 filing season.
  • Background Paper – Form 990, Moving from the Old to the New – This is a 65-page summary of the form’s parts and schedules, with highlights of new or significantly revised parts, and comparisons of material differences between the 2007 and the 2008 forms and instructions. It also provides a separate description of each part of the core form and each schedule, explaining its purpose, rationale and overview, key points, and effect on reporting.
  • Background Paper – Changes to April Draft Instructions – This is a 29-page overview of significant changes to the April draft instructions, with areas requiring further study identified. The document also includes a detailed list of material changes to the April draft instructions.
  • IRS 990 series filing phase-in chart – This chart will help you determine NOW whether your nonprofit will be filing a 990 or 990-EZ next year. Organizations eligible to file the 2008 Form 990-EZ in lieu of the 2008 Form 990 should be reviewing the revised Form 990-EZ, including Schedules A, B, C, E, G, L and N. The Form 990-EZ and accompanying background documents are available at the IRS website. The IRS expects to release conforming instructions for the 2008 Form 990-EZ by fall 2008.

Next steps – Nonprofits filing the 2008 Form 990 should begin reviewing the new form and instructions to:

  • Identify which 990 form they will be filing, the 990 or the 990-EZ
  • Identify their nonprofit’s related organizations that must be listed on Schedule R
  • Identify the organization’s officers, directors, trustees, potential key employees and top five highest compensated employees
  • Review the new governance questions, which generally must be answered based on policies and practices in place on or before the last day of the 2008 tax year
  • Identify the schedules the organization will likely be required to complete.