It’s tax prep time and that includes non-profit organizations required to file IRS Form 990. The Service revised this year’s Form 990 as well as its instructions and schedules to provide for further taxpayer disclosure with respect to joint ventures, investment partnerships, compensation, and hospitals.
Officer Compensation: Organizations reporting compensation to officers, directors, individual trustees and key employees must use Schedule J of Form 990. That has not changed. However, reporting organizations must not provide a descriptive narrative of payments to related organizations (subsidiaries, brother/sister organizations, management companies, etc.). This is done to calculate compensation to the related officer, director, key employee, etc. There are a few other narrative description requirements for other types of payments and compensation as well.
Joint Ventures and Investment Partnerships: The revised Form 990 requires organizations to report Schedule K-1 revenues, expenses and assets related to joint ventures and investment partnerships. Before, the organization could use its own accounting. This is a big change and could prove burdensome on organization bookkeeping.
Hospitals: Hospital organizations must complete Schedule H to Form 990, but the revision demands much more descriptive requirements for “Needs Assessment,” financial assistance policies, billing and collections policies, and emergency medical care policies. After 2011, hospital organizations are required to take into account (1) input from persons who represent the broad interests of the community served by the hospital facility in developing a Needs Assessment; (2) Needs Assessments must be made widely available to the community; and (3) each hospital facility will be required to conduct a Needs Assessment at least once every three years.
The revised Form 990 does have further clarifications to prior form language and instructions. It is important your tax preparer is aware of these changes.