2013 Form 990

Posted on Wednesday, November 06, 2013

The IRS has released a draft of the 2013 Form 990, Return of Organization Exempt from Income Tax, and related instructions.  There are no significant changes to the form itself; however, the instructions have been clarified to reflect the following.

The General Instructions:

Clarify that a short period return cannot be filed electronically unless it is an initial or final return for which the “Initial return” or “Terminated” box is checked in Item B of the Form 990 Heading.

Explain that if a Form 990-N filer changes its accounting period, it must report this change either on Form 990/990-EZ or Form 1128.

Clarify that organizations that change their accounting period must report any adjustment required by section 481(a) in Parts VIII through XI of Form 990 and in Schedule D (Form 990), Parts XI and XII, as applicable.

Instructions for Heading. Items A-M:

Clarify what documentation must be attached to Form 990 to support an organization’s name change.

Clarify what documentation must be attached to Form 990 by an organization that has terminated, dissolved, merged, or had its exemption revoked by the IRS.

In Part IV, Checklist of Required Schedules:

Line 2 instructions clarify when an organization can exclude from Schedule B contributors that fall below the greater-than-$5,000/2% threshold.

Line 25b instructions clarify when an organization needs to answer “Yes” to report that it became aware of an excess benefit transaction with a disqualified person in a prior year.

Line 26 is revised to clarify that the organization must file Schedule L, Part II, if it reported any amounts on Part X, line 5, 6, or 22 for receivables from or payables to interested persons.

Instructions for Part VII, Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors:

Clarify that directors’ compensation for non-director independent contractor services to the organization and related organizations must be reported in Part VII, Section A.

Clarify that compensation from a management company to one of the organization’s officers, directors, trustees, key employees, or highest compensated employees is generally not reportable in Part VII, Section A.

In Part VIII, Statement of Revenue:

Line 1 instructions clarify that discounts on services cannot be reported as contributions.

In Part IX, Statement of Functional Expenses:

Line 10b instructions clarify the cost reported on this line.

Line 11 instructions clarify how to report expense payments and reimbursements to contractors.

The draft form and instructions can be found at

2013 990 instructions (draft)

2013 Form 990 (draft)

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

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