Tuesday, November 16, 2010

Comments by ABA/CalBar Nonprofit Committees Regarding Form 990

Lisa Runquist recently chaired a joint task force of the Nonprofit Organizations Committees of both the Business Law Sections of the American Bar Association and the California State Bar. The purpose of this committee was to draft comments to the IRS regarding the Form 990, Return of Organization Exempt From Income Tax.  Letters from both the ABA and CalBar with these comments were submitted to the IRS on November 8, 2010.

As the introduction to the comments states, "as attorneys who work regularly with nonprofit organizations, especially in the areas of entity formation, organization and governance, we are concerned about a number of the provisions [on Form 990] dealing with these areas." With the Form 990 revision in 2007, the IRS has become increasingly involved with overseeing the governance of tax-exempt organizations, in addition to their financial reporting and tax compliance. The comments of the committees are intended to help the IRS improve the governance related items on the Form 990 so that it enable organizations to more accurately reflect their legal requirements, structures and the practices in their responses.

A copy of the complete comment letter is available on the ABA website(pdf).

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