InfoRich Group, Inc. Newsletter--The New IRS 990 Form

Solutions for the Development Office

Greetings

November 18, 2008

Dear Friends:

It has been quite a while since we last published an issue of InfoRich Group, Inc.'s Solutions newsletter. Several readers have asked us why we stopped publishing Solutions.

As with all things, we like to make sure that we put our best efforts into any project that we start. And, frankly, newsletters take time and energy to produce. As our client needs were increasing, we were finding less time available to create the quality content that we knew you wanted and deserved. So, we temporarily suspended the newsletter.

As we began to redesign our website, we also began thinking about Solutions and talking to clients about it. We were thrilled to learn that many of you have kept previous issues on file to reference to at a later time. So, after careful consideration, I am pleased to tell you that we will resume publishing the newsletter on a monthly basis. We plan to bring you news and articles that will help you in your day-to-day development activities.

We would love to hear feedback from you about the content (good and bad) and will welcome your suggestions on future topics. We also will be featuring guest writers from time to time. (Please let me know if you have a topic you'd like to write about as an article for Solutions.)

This issue will focus on the new IRS Form 990 form because it is such an important topic. If you are one of the organizations that must file the new 990, be sure to read the information below and to consult your accountant and auditor early on in the process.

For those readers in the Philadelphia region, I was invited to speak at the Center For Nonprofit Success' Philadelphia Fundraising Summit on Wednesday, November 19, 2008 at 8:00 AM. The topic will be Engaging Your Board.

Lastly, please take a moment to confirm your subscription to this newsletter (see the link in the column to the right). Doing so will ensure that you will continue to receive future issues.

Happy reading,

Marge King

P.S. Our redesigned website is now "live" so please take a moment to look at it and tell us what you think.

Visit our newly redesigned website.

The New IRS 990 Form

The new 990 is creating quite a stir! And rightfully so since it is the first revision to the form in 30 years.

The new form has a "core" form that is 11 pages long and will be phased in over three years starting with 2008. The 11-page, 10 part core form consists of the following parts:

· Part I: The Summary (Page 1)

· Part II: Signature Block of officer and paid preparer

· Part III: Statement of Program Service Accomplishments

· Part IV: Checklist of Required Schedules

· Part V: Statements Regarding Other IRS Filings and Tax Compliance

· Part VI: Governance, Management and Financial Reporting

· Part VII: Compensation of Officers, Directors, Trustees, Key Employees and Other Highest Compensated Employees or Independent Contractors

· Parts VIII, IX and X: Statements of Revenues and Expenses, Balance Sheet

The new Form 990 also has 16 schedules. Fortunately, Part IV, Checklist of Required Schedules, was designed to help filers determine which schedules need to be completed and filed with their new 990.

· Schedule A, Public Charity Status and Public Support

· Schedule B, Schedule of Contributors

· Schedule C, Political Campaign and Lobbying Activities

· Schedule D, Supplemental Financial Statements

· Schedule E, Schools

· Schedule F, Statement of Activities Outside the United States

· Schedule G, Supplemental Information Regarding Fundraising or Gaming Activities

· Schedule H, Hospitals

· Schedule I, Grants and Other Assistance to Organizations, Governments and Individuals in the U.S.

· Schedule J, Compensation Information

· Schedule K, Supplemental Information for Tax Exempt Bonds

· Schedule L, Transactions with Interested Persons

· Schedule M, Non-cash Contributions

· Schedule N, Liquidation, Termination, Dissolution or Significant Disposition of Assets

· Schedule O, Supplemental Information to Form 990

· Schedule R, Related Organizations and Unrelated Partnerships

Look at the new "core" 990.

Phase In of the New Form 990

Looking to understand when your organization is required to file the new 990?

Review the tables below to determine the timing for your organization. According to the IRS, to determine which form your organization should file, only consider gross receipts (do NOT deduct expenses).

2008 Tax Year (Filed in 2009 or 2010)	Form to File
Gross receipts normally ≤ $25,000	990-N
Gross receipts > $25,000 and < $ 1 million, and Total assets < $2.5 million	990-EZ or 990
Gross receipts ≥ $1 million, and/or Total assets ≥ $2.5 million	990

2009 Tax Year (Filed in 2010 or 2011)	Form to File
Gross receipts normally ≤ $25,000	990-N
Gross receipts > $25,000 and < $500,000, and Total assets < $1.25 million	990-EZ or 990
Gross receipts ≥ $500,000, and/or Total assets ≥ $1.25 million	990

2010 Tax Year and later (Filed in 2011 and later)	Form to File
Gross receipts normally ≤$50,000	990-N
Gross receipts > $50,000 and < $200,000, and Total assets < $500,000	990-EZ or 990
Gross receipts ≥ $200,000, and/or Total assets ≥ $500,000	990

Part VI: Governance, Management and Financial Reporting

Many of the new 990 changes focus on transparency and Part VI focuses specifically on governance. In Section B of Part IV, the IRS asks about whether your organization has written policies on:

ü Conflict of Interest

ü Whistleblower

ü Document Retention and Destruction

It also asks about your organization's "process for determining compensation."

While it is unclear what the IRS will do with this information, donors are increasingly sophisticated and now that this information is being gathered, I suspect that some donors will view organizations with written policies in a more favorable way than those without.

Given the nonprofit Board of Directors governance responsibility, these policies and processes, in most cases, will require board approval. Don’t wait until you are gathering information to complete the new 990 before you address these policies. Allow adequate time to develop and discuss these issues. With all of the other changes to the 990, you’ll be glad you took the time to get these policies in place now.

Coming Soon—Sample Policies

Don't let drafting new policies get you down. Don't spend hours and hours of your precious time researching what to include and how to develop these policies.

InfoRich Group, Inc. is developing a series of sample policies that will save you time and money. The first set of samples policies will focus on Conflict of Interest and we expect to have them ready for release by the end of the year.

The second set of sample policies will focus on Whistleblowers Policy. Look for information on this series in future issues of Solutions.

In This Issue:

Greetings

The New IRS 990 Form

Phase In of the New Form 990

Part VI: Governance, Management and Financial Reporting

Coming Soon—Sample Policies

Links

IRS Forms and Highlights of the New IRS Form 990

Instructions for the New 990

Getting Ready for the 990H: An Initial 12-Step Program

Confirm Your Subscription

Visit InfoRich Group, Inc.'s website