| Spring 2005 |
Nonprofit Advisor
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Form 990 Letter: Not All IRS Letters are Cause
for Alarm
For most of us, a letter from the Internal Revenue Service can be
a little alarming. But many nonprofits have been receiving
correspondence from the IRS recently that is decidedly
non-threatening.
As part of its Form 990 Education Program, the IRS is mailing
educational letters to nonprofits in the hopes of gaining more
consistent reporting on 990s. The letters provide some diagnostics
and attempt to help nonprofits in filling out their Form 990s in a
more useful way.
Form 990 Overview
Form 990 is the Annual Information Return that must be filed with the IRS
within four-and-a-half months following the end of the fiscal year by most
tax-exempt charities - 501(c)(3)s - and social welfare organizations -
501(c)(4)s.
Organizations with few assets or limited revenue are not required to file,
nor are churches and related organizations that need not register to document
their tax-exempt status.
The 990 form highlights sources and amounts of revenue, expenses and the
names and titles of key personnel. This form helps calculate and illustrate the
ratio between program service (educational) expense and total expense.
A Focus On Fundraising Expenses
One educational letter in particular provides basic information on reporting
fundraising expenses. It asks recipients to evaluate how the organization has
been reporting such expenses and correct any discrepancies on the next Form 990.
File Online
Form 990 and Form 990-EZ can now be filed electronically. Visit
www.irs.gov
or call 1-800-555-4477 for more information. Also see Form 8453-EO,
Exempt Organization Declaration and Signature for Electronic Filing, and Form
8879-EO, IRS e-file Signature Authorization for an Exempt Organization.
Editor's Note: Bober, Markey, Fedorovich
& Company frequently works with clients on matters such as
this. Please call your partner / manager contact if you would like assistance in this area.
The Nonprofit Advisor is produced quarterly by Bober, Markey, Fedorovich
& Company's Nonprofit Services Team. If you would like additional information about the services that we can provide to nonprofit organizations, please call or email our team leader, Lori A. Sheets, CPA at 330.762.9785 or
lsheets@bobermarkey.com.
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