IRS Form 990 Board of Director Requirements

The responsibilities of a non-profit Board of Directors focus primarily on ensuring the organization follows its mission and remains fiscally sound.  Key roles might include discussing and voting on the highest priority issues, setting organizational policies, and hiring and evaluating key staff.  Board members approve the operating budgets, establish long-term plans and manage fundraising.  Board member diversity often spans many industries and areas of expertise.  Members are not required to know everything about nonprofit management, but they are expected to act in the best interests of the organization.

The IRS Form 990, Return of Organization Exempt from Income Tax, was redesigned in 2008 and is affective for forms filed in 2009 and later.  This was the first redesign of the form in over 30 years.  Although the revisions affect many areas of the form, many clarifications were made regarding filing requirements related to Boards of Directors.  As you begin your year-end accounting procedures, below are some important reporting requirements with the 990 Form 2012, affecting nonprofit organizations and information relating to the governing body.

Board /Governing Body Clarifications:

  1. A governing body consists of one or more people.
  2. Organization’s must clarify when Board chair compensation is considered officer/employee compensation and when it is considered director compensation.
  3. Elimination of the requirement that a business transaction or relationship involving an officer, director, trustee, or key employee of the organization must be reported simply because that person was a key employee of another organization with which the organization or another officer, director, trustee, or key employee conducted business.
  4. Request whether any governance decisions of the organization are reserved to, or subject to approval by, persons other than the governing body.
  5. Adoption of a policy by the governing body includes adoption by a committee authorized by the governing body to do so.
  6. An organization that merely informs its governing body members that a copy of the Form 990 is available upon request has not provided a copy.

To learn more about other recent changes, the IRS provides a summary at http://www.irs.gov/pub/irs-tege/2011_form_990_significant_changes.pdf.  The IRS also offers live assistance Monday through Friday from 7:00 a.m. to 7:00 p.m. by calling 1-800-829-1040.

If you need to file a Form 990-EZ, or Form 990-N for your nonprofit, we invite you to consider Aplos Software, an authorized IRS e-file provider.

Below are also a few of our most popular accounting blogs and tax blogs that you may find helpful.

  1. Which Form 990 should my nonprofit submit
  2. How to report fundraising events on Form 990 and Form 990 EZ
  3. Free Year-end Accounting Procedures Checklist
  4. Free Month-End Accounting Checklist
  5. Accountants Review Aplos Nonprofit Accounting Software

Good luck and remember this blog is not meant to be a substitute for professional accounting services, just a helpful resource. Always consult a CPA or trusted professional if you seek tax or accounting advice.

Share
This entry was posted in 501(c)3, Aplos, Form 990, Non-profit, Tax and tagged , , , , , , , , , , . Bookmark the permalink.

Comments are closed.