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Julia Satti Cosentino and Melissa Sampson McMorrow publish “Is Your Charity Ready for the New Form 990”

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In-House Counselor
February 2009

Julia Satti Cosentino and Melissa Sampson McMorrow, members of the firm’s Nutter Charitable Advisors practice group, published “Is Your Charity Ready for the New Form 990” in the February 2009 issue of In-House Counselor. The article discusses the new Form 990, which must be filed annually by public charities and certain tax-exempt organizations. The revision, effective for tax years beginning in 2008, marks the most significant change to the form in nearly thirty years.

The change that has garnered the most attention is a new set of questions devoted to the organization’s governing body, management policies and disclosure to its constituents. These questions are meant to elicit information on policies not required by the tax code, such as whether the board of directors was provided with the organization’s Form 990 before it was filed. Yet the Service maintains that these inquiries are within its purview, because it sees good governance as fostering tax compliance.

Julia and Melissa note that the revisions to Form 990 require the immediate attention of governing boards and management. Policies must be reviewed and systems must be put in place to assemble the necessary information. For example, the Service has advised that the questions about governance, management and disclosure may be answered affirmatively by an organization only if the policies are adopted by its board of directors before the close of the 2008 tax year.

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