The IRS has recently posted the final 2011 Form 990, Return of Organization Exempt From Income Tax, and the related instructions on its website. The latest version of the Form 990 contains a few important changes that may be of significance to tax-exempt organizations.
The first required change is that an organization must complete Form 990, Part I of Schedule F, Statement of Activities Outside the United States, if it had foreign investments valued at $100,000 or more during the tax year. The prior requirement for completion of this schedule was if the organization had aggregate revenues or expenses or more than $10,000 attributable to various foreign activities.
Another change is the requirement that organizations complete Part X, Balance Sheet, by reporting their distributive share of assets in any joint ventures and other entities treated as partnerships for federal tax purposes according to the ending capital account as reported on Schedule K-1. In addition, an organization’s distributive share of investment income, royalties and rental income from joint ventures should be reported on specific lines of Part VIII, Statement of Revenue.
The Form 990 instructions also contain several changes including revising the definition of “grants and other assistance” to exclude certain payments by voluntary employees’ beneficiary associations. In addition, Appendix K, Contributions, was amended to clarify that in the case of a text message contribution, the donor’s phone bill meets the Section 170(f)(17) recordkeeping requirement if it shows the name of the donor organization and the date and amount of the contribution.
If you have any questions about these changes to the Form 990, please contact a Hertzbach professional.