Tuesday, February 17, 2009

A few FAQs about the IRS 990 & Audits

  • What is the 990?

GuideStar explains that the 990 is "Form 990 is an annual reporting return that certain federally tax-exempt organizations must file with the IRS. It provides information on the filing organization's mission, programs, and finances."

  • Do nonprofits have to fill out a 990?

Yes, all nonprofits have to fill out a 990. There are only a couple exceptions: nonprofits that have less than $25,000 in revenue, nonprofits that are not 501c3 exempt, and most faith-based organizations.

  • Do nonprofits have to have their financials audited?

This varies state to state. Most states have threshold amounts. For example, in Minnesota a nonprofit organization has revenue greater than $350,000 then they are required to have their financials audited.

  • Can a nonprofit fill out their own 990?

Yes, they can. Nonprofits are not required to hire an outside consultant to do their 990, they can have internal staff complete their 990. Although, if the organization is large or has complex financials, it is usually best to hire an accountant to do this.

  • Does a nonprofit have to make their 990 public?

Yes, nonprofits are required to have their 990s available to the public. So, if someone requests a copy of it, you need to give it to them. Many nonprofits like Pro-Choice Resources publish their 990s online to make it easier for their donors and be more transparent.

If you have any additional questions about 990s or auditors, ask them in comment section and I will do my best to answer them.


Erika said...

need help filling out a 990 form for one of my client's. I run the books for a non-profit org. and they don't want to use an expensives accountant to fill it out, but I have no idea where to begin?!