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In March 2007, the IRS published the results of its 2004 compliance check of tax-exempt organizations. The project's intent was to review compensation practices of exempt organizations and to identify areas of concern or abuse, also referred to as "excess benefit transactions." Missing information on Form 990 resulted in closer examination of hundreds of tax-exempt organizations.


The amount of required disclosure by tax-exempt organizations continues to grow. Changes to Form 990 in recent years have generated additional reporting requirements.  Related-party transactions, which explain existing relationships between officers, directors, trustees, key employees, highest paid employees and highest paid professionals or other independent contractors, must now be disclosed


Also, the IRS recently released a proposed redesigned Form 990 for public comment. With a goal of increasing transparency, the form expands disclosures on compensation, benefits and expenses. The IRS expects to use the redesigned form for the 2008 tax year.


Please contact your Rea professional for more information about Form 990 or for help with any questions that you may have.


- by Chris Roush, CPA, Shareholder (Millersburg Office)


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