Staying away from Popular 990 Nightmares

Filing Form 990s is tedious adequate devoid of producing popular (avoidable) blunders that call for corrective action and delay processing. Producing these blunders may perhaps bring about the IRS to send the return back to you, or call for you to deliver more information and facts. In some situations, missing information and facts can even trigger an audit.
Right here are a handful of points to recall forever (okay, no less than till just after your
filing date):

• Get the return signed by the ideal individual. To produce a return full, an authorized officer on the nonprofit organization ought to sign the tax return inside the space offered. The officer may perhaps be a president, vice-president, treasurer, assistant treasurer, chief accounting officer, or other corporate or association officer who’s authorized to sign. In the event the return is filed to get a trust, it ought to be signed by an authorized trustee.

• Examine the appropriate boxes. Quite a few sections of Form 990 and 990-EZ ask you to examine boxes or answer “yes” or “no” to distinct inquiries about your organization’s operations and activities. Be certain your organization discusses these inquiries together with the preparer or firm accountable for completing the return. In distinct, be certain that the information and facts submitted is existing and verified every single year in place of getting blindly copied off of a prior year’s return.

• Leave the ideal spaces blank. By way of example, if an officer or employee of the organization prepares the return, leave the paid preparer’s space blank. Only an individual who’s paid to prepare the tax return should really sign the return and fill in their name because the paid preparer.

• Hold your records for no less than 3 years. You will need to help keep your nonprofit organization’s records for 3 years from the date that the return is due or filed, whichever is later. Having said that, hold records that verify what the organization paid for property substantially longer - frequently till the property is sold or otherwise disposed of. Hold the returns themselves indefinitely.

• Assemble accurately. Form 990 or Form 990-EZ ought to be assembled with supporting documents inside the following order: Form 990 or Form 990-EZ; Schedule A; Schedule B; attachments to Form 990 or 990-EZ; attachments to Schedule A; and attachments to Schedule B. The directions for every single variety of Form 990 lists the order of attachments.

• Label attachments. If attachments are filed along with your form, they ought to be labeled appropriately together with the form quantity and tax year, the organization’s

name, plus the employer identification quantity.