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Form 990: A board member’s checklist

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Form 990: A board member’s checklistOne of the duties of a not-for-profit organization’s board is understanding the document upon which its tax exemption depends ― Form 990.

Form 990, Return of Organization Exempt From Income Tax, is an informational return that must be filed each year to maintain exemption from federal taxes. The form is also required by many state agencies for regulation purposes. It is a public document of increasing interest to the IRS, state attorneys general, watchdog agencies, the press and the public.  

Because of the vital link between the work of a not-for-profit’s board and the success of the mission, the IRS encourages an active and engaged board. For this reason, Form 990 asks if the return was furnished to the board prior to filing. In addition, all organizations must describe the process, if any, the board or a designated committee used to review the form.


The IRS, state attorneys general, watchdog agencies, the press and the public all read organizations’ illuminating Form 990s with increased scrutiny of the following areas:  
Compensation transactions, including conflicts of interest and intermediate sanctions
Unrelated business activities and net operating losses
Fundraising activities, including gaming
Lobbying and political activities
Hospitals and community benefit standards
Grant-making policies, practices and procedures
Disclosure of fringe benefits and other executive perks
Governance structure, including various best practice policies and transactions with members and their related organizations
Tax-exempt bond financing, including allowable use of funds and arbitrage calculations
Disclosure of foreign activity
Form 990 is designed to enhance the transparency of mission and activities, and promote compliance with tax law. An understanding of both transparency and compliance is essential for board members to effectively perform their fiduciary responsibilities.

Our checklist offers you an interpretation of particularly important sections and schedules, and prompts for confirming your organization’s responses are complete and accurate while presenting the organization in the most favorable light to readers of the form.

 

Download the checklist (PDF).

The Not-for-Profit tax professionals of Grant Thornton LLP have worked extensively with clients to prepare Forms 990, 990-PF, 990-T and other related returns that are complete and accurate, and present our clients and their tax returns in the most advantageous light.

To learn more, contact Dan Romano, National Partner-in-Charge, Tax Services for Not-for-Profit and Higher Education Practices, at +1 212 542 9609 or Qi Wen Liang, Senior Manager, Tax Services for Not-for-Profit and Higher Education Practices, at +1 212 624 5399.