Form 990: Could yours be front page news?

One major difference between Form 990 and the tax forms filed by individuals and businesses has to do with privacy and confidentiality. On Form 990, almost nothing (except the list of donors' names) is private or confidential. The financial data of exempt organizations is out there for the world to see—and now that many Web sites carry copies of Forms 990, "the world" is probably not an exaggeration.

One major difference between Form 990 and the tax forms filed by individuals and businesses has to do with privacy and confidentiality. On Form 990, almost nothing (except the list of donors' names) is private or confidential. The financial data of exempt organizations is out there for the world to see—and now that many Web sites carry copies of Forms 990, "the world" is probably not an exaggeration.

Form 990 is prepared for review by the IRS as well as state attorneys general, to whom copies are sent. Others can also be expected to read an organization's Form 990, including:

(1.)           Congress, if it is studying an issue to which the organization's Form 990 relates.

(2.)           State officials and agencies that perform charitable or regulatory oversight, or enforce state income tax filing requirements.

(3.)           Prospective donors and their legal and financial advisors. The $50 donor might not seek out a Form 990, but there is a high probability that the largest donors will.

(4.)           Members of the general public who are interested in the programs and accomplishments of an organization, and the efficiency with which it operates.

(5.)           News media and researchers seeking information about an organization.

(6.)           Self-appointed "watchdog" organizations and others who may be checking up on an organization. These may include competing charities, organizations with opposing policy views, or taxable organizations checking to see whether a tax-exempt organization is providing unfair competition.

(7.)           Employees and former employees of the organization.

When completing Form 990, the answers should be prepared as if they may appear on the front page of the local newspaper…they just might!

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