On Jan. 21, 2012, the IRS released the 2011 Form 990 for exempt
organizations, as well as most of the accompanying schedules. The due date for
filing the required return for an exempt organization that is on a calendar-year
taxable year is May 15, 2012, unless the organization obtains an extension. The
Form 990 and instructions reveal several important changes of which exempt
organizations should be aware.
The general instructions clarify that governmental units and affiliates of
governmental units that are described in Revenue Procedure 95-48, which normally
excuses such entities from filing requirements, must file an annual return if
they are classified as supporting organizations. Also, a new organization that
has not yet filed its Form 1023 or Form 1024 with the IRS must file a Form 990.
In the governance section of the Form 990, Part VI, the instructions state
that the organization should report whether the governing body delegated broad
authority to an executive or other committee or if any governance decisions are
reserved to or subject to approval by other persons. Where Part VI of the Form
990 asks if the organization provided copies of the Form 990 to the members of
its governing body before filing, the instructions direct the organization to
answer “No” if it merely made the Form 990 available upon request.
The instructions clarify the reporting of compensation for officers,
directors, employees, and independent contractors in Part VII and the reporting
of uncollectible pledges, refunds of contributions, contributions of facilities
and services, and Medicare and Medicaid payments in Part VIII of the Form 990.
In Part X, the organization must now report its share of assets in any
partnerships as reported on the Schedule K-1 issued by the partnership, rather
than by book value.
Schedule H, filed by hospital organizations, also has several major changes.
Schedule H now requires the organization to list each of its hospital and
nonhospital healthcare facilities, including those operated indirectly through a
disregarded entity or a joint venture. The form also now requires a separate set
of responses regarding policies and practices for each hospital facility.
Schedule H includes the community health needs assessment questions, in Part V
lines 1–7, that continue to be optional for any tax year beginning before March
24, 2012. The remaining questions in Part V, however, relating to the hospital
organization’s financial assistance policy, billing and collections policy,
policy relating to emergency care, and policy concerning individuals eligible
for financial assistance, must be completed by all hospital organizations.
Hospital organizations are also required to attach a copy of their most recent
audited financial statements to the Form 990.
Certain schedules have not yet been released in their 2011 format, including
Schedule E (Schools), Schedule G (Fundraising or Gaming Activities), Schedule I
(Grants and Other Assistance to Organizations, Governments, and Individuals in
the U.S.), and Schedule N (Liquidation, Termination, Dissolution, or Major
Disposition of Assets). The IRS has also not yet released the 2011 Form 990-EZ
or Form 990-T. The IRS notes in the instructions to Form 990, however, that it
has created a webpage that will reflect any updates affecting the Form 990, its
schedules, and the instructions at
The limitations for determining which return an organization is required to
file remain the same as for 2010. If an organization has gross receipts that are
normally less than $50,000, that organization is eligible to file Form 990-N for
its 2011 tax year, although it may choose to file a Form 990 or Form 990-EZ. If
an organization has gross receipts normally greater than $50,000 but less than
$200,000 and total assets less than $500,000, the organization is eligible to
file Form 990-EZ for its 2011 tax year, although it may also choose to file a
Form 990. If an organization has gross receipts of $200,000 or more or total
assets of $500,000 or more for its 2011 tax year, the organization is required
to file a Form 990.
McGuireWoods Nonprofit & Tax-Exempt Organizations Group
& Tax-Exempt Organizations group provides advice and guidance that enable
charities and other nonprofits to operate more efficiently and effectively in
today’s increasingly complicated, regulated and competitive environment.
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education attorneys represent
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