Form 990 What the watchdogs are watching
Several years have passed since the IRS revamped Form 990, Return of Organization Exempt from Income Tax, to its current, voluminous core form, which often needs numerous additional schedules.
Nonprofit entities and tax preparers seem to be getting a handle on the new form despite continued IRS modifications and clarifications. They are also becoming more comfortable with the document being publicly available upon request and published on websites such as Guidestar.org.
However, there are increased pressures from public scrutiny that should be making nonprofits and their advisers take a second look at their Form 990s. Not only is the IRS heavily examining these forms, but
watchdog agencies are also reviewing Form 990s so they can rate charities – and their rating reports
are gaining popularity with donors and grantors alike.