For as long as I can remember, nonprofits have been able to obtain a 3-month automatic extension for Form 990 filings simply by filing IRS Form 8868 before the initial due date. The Form 990 filing due date is four months and fifteen days after the organization’s fiscal year-end (e.g., May 15 for calendar fiscal years, and November 15 for fiscal years ending June 30). For an additional three-month extension, nonprofits have had to make a second filing – this time to ask permission for such additional extension and to demonstrate “reasonable cause”. Further, since the penalties for late Form 990 filings can be quite onerous (measured on a per-day late basis), it was generally best to get the Form 990 filed by the initial due date or no later than the available automatic 3-month extension.
Under new rules to take effect starting with tax years that begin after December 31, 2015, the original extension will now be for 6 months automatically. Calendar year filers for 2016 who file a timely extension will automatically have until November 15 , 2016 to complete their 990.
This will be a welcome relief to many groups – and probably to the IRS as well.
A draft form and instructions for the 2013 Federal Form 990 have been issued by the IRS. There are very minimal changes from the previous year’s form and instructions. There is some clarification in the instructions for reporting short period returns and accounting method changes that are very helpful. A link to the draft form and instructions is here:
Join Maryland Nonprofits and Aronson LLC Partner Rob Eby on February 21st for an informative seminar that will answer many of the most commonly asked questions regarding nonprofit accounting and operations:
This interactive discussion will address each of these questions and many more. Click HERE to register today and reserve your spot!
It must be tough to be a member of the board of directors for the Metropolitan Washington Airports Authority (MWAA) lately. There are numerous headlines blasting insider deals and lax travel policies. A former board member has gotten the boot after headlines ballyhooing how she obtained a full-time job with a salary of $180,000 a year to be an “advisor” with full benefits. The airports authority is adopting stricter travel policies and spending policies in the wake of such embarrassing details as a $9,000 plus ticket for one board member to travel to Prague. A stricter ethics policy is also being discussed by the board. Link to the NBC article: http://www.nbcwashington.com/blogs/first-read-dmv/Airport-Authority-Setting-New-Rules-168596246.html
The Federal Form 990 informational return filed by most nonprofit organizations, which is open to public inspection, covers every area mentioned above. Transactions with interested parties, conflict of interest polices, compensation of former board members are all revealed in the public return filed annually by nonprofit organizations. Good governance suggests the entire board should review a Form 990 before it is filed with the IRS, and during such a process issues such as these come to light for the first time for many board members. If the MWAA were a nonprofit organization required to file a Form 990, these shady deals and lax policies may have come to light for the board members much sooner, and possibly without all the headlines.