On June 17, 2015, The American Institute of CPAs (“AICPA”) offered more than 40 recommendations to the IRS for the Form 990, Return of Organization Exempt from Income Tax, and instructions.

The recommendations include the following:

  • adding thresholds throughout the instructions at the top of any schedule, part or line that has a specific threshold for reporting;
  • clarifying the definitions of “control” and “related organization” (specifically, brother/sister organizations) in the glossary of instructions;
  • making permanent optional reporting provided under Announcement 2012-19 pertaining to reporting of income from partnership interests;
  • adding a definition for “person” as defined in Internal Revenue Code section 7701(a)(1), and clarifying that indirect lobbying through a portion of membership dues via a separate organization should be reported where the lobbying may benefit the filer.

In addition, to alleviate the confusion among taxpayers as to the definition of “endowment funds” for Schedule D, Part V, the AICPA recommended that the instructions should specifically state that taxpayers with audited financial statements should report only those funds noted as “endowment” in their audited financial statements, rather than all of their temporarily and permanently restricted funds.  The AICPA provided sample language.

The June 17 recommendations were submitted in a matrix format, and each recommendations is assigned a ranking as to importance and urgency.

See full set of recommendations at: http://www.aicpa.org/Advocacy/Tax/DownloadableDocuments/2015-06-17-AICPA-Form-990-Comments-Matrix.pdf

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.