Top 10 Things Exempt Organizations Can Do To Prepare for the New Form 990
Marc Azar, Partner, Smith & Howard (404.874.6244)
10. Examine all policies, practices, and contracts in place, identify any weak areas and update if necessary for increased transparency
9. Review the composition/make up of your board and consider an audit, compensation and/or investment committee and consider having members with business/legal knowledge.
8. Apply IRS safe-harbor test (rebuttal position) for compensation arrangements with key employees/insiders – comparable studies, advanced board approval, and bonuses not tied to the bottom line.
7. Detail reporting for contributions, income, expenses for both audit and 990 – accounting software and internal resources.
6. Adapt best practices from Industry Groups – the AAM, BBB Seal of Approval for contributors.
5. Beware of what my be considered political activities/involvement in an election year or face losing of tax exempt status – candidates position, informal endorsements, etc
4. Focus on Payroll – 1099 v. W-2 matters and taxable fringe benefits – business vehicles, cell phones, computers, taxable deferred comp arrangements, etc.
3. Evaluate related party transactions – loans with key insiders, business transactions with companies where board members are employees/shareholders, etc. and document at arms length
2. Plan for an increase in transparency, time and accounting fees.
