Magazine article Behavioral Healthcare Executive

Form 990 Brings Big Changes: A CFO and an Attorney Discuss the Impact of the New IRS Form

Magazine article Behavioral Healthcare Executive

Form 990 Brings Big Changes: A CFO and an Attorney Discuss the Impact of the New IRS Form

Article excerpt

Historically, the completion of Form 990 merely signaled to me the end of another annual audit process. Once the 990 was reviewed, signed, and submitted to the IRS, the annual audit "ritual" was put to bed for another year. Compiling the information was largely a joint effort by the business office and our external auditors, with a little input from human resources.


The majority of the information the 990 required was available from the financial audit. Human resources provided salary and benefit information on the five highest-paid employees, as required on Schedule A. Our external auditors compiled and inputted the required information. I simply reviewed it, ticked and tied the numbers back to our internal reports, signed it, and mailed it to the IRS.

There were a few questions regarding our major programs and services, but they were brief and remained static from year to year. Because of this, we required very limited involvement--if any--of our clinical leaders. The 990 and Schedule A asked a handful of yes/no questions regarding compliance and operational issues with little explanation required. Our internal staff spent approximately 3 to 4 hours after the completion of the financial audit to finalize the 990. Those days are over!

The new 990, which became effective for the 2008 tax year (filed in 2009 or 4-1/2 months after fiscal year end), requires much more time and effort. Many more people throughout our organization are involved in the preparation, review, and internal approval processes. This is no longer a project that can be completed in the back office and quietly submitted to the IRS.

The revised 990 is an 11-page, 11-part core document with ultimately 16 additional detailed schedules that may need to be completed based on the complexity of the organization's programs/services. The major changes center on compensation of officers, directors, trustees, key employees, and the highest-compensated employees, as well as governance and compliance issues. Disclosure is required of the governance structure, key organizational policies, and disclosure practices. Another area of significant change includes the determination of public charity status and public support, supplemental financial reporting, fund-raising, special events, and gaming (e.g., bingo).

The new 990's Part I is a high-level summary of organizational information, including the mission, the governing body's number of members, and number of employees and volunteers. …

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