TaxNewsFlash-Exempt Organizations

August 19, 2008
No. 2008-79

PRINTABLE VERSION

IRS Issues Instructions for New Form 990

The IRS this afternoon announced the release of revised instructions relating to the redesigned Form 990 that tax-exempt organizations will file starting with tax year 2008 (i.e., to be filed in 2009).

Most tax-exempt organizations must file an annual informational return with the IRS to maintain their tax-exempt status. Information reported on Form 990 is made available to the public. As noted in today’s IRS release (IR-2008-98, August 19, 2008), the Form 990 instructions are the final step in the IRS’s effort to update the Form 990—which had not been subject to major revisions since 1979. The IRS reported that the revised instructions feature several new tools intended to simply the completion of Form 990 and to facilitate uniform reporting.

The revised instructions and redesigned Form 990 are available on the IRS Web site: http://www.irs.gov/charities/article/0,,id=185561,00.html

KPMG Observation

The hyperlink to the IRS Web site, above, links to instructions that are labeled "DRAFT." The IRS informally advises that the reason for this label is that the instructions may be subject to certain changes for grammar or typographical errors before printing. A discussion of the instructions will be provided in a future edition of TaxNewsFlash-Exempt Organizations.

The IRS stated that it anticipates releasing instructions to the 2008 Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, in the next few weeks. As part of the phase-in of the redesigned Form 990 over a three-year transition period, many organizations not eligible to file the Form 990-EZ for 2007 will be eligible to file Form 990-EZ or Form 990 for 2008.

The IRS has posted a summary of the transition period filing requirements for Form 990, 990-EZ, and 990-N on the IRS Web site: http://www.irs.gov/charities/article/0,,id=184445,00.html

For more information, contact Rick Speizman, National Partner-In-Charge, KPMG’s Exempt Organizations Tax Practice (ExoTax), at (202) 533-3084 or rspeizma@kpmg.com

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