Economy

IRS requires more details from nonprofits at tax time

Nonprofit groups are paying a price for the corporate and accounting misdeeds of Enron, Tyco International and others nearly a decade ago.

That price is manifested in increased tax-preparation and auditing fees.

In simple terms, the federal government now requires nonprofit groups to provide more extensive information at tax time to make sure they are functioning correctly.

Consequently, accountants and nonprofit officials are spending more time filling out Form 990, the return that charities and tax-exempt organizations are required to file annually with the Internal Revenue Service. The more time tax preparers spend working, the higher their bill.

Barbara Hayes, executive director of the Sacramento Area Commerce and Trade Organization, said SACTO's tax-prep bill this year jumped to around $5,000, up from $2,500 last year.

"It's nominal but it nearly doubled. This is the first year we've encountered it," she said.

The IRS issued an updated Form 990 at the close of 2007, saying it reflected "the way this growing sector operates in the 21st century."

The revised form includes more schedules, including data on nonprofit groups' executive compensation, foreign activities, non-cash contributions and tax-exempt bonds. The form seeks a clear explanation of a nonprofit group's mission and its activities.

To read the complete article, visit www.sacbee.com.

  Comments