September 1, 2005 | Read Time: 2 minutes
The Internal Revenue Service has released draft versions of revised forms important to charities and has asked nonprofit organizations to comment on its ideas.
The draft of a revised Form 990-EZ, which is used by small charities, adds questions about their overseas activities, in an effort by the IRS to keep a closer eye on organizations as it monitors possible terrorist activities.
The current Form 990-EZ, in Part III: Statement of Program Service Accomplishments, asks charities to disclose the amounts of money that they have provided in grants. The draft form asks charities to check a box if the amounts include “foreign grants.”
What’s more, in Part V: Other Information, the IRS asks, “At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account, securities account, or other financial account)?” If the answer is yes, the charity is instructed to enter the name of the country.
The draft of a revised Schedule A to the Form 990 and Form 990-EZ asks a new question about compensation. The current Schedule A, in Part II: Compensation of the Five Highest Paid Independent Contractors for Professional Services, requests the name and address of each contractor paid more than $50,000, the type of service provided, and the compensation. The draft form also asks for the compensation of the five highest paid independent contractors “for other services.”
In addition, the draft version of Schedule A includes a new question aimed at helping the IRS gather information about conservation easements: donated land that the government worries can be improperly valued and handled.
On the draft form, the tax agency asksif organizations received a gift of “qualified real property interest” under the tax code.
The IRS draft forms are available online at http://www.irs.gov/charities/index.html. Comments about the forms may be e-mailed to the IRS by visiting http://www.irs.gov/formspubs/page/0,,id=10179,00.html.
