A Sampling of Common Errors on Forms 990

More than 600,000 tax-exempt organizations file informational tax returns with the Internal Revenue Service each year. The agency says that it cannot estimate how many of the returns contain mistakes, but that a sampling of the forms found the following errors that could not be resolved without asking each group for more information:

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On the 990-PF

(filed by foundations)

* 61 per cent of the forms with mistakes failed to include a copy of a newspaper notice announcing that the forms had been made available for public inspection.

* 15 per cent did not properly provide information on grant-application procedures (or indicate that they do not accept unsolicited proposals).

* 12 per cent did not complete all the questions in Part 2, which asks for a listing of the book value and fair market value of assets and liabilities, as well as net assets of fund balances.

* 4 per cent did not complete all the questions in Part 1, which asks for an analysis of revenues and expenses.

On the 990
(filed by organizations with annual gross receipts of more than $25,000)

* 52 per cent of the forms with mistakes failed to complete Schedule A, the section of the form that asks charities and certain types of charitable trusts to list the salaries and benefits awarded to top officials and to top-paid independent contractors. This part of the form also focuses on advocacy activity and contains additional questions about financial issues not covered on the Form 990 itself.

* 17 per cent did not have the signature of any of the organization’s officers.

* 10 per cent did not list the correct tax year.

On the 990-EZ
(filed by organizations with annual gross receipts of less than $100,000, and total assets of less than $250,000 at year’s end)

* 54 per cent of the forms with mistakes failed to complete Schedule A, the section of the form that asks charities and certain types of charitable trusts to list the salaries and benefits awarded to top officials and to top-paid independent contractors. This part of the form also focuses on advocacy activity and contains additional questions about financial issues not covered on the Form 990 itself.

* 15 per cent should have filed the more complicated Form 990 instead of the EZ form.

* 6 per cent did not list the correct tax year.

* 5 per cent did not have the signature of any of the organization’s officers.