Definition & Purpose of Form 990 for 2013
Form 990 for 2013 is an informational tax return used by organizations exempt from income tax under sections 501(c), 527, or 4947(a)(1) of the Internal Revenue Code in the United States. It is critical for providing transparency regarding the financial activities, governance policies, and compliance of these tax-exempt entities. This form is a public document that provides insight into an organization's operations, including revenue, expenses, and executive compensation.
Key Features and Functions
- Financial Activities: Details about income, such as donations, grants, and investment returns, and expenses, including program services and management costs.
- Net Assets: Information on changes in the organization’s financial position over the reporting period.
- Governance Compliance: Information about governance structures and policies to ensure adherence to tax laws and regulations.
Steps to Complete the Form 990 for 2013
Completing Form 990 for 2013 involves a systematic approach, covering multiple parts and schedules that must be accurately filled in:
- Gather Necessary Documents: Collect financial statements, records of revenue and expenses, and governance documents.
- Identify Relevant Sections: Review which parts of Form 990 apply to your organization, as it might not be necessary to fill out all areas, depending on your activities and size.
- Part I - Summary: Enter the highlights of your organization's annual performance.
- Parts II-VI: Provide detailed financial information, disclosures about governance, and compensation.
- Parts VII-XII: Complete sections on Compensation of Officers, Directors, Trustees, Key Employees, high earners, and Independent Contractors.
- Attach Relevant Schedules: Based on the responses, attach the required schedules that add depth to the information listed in the main parts of the form.
Detailed Instructions
- Schedule A: Describes the organization's public support status.
- Schedule B: Lists contributions received over $5,000 from individual donors or grants.
- Schedule C: Details political campaign and lobbying activities.
Filing Deadlines and Important Dates
Organizations must file the 2013 version of Form 990 by the 15th day of the 5th month after the close of their fiscal year. For example, if the fiscal year ends on December 31, 2013, the form is due by May 15, 2014.
Possible Extensions
- Automatic 3-Month Extension: Organizations can submit Form 8868 to request an automatic extension.
- Additional 3-Month Extension: A second request is allowed if more time is needed, but this is not automatic and carries stricter requirements.
IRS Guidelines for Submission
To ensure compliance and validity, organizations must adhere to specific instructions outlined by the IRS:
- Electronic Filing Requirement: Organizations with $10 million or more in total assets for the tax year must e-file.
- Email Alerts: Register with the IRS e-Services to receive notifications and confirmations of submission status.
- Ongoing Updates: Monitor the IRS website for any changes or updates to form instructions or requirements.
Penalties for Non-Compliance
Failure to file Form 990 timely and accurately can lead to significant penalties:
- Monetary Fines: Daily penalties may be imposed, starting at $20 per day with a maximum of $10,000 or 5% of the organization’s gross receipts, whichever is less.
- Loss of Tax-Exempt Status: Continued failure to file over three consecutive years results in automatic revocation of tax-exempt status.
Who Typically Uses Form 990 for 2013
Various types of organizations are required to file this form, primarily those exempt under section 501(c):
- Charitable Organizations: Including educational and religious entities.
- Advocacy Groups: Organizations engaged in policy change activities.
- Social Welfare Organizations: Commonly known as 501(c)(4)s.
Specific Scenarios
- Organizations with more complex financial structures or substantial donor contributions.
- Entities involved in lobbying or political activities that require comprehensive disclosure.
Important Terms Related to Form 990
Understanding essential terminology related to Form 990 is important for filing accuracy:
- Exempt Purpose: The reason an organization is categorized as tax-exempt.
- Program Service Revenue: Income from activities directly related to the organization's mission.
- Net Unrelated Business Income: Revenue from unrelated activities subject to taxation.
Key Elements of Form 990
Understanding the critical components included in the Form 990 for 2013 is vital in ensuring accurate and compliant reporting:
- Statement of Financial Position: Summary of assets, liabilities, and net assets.
- Statement of Revenue: Breakdown of all income, distinguishing between related and unrelated sources.
- Program Service Accomplishments: Detailed explanation of the outcomes tied to the organization’s mission-based activities.
Each element contributes to an overarching transparency goal, supporting public trust and compliance with federal requirements.
