*(Excerpted from Vincentian Life: Conference)
IRS Form 990
The IRS requires all nonprofits to submit a Form 990 describing their financials and works at the end of their fiscal year. The IRS gives our Councils and Conferences until February 15 of the following year to submit this report. However, not all Conferences are required to submit it.
Only those Conferences that have their own EIN need to submit this report. For all Conferences that have been allowed to use their Council’s EIN, the Council (District or Diocesan) will submit a consolidated 990 to the IRS which includes the Conference information. (Additional information about submitting Form 990 tax returns appears at the end of this article.)
The Conference guidelines for service should be reviewed each year during October and/or November to ensure that they reflect current conditions. This is the time that changes in the guidelines should be considered. However, the guidelines are the work of the Conference members and they may change them at any time. There is nothing magic about this time of year. A regular review is good practice.
This is the time of year recommended for all Conferences to have an annual audit. This is an informal audit and may be done by two or three members of the Conference, but not by those responsible for accounting or disbursing funds. The purpose of the audit is not to find fault. Its purpose is to assure the members of the Conference that all proper procedures are being followed and all the funds of the Conference have been reconciled on a regular basis. It is recommended that an audit take place when a new President takes office.
The National Council website has a sample audit procedure on the Growth & Revitalization page under Conference Officer Training.
In the Manual of the Society, there is a list of the various types of documents and records that the Conferences typically deal with. Some are kept permanently. Some are kept for seven years and then destroyed. Some are kept for three years and then destroyed. Some are kept for one year.
The beginning of the fiscal year is the time for the Secretary and Treasurer to review their records and do what is appropriate with each type of document.
The beginning of the fiscal year is a time to ensure that everything related to last year has been properly reviewed and reported. It is also time for records to be properly stored. This is a time when Conference members should have every assurance that they are moving into the new fiscal year in good form.
Form 990 Tax Returns
Tax-exempt organizations, such as the Society of St. Vincent de Paul, which operate with a 501(c)(3) status are obligated to report their activities to the Internal Revenue Service on an annual basis. This reporting is done on a Form 990, Return of Organization Exempt From Income Tax. The form is intended to give the government and public a picture of the organization’s activities each year. Some donors rely on Form 990 as their primary or sole source of information about a particular organization when selecting charities to support.
Form 990 includes information about the organization’s finances, governance, and compliance with certain federal tax filings and requirements, as well as compensation paid to the highest-earning employees. Additional schedules may be required depending upon the entity.
Generally, subsidiary Conferences that are using the Council’s EIN can rely upon the Council to submit a Form 990 to the IRS if they provide their information to the Council. A Conference whose tax exemption is covered under a Council’s group ruling must annually submit a Form 990 for their individual EIN. The Form 990 is due on the 15th day of the 5th month following the end of the organization’s taxable year. Most Councils end their fiscal year on September 30. These Councils should file their tax return by February 15.
There are two alternate versions of Form 990:
- Some Councils may be eligible to complete a simplified Form 990-EZ, Short Form Return of Organization Exempt From Income Tax. Criteria include gross receipts of less than $200,000 and total assets less than $500,000 at the end of the tax year. The short form is also open to public inspection.
- Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ, applies to small tax-exempt organizations with annual gross receipts of $50,000 or less. Councils and Conferences that are included in a group return may not use this form. Furthermore, it is important to note that the 990-N must be completed and filed electronically. There is no paper form.
Conference and Councils are encouraged to seek professional advice by hiring an accounting firm or Certified Public Accountant familiar with nonprofit taxes to review the organization’s finances in order to produce audited financial statements and the Form 990 tax return. Accounting firms will typically complete Form 990 on behalf of the organization, ask leadership to review the documents and file on your behalf.