2019 Form 990 and instructions contain notable changes

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Overview

The 2019 Form 990, Return of Organization Exempt from Income Tax, and instructions contain the following notable changes: 

  • The order in which officers, directors, trustees, key employees, and highest compensated employees must be listed in Part VII has been changed. 
  • Part IV, Lines 26-28 and Part X, Lines 5, 6 and 2 have been updated for consistency with the reporting requirements and definitions in Schedule L, Transactions with Interested Persons
  • Part X, Lines 27-29, has been updated to reflect the changes in endowment fund reporting under Accounting Standards Update (ASU) 2016-14. 
  • The instructions: 
    • Include information on expanded electronic filing requirements that take effect for tax years beginning on or after July 2, 2019. 
    • Omit a previous reference to Rev. Proc. 2018-38, which provided that certain organizations that file Form 990 (other than Section 501(c)(3) organizations) would not have to report the names and addresses of their contributors on Schedule B. (Note, however, that the IRS has issued final regulations to effect this change). 
  • The Schedule E instructions explain the third method for a private school, college, or university to satisfy the publicity requirement with respect to its student nondiscrimination policy by posting to its Internet web page, as set forth in Rev. Proc. 2019-22.

The IRS continues to make (1) minor stylistic and substantive corrections, (2) updates to annual revenue procedure references and inflation-adjusted dollar amounts, and (3) useful cross-references to formal IRS guidance and information available on the IRS website. 

Note: Below are links to our annotated version of the 2019 Form 990, including all schedules and instructions. The documents include PwC’s highlights of and comments on key changes for 2019. The documents are searchable and include bookmarks to assist with navigation.

The takeaway

The 2019 Form 990 contains several notable changes, including new e-filing requirements, updates to the triggering questions for Schedule L, changes in endowment asset characterization, new ordering for individuals reported on Part VII based on amount of compensation, and a new method for publicizing a school’s nondiscrimination policy. Failure to timely file a complete and accurate Form 990 may have adverse impacts, including penalties and loss of tax-exempt status. As a result, nonconforming or incomplete responses in Form 990 could result in additional IRS scrutiny.

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Rob Friz

Health Services Tax Leader, PwC US

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