On the Record: Charity Laws Face Changes

5. Form 990 changes
Numerous concept changes to Form 990 have been proposed, many of which are borrowed from the Sarbanes-Oxley Act. Changes include requiring the CEO to sign and certify the Form 990; increasing penalties for failing to file or for filing an inaccurate and/or late Form 990; requiring increased disclosure about affiliated organizations and insider deals; requiring organizations with more than $250,000 in gross receipts to have independent audit financial statements; requiring a public charity to publicly disclose investments; requiring an attachment to Form 990 listing all partnership interests and the charity’s role in the partnership; and requiring an attachment to Form 990 showing all legal options involving agreements with insiders and conflicts of interest.

6. Treatment of private foundation administrative expenses
Under the proposal, private foundations that have administrative expenses — defined in the staff report as all expenses other than grants to charities, above 10 percent of the foundation’s total expenses — would be required to file additional supporting materials with the IRS.