The Internal Revenue Service has completed its revision of the 2008 Form 990 instructions* and posted them, along with three new background documents explaining the new form and instructions. The 2008 Form 990, released by the Internal Revenue Service in December 2007, is effective for 2008 tax years (for returns filed in 2009). The new background documents are described below.
The first of these documents, Background Paper – Summary of Form 990 Redesign Process, provides a 5-page explanation of the redesign process, from the release of the form’s discussion draft in June 2007 to today’s release of the new form’s instructions. Topics include reasons for the redesign, the public comment process, key changes from the old to the new form, and some next steps organizations and their preparers should consider as they get ready for the 2009 filing season. This document also summarizes the transition relief available to many smaller organizations for the 2008 and 2009 tax years.
The second document, Background Paper – Form 990, Moving from the Old to the New, lists and summarizes the parts and schedules of the new form, highlights which portions are new or significantly revised from the 2007 form, and compares material differences between the 2007 and the 2008 forms and instructions. This document contains a separate description of each part of the core form and each schedule, which explains the purpose, rationale and overview, key points, and effect on reporting relating to that part or schedule. The description of each schedule also includes an explanation of how an organization determines whether it must complete that schedule.
The third document, Background Paper – Changes to April Draft Instructions, provides an overview of significant changes to the April draft instructions and lists areas requiring further study for future years. The document also includes a detailed list of material changes to the April draft instructions, prepared in the order in which they appear in the instructions – first - the general instructions, and then the specific instructions for each part and schedule of the new form.
The issuance of the revised instructions and these accompanying background documents will help organizations and practitioners prepare to file the new 2008 Form 990 as the 2009 filing season approaches. The Internal Revenue Service intends to release draft instructions to the Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, in the next few weeks.
A Chronological History of materials relating to the 2008 Form 990 redesign process also is available.
*The instructions posted here are stamped “draft” as they are in regular text format rather than the standard triple-column format used for official and final IRS forms. The final version, expected to be released in late 2008, may contain additional wording and format changes; however, the IRS does not anticipate further significant changes in content.