The IRS has released the final Form 990 for 2011, which includes significant changes in key areas for exempt organizations, including reportable compensation.
One of the areas with high interest will be the changes to Schedule J for compensation reporting.
Schedule J has been changed slightly from 2010′s version. Question 3 of Part I, inquiring as to the methods used to determine the compensation of the organization’s chief executive officer or executive director, adds the following instruction: Do not check any boxes for methods used by a related organization to establish compensation of the CEO/Executive Director.”
In addition, the third section of Schedule J has been expanded requiring more narrative explanations of the answers to the questions.
On the Form 990 itself, there are some subtle substantive changes in the questions about the organization’s governing body, which is Part A of Part VI. The 2011 form recognizes that there can be voting rights differences among members of the governing body and that there can be delegations of authority to a committee. Those situations are expressly to be described on Schedule O.
In Part VII of the core form, Reporting Compensation, the Form 990 for 2011 reverses the structure of the schedule for 2010 in that the organization is to note that a particular individual held multiple positions, other than that of current director/trustee and officer.
In Part IX, the Statement of Functional Expenses, there is a new cross-reference to Schedule O for explanations of answers in this part.
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Article written by The Ohio Society of CPAs
