The IRS recently released the 2013 Form 990, 990-EZ and related schedules and instructions. In addition, a summary of the significant changes has been posted to the IRS website.
Key Changes to the 2013 Form 990
- The instructions clarify that a short period return can only be filed electronically if either the “initial return” or the “final return” box is checked. Therefore, a short period return that is the result of a change in the organization’s accounting period must be paper-filed. In addition, the instructions clarify that any organization that changes its accounting period must report adjustment required by Section 481(a) in Parts VIII through XI and Schedule D, Parts XI and XII.
- The instructions clarify what documentation must be attached to Form 990 to support a name change, termination, merger, dissolution or revocation of exemption.
- The instructions for Part VII clarify reporting requirements for compensation to directors for non-director independent contractor services to the organization and related organizations.
- Appendix E to the Form 990 instructions has been updated to clarify that the public inspection and disclosure requirements apply to not only the original returns, but to amended returns as well.
There are many other changes to the 2013 forms and instructions. Click here for a complete list of the changes to the Form 990, Form 990-EZ and the related instructions and schedules.
Kevin Fontana is a manager in our tax department, Kevin has over ten years of accounting experience and oversees and coordinates tax compliance services for many of the firm’s corporate, partnership and individual clients. His privately owned clients span industries such as multi-location retail, distribution, manufacturing and real estate. In addition, Kevin oversees the tax compliance services for several non-profit clients, including independent schools, social clubs, historical societies and private foundations.
There are currently some changes in the works for the non-profit financial reporting model. The proposed changes, currently being developed by the Not-For-Profit Advisory Committee of the Financial Accounting Standards Board, aims at improving net asset classification requirements as well as disclosure information provided to the reader.
Recently, Marcus Harwood, Partner at BlumShapiro, provided some relevant information about these proposed changes and the current status of the initiative. Read Marcus’ article here.
Jeanne Pagnozzi is a manager in BlumShapiro’s Accounting and Auditing Department, based in Quincy, Massachusetts, Jeanne oversees attest and tax engagements and is responsible for engagement planning, staff supervision and coordination with client personnel to ensure successful completion of projects.
Following are five steps you and your finance team can take to better prepare for a financial statement audit. These steps will help decrease the audit burden on you and your team. After all, an audit should not be looked at as a burden. It should be viewed as a tool that ensures your financial operations are working properly and provides insight on best practices and how to improve.
- Be proactive. The auditors should reach out to you and provide you with a requested list of items they will need to perform the audit. However, you can reach out to them as well when you have time to work on their requests. This way you can work on the requests according to your schedule.
- Ask questions. If the auditor’s request list is not clear on a particular item, do not hesitate to ask the auditor questions before he/she comes out to perform fieldwork. This will cut down on the time spent pulling unnecessary information and last minute scrambles to pull requests together. In addition, in many cases, there is no need to re-create new schedules for the auditor’s purposes. Most times, auditors can utilize the schedules and reconciliations that you and your team prepare on a monthly basis.
- No surprises. Keep communication with the auditors open throughout the year. If you have any unusual transactions or changes in operations, it is best to keep the auditors in the loop and ask for their advice. This way you have the auditor’s approval of how to record the transaction and it will cut down on time spent at year end.
- Be prepared. Try to have all requests ready by the auditor’s deadlines and for when he/she comes out into the field. This will cut down on the questions and interruptions when in the field and the auditor will be able to work through the audit more quickly. This will also cut down on any extra audit costs. In addition to having all requests ready, make sure that all individuals that will be needed during the audit will be available for auditor’s questions. If key individuals are on vacation or not available when the auditors are in the field, it will slow down the audit process.
- View the auditors as a resource. As noted above, a lot of times auditors are viewed as being a burden. Try to change this mindset and instead utilize their knowledge and skill set to improve your financial operations. Ask auditors for advice on best practices, internal controls, benchmarking, etc. Ask them what changes they have seen within a particular industry. Auditors appreciate these types of questions and want to help.
Shannon Crowley is a manager in BlumShapiro’s Accounting and Auditing Department, based in Quincy, Massachusetts, Shannon oversees audit engagements and is responsible for engagement planning, staff supervision and coordination with client personnel to ensure successful completion of projects. Shannon has worked with clients in a variety of industries, including healthcare, higher education, non-profit, manufacturing and distribution.
BlumShapiro is the largest regional accounting, tax and business consulting firm based in New England. Our non-profit group includes over 80 professionals, led by 12 partners, principals and directors, dedicated to serving over 300 non-profit organizations. Additionally, our staff serve as active board members and leaders of over 170 organizations. This depth makes us one of the largest and most experienced non-profit accounting service providers in New England.
The idea for this blog stemmed from the fact that we answer many questions for our non-profit clients and through our work serving as board members, so we decided that it would be nice to share the information with everyone!
Our bloggers include non-profit audit, tax and consulting specialists which allows us to provide information on a wide array of topics, interests and concerns that will benefit your organization. Postings will include technical updates, our thoughts on recent trends and links to other resources. Examples of what you may find on this blog include answers to common Form 990 preparation questions, OPM cost standards, board governance and review of the changing IT landscape.
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