Executive Compensation and the IRS:
Does Your Organization Meet the “Reasonable” Standard?
The revised Form 990 that is required to be used for the 2008 fiscal year (tax returns filed in 2009 and 2010) has been designed to be much more than a financial document. It is now the primary source of information about an organization’s governance, operations, and programs and is open to public inspection and therefore serves as a key tool by the IRS, state charity officials and the public. The expansion of the Form 990 is due in large part to the new governance (Board of Directors) objectives that are included for the first time.
Although the IRS does not require charities to have governance and management policies, the IRS will review an organization’s application for exemption and their annual Form 990’s to determine whether the organization has implemented policies relating to executive compensation, conflicts of interest, investments, fundraising, documenting governance decisions, document retention and destruction, and whistleblower claims.
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Paul E. Block C.P.A., / J.D. is a Manager at McCrory & McDowell, LLC specializing in the tax aspects of Not-For-Profit clients. Contact Paul at pblock@mccmcd.com.
Save the Date! 2009 Nonprofit Human Resources Conference
October 4 – 6, 2009: The 2009 Nonprofit Human Resources Conference brings together nonprofit human resources practitioners, executives, thought leaders and researchers to discuss human resources issues of critical importance to the nonprofit sector.
Our very own, Todd Owens and Michelle Pagano Heck will be leading a workshop.
Todd and Michelle will be discussing The Value of Interim Management: Lessons Learned with areas of focus being:
- HR Strategy Development
- HR Professional Development
- Workplace Culture
Click here for more information.