The American Institute of CPAs has sent comments to the Internal Revenue Service recommending changes in the redesigned form for tax-exempt nonprofit organizations.
While the AICPA acknowledged that the draft redesign of Form 990 contained many improvements to provide transparency of reporting, the institute also complained of the extra burden. "We believe the Form 990 and related instructions must be clear as to reporting requirements," said the letter from Naomi Horsager, chair of the AICPA's 990 Task Force. "However, this objective should be balanced by the fact that the administrative burdens of compliance must be reasonable."
The redesigned form includes an executive summary, which the AICPA agreed could be valuable. But the institute disagreed with some of the elements that needed to be included in the summary. "We are particularly troubled by the limited information on tax-exempt purpose, by the use of performance metrics that do not have significant industry-wide acceptance and the level of emphasis on compensation," wrote Ms. Horsager.
The letter criticized the compensation-reporting details required on the new form. "Reporting requirements should avoid unnecessarily inflating compensation amounts," wrote Ms. Horsager. She noted "the potential for negative inferences" and pointed out that many tax-exempt organizations "struggle to compete with the for-profit world for top talent."
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