Industry Insights

Form 990 Instructions Released

January 2016
Author:  Donna Larson

Donna Larson

Senior Manager

Tax

Health Care
Not-for-Profit & Government

One Metropolitan Square
211 N. Broadway, Suite 600
St. Louis, MO 63102-2733

St. Louis
314.231.5544

The IRS has released the 2015 instructions for Form 990, Return of Organization Exempt from Income Tax. This year’s instructions remained relatively consistent with the previous year.

Some changes to note:

  • Failure-to-file penalties – A penalty of $20 a day—not to exceed the lesser of $10,000 or 5 percent of the organization’s gross receipts for the year—is possible if returns are filed late, unless the organization can show reasonable cause for the late filing. The penalty for large organizations now is being adjusted for inflation annually. Organizations with annual gross receipts exceeding $1,015,500 (up from $1 million) are subject to a penalty of $100 per day with a maximum penalty for any one return of $50,500 (up from $50,000).
  • Private delivery services – The IRS-designated private delivery services list has been revised. DHL Express has been removed from the list, and additional FedEx and United Parcel Service options have been added. The ZIP code for the private delivery service address also has been changed.
  • Business activity codes – Form 990, Part VIII, Lines 2 and 11 require the use of business activity codes selected from a list included in the instructions. Several revisions have been made to the list; however, if a code isn’t listed for an activity, another code can be selected from the National Association of Insurance Commissioners’ website. The web link in the electronic version of the instructions has been updated.
  • Schedule H – Hospitals are instructed to include disclosures required under Revenue Procedure 2015-21 in Part VI of Schedule H. This procedure provides correction and disclosure procedures for hospital organizations to follow so that failing to meet the Internal Revenue Code Section 501(r) requirements will be excused in certain situations.
  • Schedule H, Part I, Line 7 – The instructions clarify that Columns E and F shouldn’t contain negative numbers. If a net community benefit expense is less than zero, enter zero.
  • Schedule H, Part V, Section B – Expanded guidance has been provided for many of the questions in the “Facility Policies and Practices” section, used to measure compliance with the regulations under
    Section 501(r).

The instructions can be found on the IRS website. For more information, contact your BKD advisor.

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