Posted on April 5, 2009 by Jarad Hunter

2008 Form 990: Related Organizations

In the 2008 Form 990 instructions, the I.R.S. recommends a sequencing list for completing the core form and schedules.  Chronologically second on this list, after completing some basic information on the core form, the I.R.S. recommends determining the filing entity’s “related organizations”?

What is a related organization?

The I.R.S. definition, simplified, characterizes a related organization as an organization that stands in a parent, subsidiary, brother/sister, and/or supporting/supported relationship with the filing organization.  Disregarded entities (for example, single member LLCs) are treated as part of the filing organization and not as related organizations.

If you are not directly responsible for preparing Form 990, why might you care about this definition of related organization?

The related organization concept is significant to various disclosures in separate parts of the 2008 Form 990.  By way of example:

(1)  If you are a listed person in Part VII, Section A of the core form (i.e., director/trustee, officer, key employee, or highest compensated employee), compensation from a related organization may be reportable on the core form or Schedule J.  (We will save discussion on listed persons and compensation for another day.)

(2)  Transactions with related organizations are transparent under Schedule R of the 2008 Form 990, which, among other disclosures, generally requires identification of related organizations and disclosures on transactions with related organizations.

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Posted on March 28, 2009 by Jarad Hunter

2008 Form 990: Governance, Management, and Disclosure Policies

Legal and accounting departments for charitable and nonprofit organizations might be overwhelmed by the scope of the revised (2008) form 990. If you are like me, digesting information—one page at a time—is helpful in advancing permanent knowledge retention. Over the next few months, I will post on various sections of the 2008 form 990. In doing so, I make two promises to you:

  • Our focus will be on the 2008 form 990, not on prior form 990s, not on historical perspectives, and not on related areas of law or regulation.
  • Our focus will be on disclosures and requirements most pertinent to legal departments or counsel for section 501(c)(3) organizations.

This post is on written policy and documentation disclosures under 2008 form 990 part VI, section B related to Governance, Management, and Disclosure. In completing the form 990, you should also always review the instructions applicable to each section. In this section of the 2008 form 990, the I.R.S. inquires as to whether the organization has adopted written policies or documentation regarding:

  • Conflicts of Interest. 2008 form 990 asks whether at the end of the organization’s tax year, the organization had a written conflict of interest policy. If yes, the form 990 asks whether officers, directors or trustees, and key employees are required to disclose annually interests that could give rise to conflicts, and whether the organization regularly and consistently monitors and enforces compliance with the policy.
  • Whistleblowers. 2008 form 990 asks whether, as of the last day of the organization’s tax year, the organization had a written whistleblower policy.
  • Document Retention and Destruction. 2008 form 990 asks whether, as of the last day of the organization’s tax year, the organization had a written document retention and destruction policy.
  • Executive Compensation. 2008 form 990 asks whether the processes for determining certain executives' compensation include a review and approval by independent persons, comparability data, and contemporaneous substantiation (documentation and recordkeeping) of the deliberations and decision.
  • Joint Venture Arrangements. 2008 form 990 asks whether the organization invested in, contributed assets to, or participated in a joint venture arrangement or similar arrangement with a taxable entity during the year. If yes, the form 990 asks whether the organization has adopted a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and has taken steps to safeguard the organization’s exempt status with respect to such arrangements.
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Posted on August 29, 2008 by Robert Cochran

Voluntary Disclosure Survey Results

The American Health Lawyers Association recently released the results of its Voluntary Disclosure Survey.  The Survey provides data and observations regarding the experience of healthcare organizations with the government voluntary disclosure process.  There were 195 respondents.  Some of the important findings include:

  • 71% of respondents had been involved in a voluntary disclosure to the government.
  • 70% of the disclosures involved overpayment or billing/coding errors and 28% involved Kickback or Stark violations
  • 70% of the disclosures were made by outside counsel.
  • Most of the disclosures were made to OIG, followed by government contractors (e.g., fiscal intermediaries) and U.S. Attoney's Offices.
  • Almost half (49%) of the disclosures were resolved within a year of the disclosure.
  • 46% of the disclosures were resolved with a full overpayment refund; 12% resulted in a corporate integrity agreement.

The complete survey results are located here.

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