DATELINE: April 28, 2008, Chicago
Our very own Jack B. Siegel submitted comments to the Internal Revenue Service today regarding the instructions it proposed on April 9, 2008 to the redesigned Form 990.
A significant portion of Siegel's comments focus on Line 1b and 2 to Part VI of the Core Form. These schedules focus on whether a director is independent (Line1b) and the relationships among directors, officers, key employees, and highest compensated individuals (Line 2). He also focused on Part IV of Schedule L, which focuses on transactions between the exempt organization and interested parties. Determining which of these relationships should be captured and what should be disclosed about them is a difficult call. The public, the media, and watchdog groups want more, more and more. But the desire for complete disclosure must be balanced against the cost and propriety of disclosing all possible relationships. Siegel offered the IRS 14 examples that address the Line 2 disclosures, suggesting that the IRS create exceptions for business relationships that deserve protection because of the sensitive information disclosed by the very existence of the relationship. He also suggested that the IRS except out consumer transactions.
Siegel's comments cover all aspect of the redesigned Form 990, except for the forms that apply to hospitals, schools, and tax-exempt bonds. In one section, Siegel expresses sympathy for some organizations that will be required to disclose first class and charter travel that is perfectly appropriate. He focuses on disaster-relief organizations, suggesting to the IRS that first class and charter travel be defined to exclude certain legitimate and recurring uses of this travel.
Siegel also reiterated his concerns over the formatting for the instructions, pointing out that the IRS can make the instructions user friendly if it takes the time to use headers and footers, innovative numbering systems, and relies on its Glossary, which by the way, is excellent. Siegel offered specific suggestions regarding format.
For a copy of Siegel's comments as submitted, click here
