Tax Issues for Land Trusts

• The New 990
• Who Needs to File a 990
• Governance Guidelines

The New Form 990

In 2008, the IRS introduced a new Form 990 with many new questions and definitions.  The new Schedule D contains additional reporting requirements for conservation easements. All land trusts filing a full 900 should read the current instructions to the form very carefully and consult with a knowledgeable attorney or financial advisor.

Advice from the Land Trust Alliance and Partners

• Detailed Guide to the New Form 990
• Guidance on How to Account for Conservation Easements
• Highlights of Schedule D Conservation Easement Questions

• The New 990 at a Glance from K&L Gates
• Seven Things You Can Do to Prepare for the New 990 from K&L Gates
• Looking for advice on how to document conservation easement donations? Please visit the Conservation Donation Rules page.
  
  

Forms and Highlights from the IRS

• Links to Form 990, Schedules and Instructions
• NEW for 2011: Final Treasury Regulations for the Redesigned 990
• Overview of Form 990 Redesign For Tax Year 2008 (PDF, 43KB)
• Background Paper on the new Form 990 (PDF, 81KB)
• Schedule D, Supplemental Financial Statements – Highlights (PDF, 43KB)

Who Needs to File a 990

All nonprofit organizations are now required to file some version of the Form 990 each year. Starting with tax year 2009 (returns filed in 2010), an organization that has not filed for 3 consecutive years will automatically lose it's tax exempt status. Returns are due on the 15th of the fifth month following the end of your fiscal year--May 15 for calendar year filers.

For tax years 2010 and later, the filing requirements are:

• Organizations with gross receipts of more than $200,000 or total assets of more than $500,000 must file the Form 990.

• Organizations with gross receipts of less than $200,000 and total assets less than $500,000 million, may file Form 990-EZ.

• Organizations with annual gross receipts of $50,000 or less must file the e-Postcard (also called the Form 990-N).  Read more about the e-Postcard here.

For tax year 2009, only organizations with receipts under $25,000 could file the 990-N e-Postcard. Organizations with gross receipts over $500,000 or assets over $1.25 million were required to file the full Form 990. Learn more about filing requirements.

In addition to being required by the IRS, some state agencies that regulate charitable solicitations also require charities to file the full Form 990 as part of their annual report.

• Links to Form 990, Schedules and Instructions

• IRS Notice About Loss of Exemption for Failure to file

Governance Guidelines

Of course, the purpose of form 990 is to assess compliance with nonprofit law.  Those rules are discussed at great length in Nonprofit Law and Recordkeeping for Land Trusts, Volumes I & II, part of our Land Trust Standards and Practices Curriculum. This page is no substitute for those volumes or professional tax advice, but we've listed some new guidelines and helpful refreshers from the IRS:

• IRS Nonprofit Governance Guidelines -- In 2008, the IRS published a list of recommended governance policies and practices for tax-exempt organizations. These guidelines are consistent with Land Trust Standards and Practices and reflect themes stressed in the new 990 and recent audits, including transparency, financial oversight and accountability.
• Compliance Guide for 501(c)(3) Public Charities -- A concise pamphlet that summarizes the rules for maintaining your tax exempt status.
• Stay Exempt -- An IRS "micro-site" with virtual workshops and mini-courses to help nonprofit leaders maintain their organizations' tax exemptions.
• Publication 557 -- Recently revised, this is the IRS' detailed guide to securing and protecting your organization's tax exempt status.

If your organization is audited, please e-mail us so we can highlight resources available to you.