Land Trust 990s and Audits

All nonprofit organizations are now required to file some version of Form 990 each year, and the new form includes additional questions about conservation easements. We encourage you to learn more about the latest rules and keep your books in order so we can avoid more audits of land trusts in the years ahead!

What Land Trusts Need to Know About the New Form 990

In August, the IRS released revised instructions for the redesigned Form 990 for the 2008 tax year, along with additional background documents to help nonprofits make the transition to the new form. Adjustments were made in several areas, including narrowing the definition of key employee and the standard for determining independence of board members. The new Schedule D contains revised reporting requirements for conservation easements.

All land trusts filing a Form 990 should read the current instructions to the form very carefully and consult with a knowledgeable attorney or financial advisor.

The New 990 at a Glance from K&L Gates

Forms and Highlights from the IRS

Links to Form 990, Schedules and Instructions
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?

All nonprofit organizations are now required to file some version of the Form 990 each year. For 2008, the filing requirements are:

Organizations with gross receipts of more than $1 million or total assets of more than $2.5 million must file the Form 990.
Organizations with gross receipts of less than $1 million and total assets less than $250,000, may file Form 990-EZ.
Organizations with annual gross receipts of $25,000 or less must file the e-Postcard (also called the Form 990-N). Read more about the e-Postcard here.

These thresholds will change for the 2009 tax year (returns filed in 2010). At that time, organizations with gross receipts of $500,000 or more or total assets of $1.25 million will be required to file the Form 990. Beginning with the 2010 tax year, the filing thresholds will be permanently set at $200,000 gross receipts and $500,000 total assets, and allowable receipts for the e-Postcard will increase to $50,000.

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

IRS Releases Suggested Governance Guidelines for 501(c)(3) Organizations

In February 2008, the Internal Revenue Service published a list of recommended governance policies and practices for tax-exempt organizations. These new guidelines are consistent with Land Trust Standards and Practices and reflect many of the themes stressed by the IRS over the past year and incorporated into the revised Form 990, including transparency, financial oversight and accountability. More

Land Trust Audits

Over the past year, the Internal Revenue Service has greatly increased it's audits of Nonprofit Organizations. Some of these audits have been of land trusts. If your organization is audited, we’d like to hear about it so we can highlight resources available to you.

Please email policy@lta.org. Thanks.

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