A Big Story Awaits You in the IRS Form 990

by March 16, 2020
The IRS Form 990 can lead you to a big story, provided you know where to look. (Image from Pixabay user Pexels)

IRS Form 990 can be a great place to find stories, provided you know what to look for. Yael Grauer wrote a three part series for the Reynolds Center on reading the form. These articles go into detail about what each section of the form contains. It’s a great starting point for understanding the 990.

According to the IRS website, “Tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations file Form 990 to provide the IRS with the information required by section 6033.” This means that not all nonprofit organizations have to file this form. In fact the majority of nonprofits, for example churches, do not file standard 990’s and their filings are not open to the public.

However, there are still thousands of nonprofits that file the 990 annually. For those that do, there is one line specifically that immediately signals a good story. In Part VI: Government, Management and Disclosure, Section A, Question 5 reads as follows: 

“Did the organization become aware during the year of a significant diversion of the organization’s assets?”

If the organization marks yes in response to Question 5, they are then required to explain their situation in Schedule O, which is a supplemental form to provide the IRS with “narrative information.” 

This gives a tenacious business reporter a glimpse into potential fraud or wrongdoing at the filing nonprofit organization. From there, it’s just a matter of reporting from this lead provided in the form.

Accessing 990 Forms

These 990 forms are usually easily accessible. Guidestar and ProPublica’s Nonprofit Explorer both have search functions to pull up organizations by state, name or type of organization. Some nonprofits also keep their 990 forms published on their website.

Finding specific organizations that have checked yes to this specific question may be easier said than done, but knowing that they have to explain themselves in Schedule O could lead to a big story.

IRS Website for Charities and Nonprofits