The New England Not-For-Profit Accounting Advisor

Regulatory reform rarely happens in sweeping changes. Most of the time regulatory updates are incremental, which makes monitoring the little notices from Congress or the IRS important for organizations of all sizes. Taken together, the little things can have a significant impact on your organization’s operations.

The IRS recently released the final 2013 Forms 990, 990-EZ and instructions. Although titled “Significant Changes,” it is a misnomer as the changes are not major. There were no changes to the form itself, though the IRS did make a number of revisions and clarifications to the instructions. We have entered the period of “IRS Fine Tuning.”

Since the major redesign to Form 990 in 2008, the IRS has made revisions to the Form each year to address changes made in the laws affecting tax-exempt organizations. While there were a number of changes to this year’s filing instructions, most involve fine-tuning and clarifying existing requirements rather than any large-scale changes or additions to the types of information required of 990 filers.

In an effort to make 403(b) plan sponsors aware of common mistakes made by not-for-profit entities and educational institutions administering such plans, in December 2013 the IRS updated two publications that relate to such plans. According to the IRS, “It is important to know the tax rules that apply to your 403(b) plan and to pay attention to the operation of your plan so you can maximize your employees’ retirement benefits, comply with the law, and avoid additional taxes and penalties.”

The publications – Publication 4482, 403(b) Tax-Sheltered Annuities for Participants and Publication 4483, 403(b) Tax-Sheltered Annuity Plans for Sponsors – list mistakes the agency commonly finds in these plans. In addition, 4482 also provides an overview of 403(b) plan features. The other publication offers information on several IRS products and services available to assist plan sponsors in keeping things running smoothly.