What makes 990 preparation different from other information returns
Form 990 is a public document. unlike the 1120 or the 1040, it is available for public inspection on Nonprofit Explorer and in state charity databases. the board sees it, major donors read it, and grant-making organisations review it before funding decisions. the quality of a 990 is visible in a way that other returns aren’t — and that changes what reviewer-ready means.
beyond the public exposure, the 990 requires narrative content that most tax returns don’t. the program service descriptions in Part III, the mission statement, the governance policy disclosures — these aren’t numbers pulled from a trial balance. they require input from the organisation and careful drafting from the preparer. a 990 that’s mathematically correct but narratively vague is still a 990 that reflects poorly on your client.
our approach to 990 preparation treats the return as both a compliance document and a governance communication. the numbers are accurate. the narratives are clear and specific. the disclosures are complete. that’s what a nonprofit client’s CPA firm should be delivering — and it’s what we prepare.
Supporting schedules — what we prepare and why each matters
| Schedule | What it covers | When required |
|---|---|---|
| Schedule A | Public charity status and public support test. the most critical schedule for most 501(c)(3) organisations — the public support calculation determines whether the organisation maintains its public charity status. | Required for all 501(c)(3) public charities |
| Schedule B | Schedule of contributors. lists contributors who gave $5,000 or more during the year. filed with the IRS but generally not subject to public disclosure (state requirements vary). | Required when contributions exceed reporting thresholds |
| Schedule D | Supplemental financial statements covering donor-advised funds, conservation easements, endowment funds, facilities and equipment, investments, and escrow arrangements. | Required when any covered items exist |
| Schedule G | Supplemental information on fundraising or gaming activities. professional fundraiser details, fundraising event income and expenses, gaming activities. | Required when fundraising events or gaming exceed thresholds |
| Schedule J | Compensation information for officers, directors, and key employees. supplemental detail to Part VII including base compensation, bonus, deferred compensation, and benefits. | Required when total compensation to covered persons exceeds $150,000 |
| Schedule L | Transactions with interested persons. loans to officers, grants or other assistance to interested persons, business transactions with interested persons. | Required when covered transactions exist |
| Schedule O | Supplemental information. continuation sheets and explanations required throughout the return. a well-prepared Schedule O is a governance signal — vague or absent explanations attract scrutiny. | Required for most filers |
we determine which schedules apply based on the prior year return and the current year’s financial activity. schedules that were required in the prior year are flagged for review. new requirements triggered by current year activity are identified during the initial source document review.
Functional expense allocation — the number boards and auditors scrutinise most
the functional expense statement in Part IX is the section of the 990 that grant-makers, major donors, and state regulators examine most carefully. the split between program service expenses, management and general, and fundraising tells the story of how the organisation spends money — and a split that looks inconsistent or implausible attracts questions.
the allocation methodology is the foundation. salaries allocated by time study, occupancy costs allocated by headcount or square footage, shared costs allocated by function — each method needs to be documented, defensible, and consistent with prior year treatment. we document the methodology as part of the preparation, not as an afterthought. if the methodology has changed from the prior year, that change is noted for your CPA’s review and disclosed where required.
functional allocation requires input from the nonprofit: time estimates for staff whose time is split across functions, floor plan or headcount data for shared facilities, and any policy decisions the board has made about allocation methodology. we’ll send a single information request before preparation begins — not ad hoc questions throughout the process.
Software we work in
we work in whichever tax software your firm uses. no migration, no new platforms, no changes to your setup.
Drake Tax · Lacerte · ProConnect Tax Online · CCH Axcess · UltraTax CS · ATX Tax
you add us as a user in your existing software, following our dedicated staff model. we prepare the return in your environment. the file stays in your system throughout. your client’s data never leaves your firm’s control.
Our preparation process
Turnaround times
turnaround extends by one business day for each day source documents arrive after the agreed intake deadline. if state charitable registration filings are in scope, state-specific deadlines are confirmed at engagement start and tracked separately.
Quality control — what happens before the file reaches you
every 990 passes through three internal review stages before it leaves our team. the preparing accountant reviews against the prior year and the source documents. a senior accountant reviews the completed return including all schedules. a delivery check confirms completeness and formatting before the file is marked ready for your review.
the items we specifically verify on every 990 before delivery: public support test calculation and year-over-year trend, functional expense allocation methodology consistent with prior year or changed and disclosed, Part VII compensation verified against payroll source data, Schedule O explanations complete for all disclosures requiring supplemental information, and all required schedules attached.
if anything requires your professional judgement — a governance policy question, an unusual related-party transaction, a program description that needs your knowledge of the client’s activities — it is flagged in a preparer note with a specific explanation of what needs your attention and why. nothing is left for you to discover during your review.
