For the first time in over 25 years, the IRS is updating the exempt organization tax return, more commonly known as the 990, and they want your input.

"We're looking for comments on the redesigned form so we meet the needs of the organizations and public," said IRS spokesman, Eric Smith.

"We take all comments very seriously," he emphasized. "We're not just going through the motions. Anyone who is interested in this sector, anyone who is a 'stakeholder,' the IRS wants to hear from you."

"It's been over a quarter of a century since we've changed the form and certainly, exempt organizations have changed and have a different role in the 21st century," Smith continued. "We want real input from all interested parties," he explained. "We're looking for comments before we finalize the form and it's useful for us when the stakeholders of exempt organization (non profit) groups do this."

Senate Finance Committee hearings, a GAO report and investigative  journalists have found that some  groups, including the Red Cross, the United Way, the Nature Conservancy, the Smithsonian and the Shriners, may have committed tax fraud by hiding excessive salaries, sweetheart deals, lavish spending, executive mortgages and conflicts of interest.

"We need to ensure that charitable assets benefit those who need them most rather than those who need them least," said Senator Chuck Grassley, R-IA, former chairman of the Senate Finance Committee. "The 990 filing is often the public's only look at a non-profit's finances. They deserve accountability for the generous tax breaks the federal government offers to tax-exempt groups. The IRS's revisions are on the right track."

Current chairman of the Senate Finance Committee, Senator Max Baucus, D-MT, said that "This new form will help the public and the IRS assess whether tax-exempt organizations are staying true to the reasons they were granted exempt status in the first place. We must be assured that the public's donations are used appropriately. The Form 990 is as good as the information provided...to be beneficial the information must be complete and accurate. Unfortunately, that is often not the case."

"While we always hear that sunshine is the best disinfectant, sunshine can't do its work unless we open the blinds," both wrote in a letter to Henry Paulson, Secretary of the Department of Treasury. "The sooner we open those blinds, the better."

The IRS is redesigning the form based on three guiding principles:

1- To enhance transparency, so the IRS and the public are provided a realistic picture of the organization.

2- To promote compliance by accurately reflecting the organization's operations so the IRS may efficiently assess the risk of non compliance.

3- To minimize the burden on filing organizations.

According to a letter from Senators Grassley and Baucus to Henry Paulson, the Secretary of the Treasury, the new form is designed to make charities accountable by asking for more information in the areas of:

1. Executive compensation. "Some charities are as creative as for-profit entities in providing compensation – paying for housing, first-class travel, spousal travel, deferred compensation, inventive compensation and bonuses, fringe benefits, loans , dining and often entire life-styles."

2. Endowments. "The former Commissioner of the IRS spoke a few weeks ago, prior to his departure, that charities needed to provide charitable work commensurate with their resources...this is keeping with the commonsense view of the American taxpayer who subsidizes by billions of dollars a year the work of charities – that the point of giving is to help the community and those in need and not help a charity build an even bigger bankroll."

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