1. The new forms are much more complex than the old 990 forms. For example, more disclosure of compensation required. The hospital now must report on such things as “split-dollar life insurance coverage,” which could be a form of executive compensation, social club dues, sick pay paid out and even “taxable adoption systems,” for CEOs who adopt a child.
2. Filing them out is expensive and time-consuming. The time needed to fill out the full 990 form has been estimated at approximately 120 hours per facility. In addition, many hospitals send the forms to an outside accounting firm for review to ensure compliance with IRS guidelines.
3. Some hospitals haven’t filled them out yet. Many not-for-profit hospitals haven’t confronted the 990 form yet because it is in the midst of a three-year phase-in. For tax years 2008-2010, organizations with revenues under a rolling threshold can file the new Form 990-EZ rather than the 990 form. The revenue threshold falls from $1 million in 2008 to $500,000 in 2009, to $200,000 in 2010.
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