Nonprofit Accounting: Does My Nonprofit Need a 1023?

Here is a question we hear quite often:

“Our Nonprofit Made Changes to Its Programs, do we Need to Update Our Form 1023?”

Has your organization made significant changes to its original mission or program services and now you are wondering if you need to amend your Form 1023?

The answer is no. The IRS requires that any changes should be disclosed on your annual Form 990 filing. Two of the most common changes are changes to your mission and changes to your program services. Below are instructions on how to report these changes to the IRS:

• Changes in your mission – The instructions for the Form 990 states that the organization must report significant changes to its organizing documents by which it was created (articles of incorporation, bylaws, etc.). Report significant changes that weren’t reported on any prior Form 990, and that were made before the end of the tax year. These changes must be reported on page 6, Part VI, line 4 (mark this question “YES” and add an explanation on Schedule O).
• Changes in your program services – The instructions for the Form 990 state that an organization should mark “YES” to the question on page 2, Part III, line 3 if your organization made significant changes prior to the end of the tax year in how it conducts its program services to further its exempt purposes, or if the organization ceased conducting significant program services that had been conducted in a prior year. Describe these items on Schedule O (Form 990).

If your organization is still unsure about disclosing changes on your annual Form 990, our team can provide guidance as well.

For additional considerations, please reach out to Assurance Solutions Team Associate Director T.J. Sheldon or contact the Assurance Solutions Team at Mahoney.

Additional reading: Not-for-profit Solutions