Can the annual Form 990 tax information return be reviewed by the members of our nonprofit corporation? We are having serious losses and can't get an answer as to why. The payroll is very high and when we ask the manager he says he is not allowed to disclose what a person makes. We just wanted to know what we are paying for positions.
Any member of the public, whether a voting member of the organization or not, has the right to see the annual Form 990 tax information return merely by asking for it. An organization that refuses to make it available as soon as it is filed can be penalized by the IRS for failing to do so.
Assuming you are a voting member, you probably have the right to review the books and records of the organization for proper corporate purposes, but whether you can review the salaries of individual employees may be a matter of state law. Ask for a compensation range by classification of employees that doesn’t reveal the salaries of specific individuals.
The Form 990, however, requires disclosure of compensation from the organization and any related organization for each officer, director, certain key employees with salaries in excess of $150,000 and anyone else who is earning more than $100,000 and is in the top five most highly compensated employees of the organization. The disclosure list includes the chief executive officer and the chief financial officer, no matter what they are called or what their level of the compensation. These publicly available figures may give you a greater insight into where your funds are going.
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