Nonprofit Organization Tax Requirements

Asked September 13, 2016, 10:46 AM EDT

Our professional organization has paid big bucks to have a CPA complete taxes in the past using the 990-EZ form: Return of Organization Exempt from Income Tax. Our departmental accountant reviewed last year's return and said it looks simple enough that she could complete it. However, last year's CPA completed a Power of Attorney and Declaration of Representative in addition to the 990-EZ. Is that necessary? Can't the new accountant simply sign as paid preparer? The accountant can meet the requirements of Form 2848 regarding special rules and requirements for unenrolled return preparers. I realize this is a very detailed question, but thank you very much for any suggestions.

Cass County North Dakota

3 Responses

If an internal employee is preparing the return, then he/she is not a paid preparer and can leave the paid preparer section blank. See the instructions for the 990-EZ, specifically the last sentence:

Paid Preparer
Generally, anyone who is paid to prepare the return must sign
the return, list the preparer’s taxpayer identification number
(PTIN), and fill in the other blanks in the Paid Preparer Use Only
area. An employee of the filing organization is not a paid
preparer.

So as long as the paid preparer completes the information in that box, no additional power of attorney is necessary, correct?

I'm not sure about when the Power of Attorney is necessary. The person signing the return (not the paid preparer) is the person the IRS will contact with isues about the return.

As long as the person filling out the return is an employee, then you can leave the paid preparer section blank.

Likely, the person you hired had you fill out the PoA so that they could interact with the IRS on your behalf.