Question: 990 Prior Year Error

I am in the process on completing the 990 EZ for my PTO. Last years "Net assets at end of year - line 21" does not agree to our cash balances at the end of that year. I suspect that they did not include a bank account that the PTO has but does not really use - our insurance policy requires us to hold $5k aside). I think it should be in there. Should I change the prior year number or just run a "plug" number through the current year activity to get us to the correct end of this year Net asset number?

Asked by Anonymous

Answers:

Community Advice

gjcoram writes:
There's a spot on the 990 for other changes to net assets, and you can put the $5k there -- anything you put there needs to be explained on Schedule O, and you can write an explanation of how the last year's crew didn't include this.

You could call the IRS non-profits division and ask them, at the risk of them telling you that you need to file amended returns to correct the problem.

Community Advice

mum24kids writes:
Your prior year number needs to agree with the prior year's return, so I definitely would not recommend changing the prior year number. Really, you should file a corrected return for last year. Of course, you run the risk that the same mistake has been made for a number of years. If that's the case, I might be inclined to plug it, making sure that you document what you did in case it ever gets questioned. But that answer sort of depends on how significant the $5k is to your financial statements as a whole.