SOURCE: Goodwill Industries International

November 28, 2007 11:02 ET

Goodwill Urges IRS to Consider Alternatives to Proposed IRS Form 990 Reporting Requirements; Provides Sample Best Practices

ROCKVILLE, MD--(Marketwire - November 28, 2007) - Goodwill Industries International is urging the Internal Revenue Service to consider alternatives to proposed revisions to its Form 990, a key public disclosure document used by charitable organizations. In a letter to the Internal Revenue Service, Goodwill Industries International provides examples of practices used by local Goodwill agencies to evaluate and report the value of donations.

"Trying to track and value each separate item donated to us would be utterly impractical for Goodwill," says George W. Kessinger, President and CEO of Goodwill Industries International. "Collecting the information necessary for compliance shouldn't cost so much that it jeopardizes our ability to help people."

While Goodwill supports the IRS decision to redesign its Form 990 -- which after nearly 30 years of piecemeal updates is confusing and repetitive -- the organization believes that the current Schedule M of the new form would necessitate extensive capital expenditures and substantial ongoing personnel costs, diverting resources from Goodwill's charitable mission.

"There are a variety of approaches to formulating a good faith estimate that are sound," says Kessinger. "Reasonable estimates should be acceptable."

Among Goodwill's best practices:

--  Using the cost of obtaining, transporting, sorting and processing the
    goods for sale to develop an estimate of merchandise value.
--  Dividing the total sales of a particular category of merchandise such
    as clothing by the average sales price to estimate the quantity of donated

More than 60 percent of Goodwill's operating revenue is earned through the sale of donated goods; proceeds help finance job training programs and other support services that benefit hundreds of thousands of people each year. Under the current Schedule M of the redesigned Form 990, Goodwill organizations in the United States would be forced to adhere to numerous burdensome, costly reporting requirements, such as categorizing donations based on 22 or more different types of property and recording the exact quantity of items received during the year.

"Like Congress and the IRS, Goodwill is concerned that some donors may have tried to overvalue donations for tax purposes," says Kessinger. "Recent tightening of the tax laws has already addressed this problem." Goodwill Industries is urging the Internal Revenue Service to appropriately weigh the heavy burdens and likely small benefits of any new reporting requirements in a redesigned Form 990.

Contact Information

  • Contact
    Lauren Lawson
    Media Relations Specialist
    Goodwill Industries International
    Ph. (240) 333-5266