The blockchain technology has landed on mainstream news, and it won’t be long before it takes over the world. Blockchain has proven to be an efficient solution to many of the centralized systems’ problems we faced earlier with security breaches, lost data, etc. Blockchain is incredibly resilient. It’s decentralized nature allows for users to peer-to-peer transactions without any intermediaries. This factor opens up a gateway for the blockchain associations to diversify into multiple sectors, but with all the money flow, there is one significant accounting issue that all the blockchain associations must address- Form 990.
Form 990 is a tax document that is required to be filed with the Internal Revenue Service (IRS) for non-profit organizations. We hear this term everywhere in the world of tax return filing. However, not many reasons explain why the form 990 is essential for blockchain associations. Here, we dive deep into the top 5 reasons why submitting a 990 is vital for every blockchain association.
1. Tax-Exempt Status: The Form 990 is the primary tool used by the IRS to monitor the non-profit organizations’ activities. Filing the Form 990 ensures the tax-exempt status of the organization. In the case of a blockchain association that is not taking the tax-exempt status, the form 990 will give a comprehensive financial analysis of the non-profit.
2. Funding: Investor opinions on investing in a non-profit organization can be enhanced by a blockchain association filing the Form 990. The investor can look at the Form 990 and have an idea of the financial structure of the blockchain association they are investing in. Moreover, funders would feel more confident knowing the association is properly addressing their tax obligations.
3. Transparency: Transparency is the hot-button topic for businesses and associations. More and more investors are looking for transparency in a non-profit’s financials. A well-prepared Form 990 is a crucial marketing tool for blockchain associations to get funding from investors. And, don’t forget; no transparency equals no funding.
4. Public Perception: When the public thinks of transparent organizations, they most likely associate with the organizations that the IRS monitors. Filing a Form 990 will lead to a blockchain association’s transparency on their financials, and improved public perception can be expected.
5. Legal Obligations: Blockchain associations not filing the Form 990 face the risk of losing their tax-exempt status. Additionally, the IRS imposes penalties for non-filing or late filing.
In conclusion, Form 990 is essential for every blockchain association for many reasons. It is one of the most important tools for maintaining tax-exempt status, transparency to investors and public perception, and legal compliance. Filing a Form 990 is not only a method to comply with the law, but it also helps improve investor relations by demonstrating that your blockchain association is managing its finances prudently and with transparency. Remember, a Form 990 is the public record of your blockchain association’s financial condition, so prepare it well.
(Note: Do you have knowledge or insights to share? Unlock new opportunities and expand your reach by joining our authors team. Click Registration to join us and share your expertise with our readers.)
Speech tips:
Please note that any statements involving politics will not be approved.