The IRS clarified recently that tax-exempt organizations can indicate they have adopted certain governance policies (such as a conflict of interest policy, whistleblower policy, or document retention policy) without having the full board of directors approve such policies. 

Instead, the IRS will allow a committee appointed by the board to approve the appropriate policies. IRS officials said this week that this change would be reflected in the 2011 instructions for filing Form 990. 

The IRS also issued a “Frequently Asked Questions” document this week that covers the governance section (Part VI) of Form 990. The FAQ also provides further clarification that the policies and practices asked about in Part VI are generally not required by tax law, but that the IRS “will use the information reported in Part VI, along with other information reported on the form, to assess noncompliance and the risk of noncompliance with federal tax law for individual organizations and across the broader exempt sector.” 

The FAQ also makes clear that the IRS is not requiring exempt organizations to provide a copy of their Form 990 to the governing board or requiring the governing board to sign off on the Form 990 prior to its filing.