Your nonprofit’s executive director may oversee the preparation of Form 990, but does that automatically mean they’re authorized to sign it?
Not necessarily. The IRS has specific requirements for who can sign Form 990 on behalf of a nonprofit organization. Understanding those requirements and making sure the proper authority is documented can help your organization avoid complications when it’s time to file.
Who Is Authorized to Sign Form 990?
According to the IRS instructions for Form 990, the return must be signed by an authorized officer of the organization. This may include the president, vice president, treasurer, assistant treasurer, chief accounting officer, or any other officer duly authorized to sign.
The individual signing must have the appropriate authority at the time the return is filed. When an individual signs Form 990, they are not just submitting paperwork; they are signing under penalty of perjury. If someone signs without the legal authority to bind the corporation, the return can be deemed invalid by the IRS. If an invalid signature causes a consecutive 3-year gap in approved filings, the IRS will automatically revoke the organization’s tax-exempt status.
Can an Executive Director Sign Form 990?
Yes. An executive director can sign Form 990 if they are an authorized officer of the nonprofit organization.
However, holding the title of Executive Director does not automatically grant signing authority. The organization’s bylaws, governing documents, board resolutions, and applicable state law determine whether the executive director has legal authority to sign.
What’s the Difference Between a Principal Officer and an Officer?
The IRS uses both terms on Form 990, but they serve different purposes.
- Principal officer: The individual with primary responsibility for overseeing the nonprofit’s operations or carrying out decisions made by its governing body. This is often the executive director or CEO.
- Authorized signing officer: An individual who holds an eligible officer position and is legally authorized to sign the organization’s tax return.
The same person may hold these roles, but they don’t have to be. Being identified as the principal officer on Form 990 does not automatically establish signing authority.
The IRS further explains the distinction between these roles and how officers are reported on Form 990.
How Does a Nonprofit Establish Signing Authority?
A nonprofit’s signing authority is generally determined by its organizing documents, bylaws, board resolutions, and applicable state law.
If an Executive Director or another individual needs authority to sign Form 990, the organization should first review its existing documents to determine whether that authority has already been established.
If it isn’t, the board may need to formally appoint the individual to an appropriate officer position or adopt a resolution establishing the necessary authority, consistent with the organization’s governing documents and applicable law.
Any changes should be properly documented and retained with the organization’s governance records.
How Do You Transfer Form 990 Signing Authority?
Leadership transitions can create uncertainty. If your nonprofit appoints a new Executive Director, never assume the signing authority held by their predecessor transfers automatically.
For example, if your nonprofit appoints a new executive director, don’t assume that the authority previously held by their predecessor transfers automatically. Review your governing documents and any previous board resolutions to determine whether the new executive director is authorized to sign or whether additional action is needed.
When an authorized signer leaves or changes roles, your nonprofit should:
- Review existing authority. Determine whether signing authority is associated with an officer position or was specifically granted to an individual.
- Confirm the successor’s authority. If necessary, take formal board action to establish the new signer’s authority.
- Update governance records. Document any changes and make sure the individuals responsible for preparing Form 990 know who is authorized to sign.
Addressing these steps during a leadership transition can prevent confusion or delays when the next return is due.
Make Signature Authority Part of Your Nonprofit’s Filing Process
Confirming who can sign Form 990 should be part of your organization’s leadership transition procedures and annual filing preparations. Establishing clear processes now can help prevent questions or delays when it’s time to file.
Before Your Nonprofit Files Form 990
- Identify the individual who will sign the return.
- Confirm their officer status and signing authority.
- Review bylaws, organizing documents, or board resolutions as needed.
- If leadership has changed, verify that the new signer has the necessary authority.
- Make sure the authorized signer has reviewed the completed return before signing.
A little preparation can help your nonprofit maintain continuity, avoid last-minute filing complications, and meet its reporting responsibilities.
If you’re unsure whether your executive director or another member of your leadership team has the proper signing authority, Wegner CPAs’ nonprofit advisors can help you understand the requirements and prepare for your next Form 990 filing.
