Fall 2008 issue of Horizons

INDUSTRY ◆

HOSPITALITY AND GAMING

Private Country Clubs’ Compensation Not So Private! The IRS has published a fairly significant update to the Form 990 filing requirements that will impact the private club industry. The revisions have created a buzz throughout the private club industry and will take effect for filing years due in 2009. The updated filing guidance requires additional compensation disclosures for certain key employees, directors, officers and other highly compensated employees of private clubs. Clubs previously were required to report the names and salaries of officers, trustees, directors and certain key employees, but the updated Form 990 guidance will require the listing of the salaries and names of the club’s top five highest-paid employees (other than an officer, trustee, director or key employee). By Jim Mather, CPA

The updated guidance as published by the IRS within its draft instructions covering Part VII of the Form 990 requires the disclosure of compensation of the following officers, directors, trustees and employees of the organization: • Current officers, directors and trustees (no minimum salary – report all) • Current key employees (compensation exceeding $150,000) • Current five highest-compensated employees other than officers, directors, trustees or listed employees (only those that exceed $100,000) • Former officers, key employees and highest-paid compensated employees (compensation exceeding $100,000) • Former directors and trustees ($10,000 in the capacity as a former director or trustee) The definition of a “key employee” according to Form 990 is someone other than an officer, director or trustee who meets the following criteria: • Has responsibilities, powers or influence over the organization as a whole that is similar to those of an officer, director or trustee • Manages a segment or activity of the organization that represents 5 percent of the organization’s activities, assets, income or expenses of the organization

35 ◆ fall 2008 issue