I appreciate what you are saying, Jason. Have you read the IRS instructions for filling out the 990 form? Because I actually took the time to do so. The instructions say, unequivocally, that these kinds of relationships need to be disclosed
I have at times in the past. So I looked at this again. Are you referring to this:
Part V-A — Current Officers, Directors, Trustees, and Key Employees
List each person who was a current officer, director, trustee, or key employee (defined below) of the organization or disregarded entity described in Regulations sections 301.7701-1 through 301.7701-3 at any time during the year even if they did not receive any compensation from the organization. If person is listed in Part V-A, then list all of that person's compensation from the organization in Part V-A, whether received as a current officer, as a former officer, or in another capacity (for example, independent contractor).
For purposes of reporting all amounts in columns (B) through (E) in Part V-A, either use the organizations tax year, or the calendar year ending within such tax year.
Enter a zero in columns (B), (C), (D), or (E) if no hours were entered in column (B) and no compensation, contributions, expenses, and other allowances were paid during the reporting period, or deferred for payment to a future reporting period.
Aid in the processing of the organization's return by grouping together, preferably at the end of its list, those who received no compensation. Be careful not to repeat names.
Give the preferred address at which officers, directors, etc., want the Internal Revenue Service to contact them.
Use an attachment if there are more persons to list in Part V-A.
Show all forms of cash and noncash compensation received by each listed officer, director, etc., whether paid currently or deferred.
If the organization pays any other person, such as a management services company, for the services provided by any of its officers, directors, trustees, or key employees, report the compensation and other items in Part V-A as if the organization had paid the officers, directors, etc., directly. Also see Ann. 2001-33, 2001-17 I.R.B. 1137.
A failure to fully complete Part V-A can subject both the organization and the individuals responsible for such failure to penalties for filing an incomplete return. See General Instruction K. In particular, entering the phrase on Part V-A, “Information available upon request,” or a similar phrase, is not acceptable.
The organization may also provide an attachment to explain the entire 2007 compensation package for any person listed in Part V-A.
Each person listed in Part V-A should report the listed compensation on his or her income tax return unless the Code specifically excludes any of the payments from income tax. See Pub. 525 for details.
Please note the bolded part about paying other person such as a management services company. Is such a case it is REQUIRED to be listed as if pad to the officer even though it was not. Seems like FARM paying BYU but listing Peterson as the receptient is the correct presentation. Are you ready to concede your error here?
So, while it may very well be accurate to say that CPAs take "'creative' liberty" with the facts, the truth is that this doesn't really fall into line with what the IRS expects. What CPAs do and what the IRS expects aren't necessarily the same thing.
Looks like the CPA did it the way he was supposed to.
