Department of the Treasury 2007 Internal Revenue Service

Instructions for Form 990

and Form 990-EZ

Return of Organization Exempt From Income Tax and ..

Short Form Return of Organization Exempt From Income Tax

Under Section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code

(except black lung benefit trust or private foundation)

Caution: Form 990-EZ is for use by organizations other than sponsoring organizations and controlling organizations defined in section

512(b)(13), with gross receipts of less than $100,000 and total assets of less than $250,000 at the end of the year.

Section references are to the Internal Revenue Code unless otherwise noted.

Contents Page Contents Page provide the IRS with the information

• What’s New . . . . . . . . . . . . . . . . . .1 S Organizations in Foreign required by section 6033.

• Purpose of Form . . . . . . . . . . . . . .1 Countries and U.S. An organization’s completed Form

• Phone Help . . . . . . . . . . . . . . . . . .1 Possessions . . . . . . . . . . . . . . . .20 990, Form 990-EZ, and the Form 990-T

• Email Subscription . . . . . . . . . . . . .1 T Public Interest Law Firms . . . . . . .20 of 501(c)(3) organizations is available

U Political Organizations . . . . . . . . .20 for public inspection as required by • Photographs of Missing

V section 6104. Schedule B (Form 990, Children . . . . . . . . . . . . . . . . . . . . .2 Information Regarding 990-EZ, or 990-PF), Schedule of • General Instructions . . . . . . . . . . . .2 Transfers Associated with Contributors, is open for public A Who Must File . . . . . . . . . . . . . . . .2 Personal Benefit Contracts . . . . . .20 inspection for section 527 organizations B Organizations Not Required W Prohibited Tax Shelter filing Form 990 or Form 990-EZ. For to File Form 990 or Form Transactions and Related other organizations that file Form 990 990-EZ . . . . . . . . . . . . . . . . . . . . .3 Disclosure Requirements . . . . . . .21 or Form 990-EZ, parts of Schedule B

C Exempt Organization X Requirements for a Properly may be open to public inspection. See

Reference Chart Completed Form 990 or . . . . . . . . . . . . . .4 the Instructions for Schedule B for more

D Forms and Publications . . . . . . . . .5 Form 990-EZ . . . . . . . . . . . . . . . .22 details.

E Use of Form 990, or Form • Specific Instructions for Form Some members of the public rely on 990 and Table of Contents 990-EZ, To Satisfy State Form 990, or Form 990-EZ, as the for These Specific Reporting Requirements . . . . . . . . .6 primary or sole source of information

F Other Forms as Partial Instructions . . . . . . . . . . . . . . . . .24 about a particular organization. How the

Substitutes for Form 990 or • Specific Instructions for Form public perceives an organization in

Form 990-EZ . . . . . . . . . . . . . . . . .7 990-EZ and Table of such cases may be determined by the

Contents for These Specific information presented on its return. G Accounting Periods and Instructions . . . . . . . . . . . . . . . . .54 Therefore, the return must be complete, Methods . . . . . . . . . . . . . . . . . . . .7 • Index . . . . . . . . . . . . . . . . . . . . . .66 accurate, and fully describe the H When, Where, and How to organization’s programs and File . . . . . . . . . . . . . . . . . . . . . . . .8 accomplishments. I Extension of Time To File . . . . . . . .8

What’s New Use Form 990 or Form 990-EZ, to J Amended Return/Final send a required election to the IRS, Return . . . . . . . . . . . . . . . . . . . . . .8 New annual electronic filing such as the election to capitalize costs K Failure to File Penalties . . . . . . . . .9 requirement for small tax-exempt under section 266.

L Contributions . . . . . . . . . . . . . . . . .9 organizations. Most small tax-exempt

M Public Inspection of organizations must now file new Form

Returns, etc. . . . . . . . . . . . . . . . .12 990-N, Electronic Notice (e-Postcard) Phone Help N Disclosures Regarding for Tax-Exempt Organizations Not If you have questions and/or need help Certain Information and Required to File Form 990 or 990-EZ. completing Form 990, or Form 990-EZ, Services Furnished See the IRS website at www.irs.gov . . . . . . . . . . .15 please call 1-877-829-5500. This O and click on the Charities & Non-Profits Disclosures Regarding toll-free telephone service is available tab for more information. Certain Transactions and Monday through Friday.

Relationships . . . . . . . . . . . . . . . .15

P Intermediate Sanction

Regulations — Excess Purpose of Form Email Subscription Benefit Transactions . . . . . . . . . .15 Form 990 and Form 990-EZ are used The IRS has established a new

Q Erroneous Backup by tax-exempt organizations, subscription-based email service for tax Withholding . . . . . . . . . . . . . . . . .20 nonexempt charitable trusts, and professionals and representatives of

R Group Return . . . . . . . . . . . . . . .20 section 527 political organizations to tax-exempt organizations. Subscribers

Cat. No. 22386X
will receive periodic updates from the 990-EZ. If the organization is a Form 990-EZ. However, section

IRS regarding exempt organization tax sponsoring organization, or a 501(c)(15) insurance companies are

law and regulations, available services, controlling organization within the also subject to separate tests to

and other information. To subscribe, meaning of section 512(b)(13), it must determine whether they qualify as

visit www.irs.gov/eo. file Form 990. However, if the tax-exempt for the tax year. The

organization is a supporting following tests use a specific definition

organization described in section for gross receipts defined, below only

Photographs of Missing 509(a)(3), it generally must file Form for purposes of the following tests.

990 (Form 990-EZ if applicable) even if Insurance companies that do not qualify Children its gross receipts are normally $25,000, as tax-exempt must file Form 1120-PC,

The Internal Revenue Service is a or less. Supporting organizations of U.S. Property and Casualty Insurance

proud partner with the National Center religious organizations need not file Company Income Tax Return, or Form

for Missing and Exploited Children. Form 990 (or Form 990-EZ) if their 1120, U.S. Corporation Income Tax

Photographs of missing children gross receipts are normally $5,000, or Return, as taxable entities. See Notice

selected by the Center may appear in less. See the gross receipts discussion 2006-42, which is on page 878 of the

in General Instruction B. Internal Revenue Bulletin 2006-19 at instructions on pages that would

otherwise be blank. You can help bring www.irs.gov/pub/irs-irbs/irb06-19.pdf. If the organization’s gross receipts these children home by looking at the during the year are less than $100,000 Tests for section 501(c)(15)

photographs and calling and its total assets at the end of the insurance companies to qualify as

1-800-THE-LOST (1-800-843-5678) if year are less than $250,000, it may file tax-exempt for the tax year. If any

you recognize a child. Form 990-EZ instead of Form 990. section 501(c)(15) insurance company

Even if the organization meets this test, (other than life insurance) normally has

it can still file Form 990. gross receipts of more than $25,000 for

General Instructions the tax year and meets both parts of Organizations required to file the following test, then the company The General Instructions apply to both Schedule A (Form 990 or 990-EZ), can file Form 990 (or Form 990-EZ, if Form 990 and Form 990-EZ. See also Organization Exempt Under Section applicable). the Specific Instructions for each of 501(c)(3), that do not meet the support

these forms. 1. The company’s gross receipts tests discussed in the instructions for

Part IV of that schedule can contact the must be equal to or less than $600,000, Certain Form 990 filers must file and IRS at the following address to electronically, see General 2. The company’s premiums must re-evaluate their determination-of-filing Instruction H for who must file be more than 50% of its gross receipts. CAUTION

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requirements. electronically.

If the company did not meet this test

Internal Revenue Service and the company is a mutual insurance A. Who Must File TE/GE EO Determinations company, then it must meet the

P.O. Box 2508 Alternate test to qualify to file Form 990 Filing Tests Cincinnati, OH 45201 (or Form 990-EZ, if applicable).

Organizations exempt from income tax Otherwise, the company must file Form Section 501(a), (e), (f), (k), and under Internal Revenue Code section 1120 or Form 1120-PC, as appropriate.

501(a), which includes sections 501(c), (n) Organizations Alternate test. If any section 501(e), 501(f), 501(k), 501(n), and Except for those types of organizations 501(c)(15) insurance company (other 4947(a)(1) must generally file Form 990 listed in General Instruction B, an than life insurance) is a mutual or Form 990-EZ based on their gross annual return on Form 990, or Form insurance company and it did not meet receipts for the tax year. (See General 990-EZ, is required from every the above test, then the company must Instruction B next for exceptions to the organization exempt from tax under meet both parts of the following filing requirement.) For this purpose, section 501(a), including foreign alternate test.

gross receipts is the organization’s total organizations and cooperative service 1. The company’s gross receipts revenues from all sources during its organizations described in sections must be equal to or less than $150,000, annual accounting period, without 501(e) and (f); child care organizations and subtracting any costs or expenses. described in section 501(k); and 2. The company’s premiums must charitable risk pools described in However, in addition to the be more than 35% of its gross receipts. section 501(n). above filing test, 501(c)(15) Section 501(c)(3), 501(e), (f), (k), If the company does not meet either CAUTION insurance companies are

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and (n) organizations must also attach test, then it must file Form 1120-PC or subject to a separate series of tests to a completed Schedule A (Form 990 or Form 1120 (if the company is not determine whether small insurance 990-EZ) to their Form 990 or Form entitled to insurance reserves) instead companies qualify as tax exempt under 990-EZ. of Form 990 or Form 990-EZ. section 501(c)(15) for the tax year.

These separate tests use a different For purposes of these The alternate test does not

definition for gross receipts only for instructions, the term section apply if any employee of the purposes of determining whether such 501(c)(3) includes organizations CAUTION mutual insurance company or a

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insurance companies qualify as tax exempt under sections 501(e), (f), (k), member of the employee’s family is an exempt. See Section 501(c)(15) and (n). employee of another company that is Organizations below for additional exempt under section 501(c)(15)(or information. Section 501(c)(15) would be exempt if this provision did

Organizations not apply). If the organization does not meet

any of the exceptions listed in General A section 501(c)(15) organization Gross receipts. To determine

Instruction B, and its annual gross applies the same gross receipts test as whether a section 501(c)(15)

receipts are normally more than other organizations to determine organization satisfies either of the

$25,000, it must file Form 990 or Form whether they must file the Form 990 or above tests, figure gross receipts by

-2- General Instructions for Form 990 and Form 990-EZ
adding (1) premiums (including an organization may continue to be Disregarded Entities deposits and assessments) without A disregarded entity, as described in deductible by the general public until

reduction for return premiums or Regulations sections 301.7701-1 the IRS publishes a notice to the

premiums paid for reinsurance; (2) through 301.7701-3, is treated as a contrary in the Internal Revenue gross investment income of a non-life branch or division of its parent Bulletin.

insurance company (as described in organization for federal tax purposes. section 834(b)); and (3) other items that Therefore, financial and other are included in the filer’s gross income information applicable to a disregarded under Subchapter B, Chapter 1, B. Organizations Not entity must be reported as the parent Subtitle A of the Code. This definition organization’s information. Required To File Form 990 or does not, however, include 990-EZ contributions to capital. For more Section 4947(a)(1) Nonexempt

information, see Notice 2006-42, which Charitable Trusts Organizations not required to is on page 878 of the Internal Revenue Any nonexempt charitable trust file Form 990, or Form 990-EZ Bulletin 2006-19 at www.irs.gov/pub/ (described in section 4947(a)(1)) not with the IRS may wish to use it

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irs-irbs/irb06-19.pdf. treated as a private foundation is also to satisfy state reporting requirements.

Premiums required to file Form 990, or Form For details, see General Instruction E. consist of all amounts 990-EZ, along with a completed received as a result of entering into an Schedule A (Form 990 or 990-EZ). See insurance contract. For information The following types of organizations the discussion in General Instruction D about the reporting of premiums, see exempt from tax under section 501(a) for exceptions to filing Form 1041, U.S. the instructions for Form 990 Part I, line (section 527 for political organizations) Income Tax Return for Estates and 2. do not have to file Form 990, or Form Trusts. 990-EZ, with the IRS. However, if the Anti-abuse rule. The anti-abuse If an Organization’s Exemption organization chooses to file a Form 990 rule, found in section 501(c)(15)(C), Application Is Pending or Form 990-EZ, it must also attach the explains how gross receipts (including schedules and statements described in premiums) from all members of a If the organization’s application for

exemption is pending, check the the instructions for these forms. In controlled group are aggregated in Application pending box in the heading addition, an organization not required to figuring the above tests. of the return and complete the return. file Form 990 or 990-EZ because it

meets exceptions 12, 15, or 16 must Political Organizations Organizations That Filed a file new Form 990-N, Electronic Notice Tax-exempt political organizations must Return in the Prior Year but Are (e-Postcard) for Tax-Exempt file Form 990 or Form 990-EZ (if Not Required To File in the Organizations Not Required to File applicable) unless the organization is Current Year Form 990 or 990-EZ. excepted from filing under Exemption

14 or 15 of General Instruction B. A Organizations that previously filed Form

990 or Form 990-EZ and meet 1. A church, an interchurch organization of qualified state or local political exemption 15 under General Instruction local units of a church, a convention or organization (defined below) must file B do not have to file a return. association of churches, an integrated Form 990 (not Form 990-EZ) only if it auxiliary of a church (such as a men’s or has gross receipts of $100,000 or Exempt organizations that filed Form women’s organization, religious school, more. 990, or Form 990-EZ, but are no longer mission society, or youth group). required to file because they meet a 2. A church-affiliated organization that is Qualified state or local political specific exemption (other than exclusively engaged in managing funds organizations. A qualified political exemption 15 in General Instruction B) or maintaining retirement programs and organization meets all of the following must advise their IRS area office so is described in Rev. Proc. 96-10, 1996-1 requirements. their filing status can be updated. C.B. 577.

1. The organization’s exempt 3. A school below college level affiliated Exempt organizations that are not functions are solely for the purpose of with a church or operated by a religious sure of their area office may call the influencing or attempting to influence order. IRS at 1-877-829-5500. Exempt the selection, nomination, election, or 4. A mission society sponsored by, or organizations that stop filing Form 990, appointment of any individual to any affiliated with, one or more churches or or Form 990-EZ, without notifying their church denominations, if more than half state or local public office or office in a area office may receive service center of the society’s activities are conducted state or local political organization. correspondence inquiring about their in, or directed at, persons in foreign 2. The organization is subject to returns. When responding to these countries. state law that requires it to report the inquiries, these organizations must give 5. An exclusively religious activity of any information that is similar to that the specific reason for not filing. religious order. required on Form 8872. 6. A state institution whose income is 3. The organization files the Failure To File and Its Effect on excluded from gross income under required reports with the state. Contributions section 115. 4. The state makes such reports Organizations that are eligible to 7. An organization described in section public and the organization makes them receive tax deductible contributions are 501(c)(1). A section 501(c)(1) open to public inspection in the same listed in Publication 78, Cumulative List organization is a corporation organized manner that organizations must make of Organizations described in Section under an Act of Congress that is: Form 8872 available for public 170(c) of the Internal Revenue Code of • An instrumentality of the United inspection. 1986. An organization may be removed States, and

from this listing if our records show that • Exempt from federal income taxes. For additional information, including it is required to file Form 990, or Form 8. A private foundation exempt under

the prohibition of involvement in the 990-EZ, but it does not file a return or section 501(c)(3) and described in

organization of a federal candidate or advises us that it is no longer required section 509(a). Use Form 990-PF,

office holder, see section 527(e)(5). to file. However, contributions to such Return of Private Foundation.

General Instructions for Form 990 and Form 990-EZ -3-
9. A black lung benefit trust described in Gross Receipts 3 tax years (including the year in which

section 501(c)(21). Use Form 990-BL, the return would be filed).

Information and Initial Excise Tax Return Do not use the definition of

for Black Lung Benefit Trusts and gross receipts described in $5,000 Gross Receipts Test Certain Related Persons. CAUTION General Instruction A, under

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10. A stock bonus, pension, or profit-sharing To determine if an organization’s gross Section 501(c)(15) Organizations to receipts are normally $5,000 or less, trust that qualifies under section 401. figure gross receipts. Use Form 5500, Annual Return/Report apply the following test. An

of Employee Benefit Plan. Gross receipts are the total amounts organization’s gross receipts normally

11. A religious or apostolic organization the organization received from all are considered to be $5,000 or less if

described in section 501(d). Use Form sources during its annual accounting the organization is:

1065, U.S. Return of Partnership period, without subtracting any costs or 1. Up to a year old and has Income. expenses. received, or donors have pledged to 12. A foreign organization whose annual Gross receipts when acting as an give, $7,500 or less during its first tax gross receipts from sources within the agent. If a local chapter of a section year; U.S. are normally $25,000 or less (Rev. 501(c)(8) fraternal organization collects 2. Between 1 and 3 years old and Proc. 94-17, 1994-1 C.B. 579). See the insurance premiums for its parent lodge averaged $6,000 or less in gross $25,000 Gross Receipts Test below. and merely sends those premiums to receipts during each of its first 2 tax 13. A governmental unit or affiliate of a the parent without asserting any right to years; or governmental unit described in Rev.

Proc. 95-48, 1995-2 C.B. 418. use the funds or otherwise deriving any 3. Three years old or more and

14. A political organization that is: benefit from collecting them, the local averaged $5,000 or less in gross

chapter does not include the premiums receipts for the immediately preceding • A state or local committee of a political in its gross receipts. The parent lodge 3 tax years (including the year in which party; reports them instead. The same the return would be filed). • A political committee of a state or local treatment applies in other situations in candidate; which one organization collects funds •

local officials;

A caucus or association of state or merely as an agent for another. C. Exempt Organization

• An authorized committee (as defined Figuring Gross Receipts Reference Chart

in section 301(6) of the Federal Election Figure gross receipts for Form 990 and

Campaign Act of 1971) of a candidate Form 990-EZ as follows. To determine how the

for federal office; instructions for Form 990 and Form 990. Gross receipts are the sum • A national committee (as defined in Form 990-EZ apply to the

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of lines 1e, 2, 3, 4, 5, 6a, 7, 8a (both section 301(14) of the Federal Election organization, you must know the Code columns), 9a, 10a, and 11 of Part I. Campaign Act of 1971) of a political section under which the organization is Gross receipts can also be figured by party; exempt. adding back the amounts on lines 6b, • A United States House of 8b (both columns), 9b, and 10b to the Type of I.R.C. Representatives or United States Senate total revenue reported on line 12. Organization Section

campaign committee of a political party Form 990-EZ. Gross receipts are the Corporations Organized Under Act of committee; sum of lines 1, 2, 3, 4, 5a, 6a, 7a, and 8 Congress ................... 501(c)(1)

• Required to report under the Federal of Part I. Gross receipts can also be Title Holding Corporations ......... 501(c)(2) Election Campaign Act of 1971 as a figured by adding back the amounts on political committee (as defined in section Charitable, Religious, Educational,

301(4) of such Act); or lines 5b, 6b, and 7b to the total revenue Scientific, etc., Organizations ...... 501(c)(3)

reported on line 9. • An organization described under Civic Leagues and Social Welfare

section 6033(g)(3)(G). Example. Organization M reported Organizations ................ 501(c)(4)

$50,000 as total revenue on line 9 of its 15. Except for supporting organizations Labor, Agricultural, and Horticultural

described in section 509(a)(3), an Form 990-EZ. M added back the costs Organizations ................ 501(c)(5)

organization whose gross receipts are and expenses it had deducted on lines Business Leagues, etc. ........... 501(c)(6) normally $25,000 or less. 5b ($2,000); 6b ($1,500); and 7b ($500)

Social and Recreation Clubs ........ 501(c)(7) 16. A section 509(a)(3) supporting to its total revenue of $50,000 and

organization of a religious organization, if determined that its gross receipts for Fraternal Beneficiary and Domestic 501(c)(8)

the supporting organization’s gross the tax year were $54,000. Fraternal Societies and Associations & (10)

receipts are normally $5,000 or less. Voluntary Employees’ Beneficiary $25,000 Gross Receipts Test Associations ................. 501(c)(9)

How to Determine If an To determine if an organization’s gross Teachers’ Retirement Fund Associations 501(c)(11) receipts are normally $25,000 or less, Organization’s Gross apply the following test. An Benevolent Life Insurance Associations,

Receipts are Normally Mutual Ditch or Irrigation Companies, organization’s gross receipts normally Mutual or Cooperative Telephone $25,000 (or $5,000) or Less are considered to be $25,000 or less if Companies, etc. .............. 501(c)(12) the organization is: To figure whether an organization has Cemetery Companies ............ 501(c)(13)

to file Form 990-EZ (or Form 990) apply 1. Up to a year old and has State Chartered Credit Unions, Mutual the $25,000 (or $5,000) gross receipts received, or donors have pledged to Reserve Funds ............... 501(c)(14) test (below) using the following give, $37,500 or less during its first tax Insurance Companies or Associations definition of gross receipts and year; Other Than Life ............... 501(c)(15) information in Figuring Gross Receipts 2. Between 1 and 3 years old and

averaged $30,000 or less in gross Cooperative Organizations To Finance below. Crop Operations .............. 501(c)(16) receipts during each of its first 2 tax

years; or Supplemental Unemployment Benefit

3. Three years old or more and Trusts ..................... 501(c)(17)

averaged $25,000 or less in gross Employee Funded Pension Trusts

receipts for the immediately preceding (created before 6/25/59) ......... 501(c)(18)

-4- General Instructions for Form 990 and Form 990-EZ
Organizations of Past or Present 501(c)(19) Other Forms That May Be including the definition of responsible

Members of the Armed Forces . . . . . & (23) Required persons.

Black Lung Benefit Trusts .......... 501(c)(21) Form 990-T. Exempt Organization Schedule A (Form 990 or 990-EZ). Business Income Tax Return (and Withdrawal Liability Payment Funds . . . 501(c)(22) Organization Exempt Under Section proxy tax under section 6033(e)). Filed Title Holding Corporations or Trusts . . . 501(c)(25) 501(c)(3) (Except Private Foundation) separately for organizations with gross and Section 501(e), 501(f), 501(k), State-Sponsored Organizations income of $1,000 or more from 501(n), or Section 4947(a)(1), Providing Health Coverage for business unrelated to the organization’s High-Risk Individuals ........... 501(c)(26) Nonexempt Charitable Trust. An exempt purpose. The Form 990-T is organization is not required to file State-Sponsored Workmen’s also filed to pay the section 6033(e)(2) Schedule A (Form 990 or 990-EZ) if its Compensation and Insurance and proxy tax. For Form 990, see line 85 Reinsurance Organizations gross receipts are normally $25,000 or ....... 501(c)(27) and its instructions; for Form 990-EZ, less. See the gross receipts discussion Religious and Apostolic Associations . . 501(d) see line 35 and its instructions. in General Instruction B.

Cooperative Hospital Service Form 990-W. Estimated Tax on

Organizations Schedule B (Form 990, 990-EZ, or ................ 501(e) Unrelated Business Taxable Income for 990-PF). Schedule of Contributors. Cooperative Service Organizations of Tax-Exempt Organizations. Schedule B (Form 990, 990-EZ, or Operating Educational Organizations 501(f) Form 1040. U.S. Individual Income 990-PF) provides contributor Child Care Organizations .......... 501(k) Tax Return. information for line 1 of Form 990 and

Charitable Risk Pools ............ 501(n) 990-EZ. All Form 990 and 990-EZ filers Form 1041. U.S. Income Tax Return

must complete and attach this schedule for Estates and Trusts. Required of Political Organizations . . . . . . . . . . . . 527 section 4947(a)(1) nonexempt to their return unless they meet an

exception, and check the box in item M charitable trusts that also file Form 990

of Form 990 (item H on Form 990-EZ). or Form 990-EZ. However, if such a D. Forms and Publications trust does not have any taxable income Forms W-2 and W-3. Wage and Tax under Subtitle A of the Code, it can file Internet. You can access the Statement; and Transmittal of Wage Form 990, or Form 990-EZ, and does IRS website 24 hours a day, 7 and Tax Statements. not have to file Form 1041 to meet its days a week, at www.irs.gov to: Form W-9. Request for Taxpayer section 6012 filing requirement. If this • Download forms, instructions, and Identification Number and Certification. condition is met, complete Form 990, or publications. Form 940. Employer’s Annual Federal Form 990-EZ, and do not file Form • Order IRS products online. 1041. Unemployment (FUTA) Tax Return. • Research your tax questions online. A section 4947(a)(1) nonexempt • Search publications online by topic or Form 941. Employer’s QUARTERLY charitable trust that normally has gross keyword. Federal Tax Return. Used to report receipts of not more than $25,000 (see • View Internal Revenue Bulletins social security, Medicare, and income the gross receipts discussion in (IRBs) published in the last few years. taxes withheld by an employer and General Instruction B) and has no • Sign up to receive local and national social security and Medicare taxes paid taxable income under Subtitle A must tax news by email. by an employer. complete line 92 and the signature

CD for tax products. You can Form 943. Employer’s Annual Federal block on page 9 of the Form 990. On Tax Return for Agricultural Employees. order Publication 1796, IRS Tax the Form 990-EZ, complete line 43 and

Products CD, and obtain: Trust Fund Recovery Penalty. If the signature block on page 3 of the

• A CD that is released twice so you certain excise, income, social security, return. In addition, complete only the

have the latest products. The first and Medicare taxes that must be following items in the heading of Form

release ships in late December and the collected or withheld are not collected 990 or Form 990-EZ:

final release ships in late February. or withheld, or these taxes are not paid • Current-year forms, instructions, and to the IRS, a Trust Fund Recovery Item

A Tax year (fiscal year or short period, if publications. Penalty may apply. The Trust Fund applicable) • Prior-year forms, instructions, and Recovery Penalty may be imposed on B Applicable checkboxes publications. all persons (including volunteers) who C Name and address • Tax Map: an electronic research tool the IRS determines were responsible D Employer identification number (EIN)

and finding aid. for collecting, accounting for, and J Section 4947(a)(1) nonexempt charitable

• Tax law frequently asked questions trust box paying over these taxes, and who acted (FAQs). willfully in not doing so. Form 1096. Annual Summary and • Tax Topics from the IRS telephone This penalty does not apply to Transmittal of U.S. Information Returns. response system.

• Fill-in, print, and save features for volunteer unpaid members of any board Form 1098 series. Information

of trustees or directors of a tax-exempt most tax forms. returns to report mortgage interest,

• Internal Revenue Bulletins. organization, if these members are student loan interest, qualified tuition

• Toll-free and email technical support. solely serving in an honorary capacity, and related expenses received, and a do not participate in the day-to-day or contribution of a qualified vehicle that Buy the CD from National Technical financial activities of the organization, has a claimed value of more than $500. Information Service (NTIS) at www.irs. and do not have actual knowledge of Form 1099 series. Information returns gov/cdorders for $35 (no handling fee) the failure to collect, account for, and to report acquisitions or abandonments or call 1-877-233-6767 toll free to buy pay over these taxes. However, the of secured property, proceeds from the CD for $35 (plus a $5 handling fee). preceding sentence does not apply if it broker and barter exchange results in no person being liable for the By phone and in person. You can transactions, cancellation of debt, penalty. order forms and publications by calling dividends and distributions, certain

1-800-TAX-FORM (1-800-829-3676). The penalty is equal to the unpaid government and state qualified tuition

You can also get most forms and trust fund tax. See Pub. 15 (Circular E), program payments, taxable

publications at your local IRS office. Employer’s Tax Guide, for more details, distributions from cooperatives, interest

General Instructions for Form 990 and Form 990-EZ -5-
payments, payments of long-term care However, if the organization receives 990-EZ, or 990-PF) in place of all or

and accelerated death benefits, a charitable cash contribution in excess part of their own financial report forms.

miscellaneous income payments, of $10,000, it is not subject to the The substitution applies primarily to

distributions from an HSA, Archer MSA reporting requirement since the funds section 501(c)(3) organizations, but

or Medicare Advantage MSA, original were not received in the course of a some of the other types of section

issue discount, distributions from trade or business. 501(c) organizations are also affected.

pensions, annuities, retirement or Form 8822. Change of Address. Used If the organization uses Form 990, or profit-sharing plans, IRAs, insurance to notify the IRS of a change in mailing Form 990-EZ, to satisfy state or local contracts, etc., and proceeds from real address that occurs after the return is filing requirements, such as those estate transactions. Also, use certain of filed. under state charitable solicitation acts, these returns to report amounts that Form 8868. Application for Extension note the following discussions. were received as a nominee on behalf of Time To File an Exempt Organization of another person. Determine State Filing Return.

Form 1120-POL. U.S. Income Tax Requirements Form 8870. Information Return for Return for Certain Political The organization may consult the Transfers Associated With Certain Organizations. appropriate officials of all states and Personal Benefit Contracts. Used to

Form 1128. Application To Adopt, other jurisdictions in which it does identify those personal benefit contracts Change, or Retain a Tax Year. business to determine their specific for which funds were transferred to the filing requirements. Doing business in a Form 3115. Application for Change in organization, directly or indirectly, as jurisdiction may include any of the Accounting Method. well as the transferors for, and following: (a) soliciting contributions or beneficiaries of, those contracts. Form 4506. Request for Copy of Tax grants by mail or otherwise from Return. Form 8871. Political Organization individuals, businesses, or other Notice of Section 527 Status. Form 4506-A. Request for Public charitable organizations; (b) conducting

Inspection or Copy of Exempt or Form 8872. Political Organization programs; (c) having employees within

Political Organization IRS Form. Report of Contributions and that jurisdiction; (d) maintaining a

Expenditures. checking account; or (e) owning or Form 4562. Depreciation and Form 8886-T. Disclosure by renting property there. Amortization.

Form 4720. Return of Certain Excise Tax-Exempt Entity Regarding Monetary Tests May Differ Prohibited Tax Shelter Transaction. Taxes Under Chapters 41 and 42 of the Some or all of the dollar limitations

Internal Revenue Code. Form 8899. Notice of Income from applicable to Form 990, or Form Donated Intellectual Property. Used to Form 5500. Annual Return/Report of 990-EZ, when filed with the IRS may report net income from qualified Employee Benefit Plan. Employers who not apply when using Form 990, or intellectual property to the IRS and the maintain pension, profit-sharing, or Form 990-EZ, in place of state or local donor. other funded deferred compensation report forms. Examples of the IRS

plans are generally required to file the Form 8921. Applicable Insurance dollar limitations that do not meet some

Form 5500. This requirement applies Contracts Information Return. state requirements are the $25,000

whether or not the plan is qualified Form TD F 90-22.1. Report of gross receipts minimum that creates an

under the Internal Revenue Code and Foreign Bank and Financial Accounts. obligation to file with the IRS (see the

whether or not a deduction is claimed gross receipts discussion in General Helpful Publications for the current tax year. Instruction B) and the $50,000

Publication 463. Travel, minimum for listing professional fees in Form 5768. Election/Revocation of Entertainment, Gift, and Car Expenses. Part II-A of Schedule A (Form 990 or Election by an Eligible Section 990-EZ). 501(c)(3) Organization To Make Publication 525. Taxable and

Expenditures To Influence Legislation. Nontaxable Income. Additional Information May Be

Form 8282. Donee Information Publication 526. Charitable Required

Return. Required of the donee of Contributions. State or local filing requirements may charitable deduction property who sells, Publication 538. Accounting Periods require the organization to attach to exchanges, or otherwise disposes of and Methods. Form 990, or Form 990-EZ, one or donated property within 3 years after Publication 598. Tax on Unrelated more of the following: (a) additional receiving it. The form is also required of Business Income of Exempt financial statements, such as a any successor donee who disposes of Organizations. complete analysis of functional charitable deduction property within 3 expenses or a statement of changes in Publication 910. IRS Guide to Free years after the date that the donor gave net assets; (b) notes to financial Tax Services. the property to the original donee. It statements; (c) additional financial does not matter who gave the property Publication 946. How To Depreciate schedules; (d) a report on the financial Property. to the successor donee. It may have statements by an independent been the original donee or another Publication 1771. Charitable accountant; and (e) answers to successor donee. Contributions—Substantiation and additional questions and other Disclosure Requirements. Form 8283. Noncash Charitable information. Each jurisdiction may

Contributions. require the additional material to be

presented on forms they provide. The Form 8300. Report of Cash Payments E. Use of Form 990, or Form Over $10,000 Received in a Trade or additional information does not have to

Business. Used to report cash amounts 990-EZ, To Satisfy State be submitted with the Form 990, or

Reporting Requirements Form 990-EZ, filed with the IRS. in excess of $10,000 that were received

in a single transaction (or in two or Some states and local government Even if the Form 990, or Form

more related transactions) in the course units will accept a copy of Form 990, or 990-EZ, that the organization files with

of a trade or business (as defined in Form 990-EZ, Schedule A (Form 990 or the IRS is accepted by the IRS as

section 162). 990-EZ), and Schedule B (Form 990, complete, a copy of the same return

-6- General Instructions for Form 990 and Form 990-EZ
filed with a state will not fully satisfy that 990-EZ, for which other forms can be Public Inspection state’s filing requirement if required substituted are the same. These areas The Form 990, or Form 990-EZ, information is not provided, including are: information made available for public any of the additional information inspection by the IRS may differ from Form 990. discussed above, or if the state that made available by the states. See • Lines 13 through 15 of Part I (but determines that the form was not the discussion of Schedule B (Form complete lines 16 through 21); completed by following the applicable 990, 990-EZ, or 990-PF) in General • Part II; and Form 990, or Form 990-EZ, instructions Instruction L. • Part IV (but complete lines 59, 66, or supplemental state instructions. If so, and 74, columns (A) and (B)). the organization may be asked to Form 990-EZ. provide the missing information or to F. Other Forms as Partial • Lines 10 through 16 of Part I (but submit an amended return. Substitutes for Form 990 or complete lines 17 through 21).

Use Of Audit Guides May Be Form 990-EZ • Part II (but complete lines 25 through

Required Except as provided below, the Internal 27, columns (A) and (B)).

To ensure that all organizations report Revenue Service will not accept any If an organization substitutes Form form as a substitute for one or more LM-2 or LM-3 for any of the Form 990, similar transactions uniformly, many parts of Form 990 or Form 990-EZ. or Form 990-EZ, parts or line items states require that contributions, gifts, mentioned above, it must attach a grants, etc., and functional expenses Labor Organizations (Section reconciliation sheet to show the be reported according to the AICPA 501(c)(5)) relationship between the amounts on industry audit and accounting guide,

Not-for-Profit Organizations (New York, A labor organization that files Form the DOL forms and the amounts on

NY, AICPA, 2003), supplemented by LM-2, Labor Organization Annual Form 990 or Form 990-EZ. This is

Standards of Accounting and Financial Report, or the shorter Form LM-3, particularly true of the relationship of

Reporting for Voluntary Health and Labor Organization Annual Report, with disbursements shown on the DOL

the U.S. Department of Labor (DOL) Welfare Organizations (Washington, forms and the total expenses on line

DC, National Health Council, Inc., 1998, can attach a copy of the completed 17, Part I, of both Form 990 and Form DOL form to Form 990, or Form 990-EZ. The organization must make 4th edition). 990-EZ, to provide some of the this reconciliation because the cash

Donated Services and Facilities information required by Form 990 or disbursements section of the DOL

Form 990-EZ. This substitution is not forms includes nonexpense items. If the Even though reporting donated services permitted if the organization files a DOL organization substitutes Form LM-2, be and facilities as items of revenue and report that consolidates its financial sure to complete its separate schedule expense is called for in certain statements with those of one or more of expenses. circumstances by the two publications separate subsidiary organizations. named above, many states and the IRS

do not permit the inclusion of those Employee Benefit Plans G. Accounting Periods and amounts in Parts I and II of Form 990 (Section 501(c)(9), (17), or (18)) Methods or Part I of Form 990-EZ. The optional An employee benefit plan may be able reporting of donated services and to substitute Form 5500 for part of For more information about facilities is discussed in the instructions Form 990 or Form 990-EZ. The these topics, see Pub. 538. for Part III for both Form 990 and Form substitution can be made if the

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990-EZ. organization filing Form 990, or Form

Amended Returns 990-EZ, and the plan filing Form 5500, Accounting Periods meet all the following tests: If the organization submits Calendar year. Use the 2007 Form 1. The Form 990, or Form 990-EZ, supplemental information or files an 990, or Form 990-EZ, to report on the filer is organized under section amended Form 990, or Form 990-EZ, 2007 calendar year accounting period. 501(c)(9), (17), or (18); with the IRS, it must also send a copy A calendar year accounting period 2. The Form 990, or Form 990-EZ, of the information or amended return to begins on January 1 and ends on filer and Form 5500 filer are identical any state with which it filed a copy of December 31. for financial reporting purposes and Form 990, or Form 990-EZ, originally to Fiscal year. If the organization has have identical receipts, disbursements, meet that state’s filing requirement. established a fiscal year accounting assets, liabilities, and equity accounts; period, use the 2007 Form 990, or If a state requires the organization to 3. The employee benefit plan does Form 990-EZ, to report on the file an amended Form 990, or Form not include more than one section organization’s fiscal year that began in 990-EZ, to correct conflicts with Form 501(c) organization, and the section 2007 and ended 12 months later. A 990, or Form 990-EZ, instructions, it 501(c) organization is not a part of

more than one employee benefit plan; fiscal year accounting period normally must also file an amended return with coincides with the natural operating the IRS. 4. The organization’s accounting cycle of the organization. Be certain to year and the employee plan year are Method of Accounting indicate in the heading of Form 990, or the same. If they are not, the Form 990-EZ, the date the Most states require that all amounts be organization may want to change its organization’s fiscal year began in 2007 reported based on the accrual method accounting year, as explained in

General Instruction G, and the date the fiscal year ended in of accounting. See also General so it will coincide

with the plan year. 2008. Instruction G.

Short period. A short accounting

Time For Filing May Differ Allowable Substitution Areas period is a period of less than 12

months. The deadline for filing Form 990, or Whether an organization files Form

Form 990-EZ, with the IRS differs from 990, or Form 990-EZ, for a labor If the Form 990, or Form 990-EZ, for

the time for filing reports with some organization or for an employee benefit the short year is not available until the

states. plan, the areas of Form 990, or Form subsequent year, use the prior year

General Instructions for Form 990 and Form 990-EZ -7-
Form 990, or Form 990-EZ, to meet the State reporting. If the organization • DHL Express (DHL): DHL “Same

organization’s filing requirement. Cross prepares Form 990, or Form 990-EZ, Day” Service, DHL Next Day 10:30 AM,

out the year on the form and show the for state reporting purposes, it may file DHL Next Day 12:00 PM, DHL Next

short year. an identical return with the IRS even Day 3:00 PM, and DHL 2nd Day

Accounting period change. though the return does not agree with Service. If the

the books of account, unless the way • Federal Express (FedEx): FedEx organization changes its accounting one or more items are reported on the Priority Overnight, FedEx Standard period, it must file a return on Form state return conflicts with the Overnight, FedEx 2Day, FedEx 990, or Form 990-EZ, for the short instructions for preparing Form 990, or International Priority, FedEx period resulting from the change. Write Form 990-EZ, for filing with the IRS. International First. “Change of Accounting Period” at the

top of this short-period return. Example 1. The organization • United Parcel Service (UPS): UPS

maintains its books on the cash Next Day Air, UPS Next Day Air Saver, If the organization changed its UPS 2nd Day Air, UPS 2nd Day Air receipts and disbursements method of accounting period within the accounting but prepares a state return A.M., UPS Worldwide Express Plus, 10-calendar-year period that includes based on the accrual method. It could and UPS Worldwide Express. the beginning of the short period, and it use that return for reporting to the IRS. The private delivery service can tell had a Form 990, or Form 990-EZ, filing Example 2. A state reporting you how to get written proof of the requirement at any time during that mailing date. 10-year period, it must also attach a requirement requires the organization

Form 1128 to the short-period return. to report certain revenue, expense, or Electronic Filing See Rev. Proc. 85-58, 1985-2 C.B. balance sheet items differently from the The organization can file Form 990, or 740. way it normally accounts for them on its Form 990-EZ, and related forms, books. A Form 990, or Form 990-EZ, Group return. When affiliated schedules, and attachments prepared for that state is acceptable for organizations authorize their central electronically. However, if an the IRS reporting purposes if the state organization to file a group return for organization files at least 250 returns reporting requirement does not conflict them, the accounting period of the during the calendar year and has total with the Form 990, or Form 990-EZ, affiliated organizations and the central assets of $10 million or more at the end instructions. organization must be the same. See of the tax year, it must file Form 990 General Instruction R. An organization should keep a electronically. reconciliation of any differences Accounting Methods To determine if the organization between its books of account and the meets the $10 million asset test, use Unless instructed otherwise, the Form 990, or Form 990-EZ, that is filed. the amount that will be entered on line organization should generally use the Most states that accept Form 990, or 59 (total assets), column (B). same accounting method on the return Form 990-EZ, in place of their own to figure revenue and expenses as it If an organization is required to file a forms require that all amounts be regularly uses to keep its books and return electronically but does not, the reported based on the accrual method organization is considered to have not records. To be acceptable for Form of accounting. For further information, 990, or Form 990-EZ, reporting filed its return. See Temporary see General Instruction E.

purposes, however, the method of Regulations section 301.6033-4T for

accounting used must clearly reflect more information.

income. H. When, Where, and How To For additional information on the

Generally, the organization must file File electronic filing requirement, visit www.

Form 3115 to change its accounting irs.gov/efile. File Form 990, or Form 990-EZ, by the

method. Notice 96-30, 1996-1 C.B. 378, 15th day of the 5th month after the The IRS may waive the provides relief from filing Form 3115 to organization’s accounting period ends. requirements to file section 501(c) organizations that If the regular due date falls on a electronically in cases of undue

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change their method of accounting to Saturday, Sunday, or legal holiday, file hardship. For information on filing a comply with the provisions of SFAS on the next business day. A business waiver, see Notice 2005-88, which is on 116, Accounting for Contributions day is any day that is not a Saturday, page 1060 of the Internal Revenue Received and Contributions Made. In Sunday, or legal holiday. Bulletin 2005-48 at www.irs.gov/pub/ SFAS 116, the Financial Accounting If the organization is liquidated, irs-irbs/irb05-48.pdf. Standards Board revised certain dissolved, or terminated, file the return generally accepted accounting by the 15th day of the 5th month after principles relating to contributions I. Extension of Time To File the liquidation, dissolution, or received and contributions awarded by termination. Use Form 8868 to request an automatic not-for-profit organizations. 3-month extension of time to file. Use If the return is not filed by the due A not-for-profit organization that Form 8868 also to apply for an date (including any extension granted), changes its method of accounting for additional (not automatic) 3-month attach a statement giving the reasons federal income tax purposes to conform extension if the original 3 months was for not filing on time. Send the return to to the method provided in SFAS 116 not enough time. To obtain this the:

must report any adjustment required by additional extension of time to file, the

section 481(a) on line 20 of Form 990, Department of the Treasury organization must show reasonable

or Form 990-EZ, as a net asset Internal Revenue Service Center cause for the additional time requested.

adjustment made during the year the Ogden, UT 84201-0027 See the Instructions for Form 8868.

change is made. The adjustment must Private delivery services. The

be identified as the effect of changing organization can use certain private J. Amended Return/Final to the method provided in SFAS 116. delivery services designated by the IRS

The beginning of year statement of to meet the “timely mailing as timely Return

financial position (balance sheet) filing/paying” rule for tax returns and To change the organization’s return for

should not be restated to reflect any payments. These private delivery any year, file a new return including any

prior period adjustments. services include only the following. required attachments. Use the revision

-8- General Instructions for Form 990 and Form 990-EZ
of Form 990, or Form 990-EZ, return contains incorrect information. organization that is not eligible to

applicable to the year being amended. For example, an organization that receive contributions deductible as

The amended return must provide all reports contributions net of related charitable contributions for federal

the information called for by the form fundraising expenses may be subject to income tax purposes must include an

and instructions, not just the new or this penalty. explicit statement that contributions or

corrected information. Check the gifts to it are not deductible as Against Responsible Person(s) Amended return box in the heading of charitable contributions. The statement

the return. If the organization does not file a must be in an easily recognizable complete return or does not furnish format whether the solicitation is made The organization may file an correct information, the IRS will send in written or printed form, by television amended return at any time to change the organization a letter that includes a or radio, or by telephone. This provision or add to the information reported on a fixed time to fulfill these requirements. applies only to those organizations previously filed return for the same After that period expires, the person whose annual gross receipts are period. It must make the amended failing to comply will be charged a normally more than $100,000 (section return available for public inspection for penalty of $10 a day. The maximum 6113 and Notice 88-120, 1988-2 C.B. 3 years from the date of filing or 3 years penalty on all persons for failures with 454). from the date the original return was respect to any one return shall not due, whichever is later. exceed $5,000 (section Failure to disclose that contributions

The organization must also send a 6652(c)(1)(B)(ii)). are not deductible could result in a

copy of the information or amended penalty of $1,000 for each day on Any person who does not comply return to any state with which it filed a which a failure occurs. The maximum with the public inspection requirements, copy of Form 990, or Form 990-EZ, penalty for failures by any organization, as discussed in General Instruction M, originally to meet that state’s filing during any calendar year, shall not will be assessed a penalty of $20 for requirement. exceed $10,000. In cases where the each day that inspection was not failure to make the disclosure is due to Use Form 4506 to obtain a copy of a permitted, up to a maximum of $10,000 intentional disregard of the law, more previously filed return. For information for each return. The penalties for failure severe penalties apply. No penalty will on getting blank tax forms, see General to comply with the public inspection be imposed if the failure is due to Instruction D. requirements for applications is the reasonable cause (section 6710). same as those for annual returns, If the return is a final return, see the except that the $10,000 limitation does Specific Instructions for Form 990 for Keeping Fundraising Records not apply (sections 6652(c)(1)(C) and line 79, Part VI. For Form 990-EZ, see for Tax-Deductible (D)). Any person who willfully fails to the Specific Instructions for line 36, Part comply with the public inspection Contributions V. requirements for annual returns or Section 501(c) organizations that are

exemption applications will be subject eligible to receive tax-deductible

K. Failure to File Penalties to an additional penalty of $5,000 contributions under section 170(c) of

(section 6685). the Code must keep sample copies of

Against the Organization There are also penalties (fines and their fundraising materials, such as:

• Dues statements, Under section 6652(c)(1)(A), a penalty imprisonment) for willfully not filing • Fundraising solicitations, of $20 a day, not to exceed the smaller returns and for filing fraudulent returns

of $10,000 or 5% of the gross receipts and statements with the IRS (sections • Tickets,

of the organization for the year, may be 7203, 7206, and 7207). States may • Receipts, or

charged when a return is filed late, impose additional penalties for failure to • Other evidence of payments received

unless the organization can show that meet their separate filing requirements. in connection with fundraising activities.

the late filing was due to reasonable See also the discussion of the Trust

Fund Recovery Penalty IF . . . THEN . . . cause. Organizations with annual gross , under General

receipts exceeding $1 million are Instruction D. Organizations advertise They must keep subject to a penalty of $100 for each their fundraising events, samples of the day the failure continues (with a L. Contributions advertising copy. maximum penalty with respect to any

one return of $50,000). The penalty Organizations use radio They must keep Schedule B (Form 990, 990-EZ, begins on the due date for filing the or television to make samples of:

Form 990 or Form 990-EZ. or 990-PF) their solicitations, • Scripts,

Use of a paid preparer does not Schedule B (Form 990, 990-EZ, or • Transcripts, or

990-PF), generally, is a required • Other evidence of relieve the organization of its attachment for the Form 990, 990-EZ, on-air solicitations. responsibility to file a complete and or 990-PF, and is used to report on accurate return. tax-deductible and non-tax-deductible Organizations use They must keep

Incomplete return. The penalty may outside fundraisers, samples of the contributions. See the Instructions for also be charged if the organization files fundraising materials Schedule B for the public inspection an incomplete return. To avoid having used by the outside rules applicable to that form. See also fundraisers. to supply missing information later, be the Specific Instructions for both Form sure to complete all applicable line 990 and Form 990-EZ, under items; answer “Yes,” “No,” or “N/A” (not Completing the Heading . . . where the For each fundraising event, applicable) to each question on the instructions are keyed to items in the organizations must keep records to return; make an entry (including a zero heading of Form 990 or Form 990-EZ. show the portion of any payment when appropriate) on all total lines; and received from patrons that is not enter “None” or “N/A” if an entire part Solicitations of Nondeductible deductible; that is, the retail value of the does not apply. Contributions goods or services received by the

Incorrect information. This penalty Any fundraising solicitation by or on patrons. See Disclosure statement for

may be imposed if the organization’s behalf of any section 501(c) or 527 quid pro quo contributions, later.

General Instructions for Form 990 and Form 990-EZ -9-
Noncash Contributions The organization’s acknowledgment Certain goods or services

must: disregarded for substantiation and See the Instructions for Schedule B

1. Be written. disclosure purposes. (Form 990, 990-EZ, or 990-PF).

2. Be contemporaneous. Goods or services with If the organization received a insubstantial value. Generally, under partially completed Form 8283 from a 3. State the amount of any cash it section 170, the deductible amount of a donor, complete it and return it so the received. contribution is determined by taking into donor can get a charitable contribution 4. State: account the fair market value, not the deduction. The organization should a. Whether the organization gave cost to the charity, of any benefits keep a copy for its records. See also the donor any intangible religious received in return. However, the cost to the reference to Form 8282 in General benefits (no valuation needed). the charity may be used in determining Instruction D. b. Whether or not the organization whether the benefits are insubstantial.

Qualified intellectual property. An gave the donor any goods or services See below.

organization described in section 170(c) in return for the donor’s contribution (a Cost basis. If a taxpayer makes a (except a private foundation) that quid pro quo contribution). payment of $44.50 or more to a charity receives or accrues net income from a 5. Describe goods or services the and receives only token items in return, qualified intellectual property organization: the items have insubstantial value if

contribution must file Form 8899. The a. Received (no valuation needed). they: organization must file the return for any • Bear the charity’s name or logo, and b. Gave (good faith estimate tax year that includes any part of the • Have an aggregate cost to the charity needed). 10-year period beginning on the date of of $8.90 or less (low-cost article amount

contribution but not for any tax years in of section 513(h)(2)). Exception. An organization need which the legal life of the qualified not make a good faith estimate of a Fair market value basis. If a intellectual property has expired or the quid pro quo contribution if the goods or taxpayer makes a payment to a property failed to produce net income. services given to a donor are: charitable organization in a fundraising

An organization (donee) reports all campaign and receives benefits with a • Insubstantial in value.

income from donated qualified fair market value of not more than 2% • Certain membership benefits for $75 of the amount of the payment, or $89, intellectual property as income other or less per year. See Certain than contributions (for example, royalty whichever is less, the benefits received membership benefits, later. income from a patent). Charities are not have insubstantial value in determining • Certain goods or services given to the taxpayer’s contribution. required to report as contributions any the donor’s employees or partners. of the additional deductions claimed by The dollar amounts given above donors under section 170(m)(1). Disclosure statement for quid pro are applicable to tax year 2007 Likewise, these additional deductions quo contributions. If the organization under Rev. Proc. 2006-53 (and

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are not required to be reported on receives a quid pro quo contribution of other successor documents). They are Schedule B (Form 990, 990-EZ, or more than $75, an organization must adjusted annually for inflation. 990-PF) and donees are not required to provide a disclosure statement to the When a donee organization provides comply with the substantiation donor. The organization’s disclosure a donor only with goods or services requirements of section 170(f)(8) with statement must: having insubstantial value under Rev. regard to any donor’s additional 1. Be written. Proc. 2006-53 (and any successor deductions. See Pub. 526.

2. Estimate in good faith the documents), the contemporaneous Motor vehicles, boats, and organization’s goods or services given written acknowledgment may indicate airplanes. Special rules apply to in return for donor’s contribution. that no goods or services were charitable contributions of motor provided in exchange for the donor’s 3. Describe, but need not value, vehicles, boats, or airplanes with a payment. certain goods or services given donor’s claimed value of more than $500. See employees or partners. Certain membership benefits. section 170(f)(12) and the Instructions Other goods or services that are 4. Inform the donor that a deductible for Form 1098-C. disregarded for substantiation and charitable contribution deduction is disclosure purposes are annual Substantiation and Disclosure limited as follows: membership benefits offered to a Requirements for Charitable taxpayer in exchange for a payment of Contributions Donor’s contribution $75 or less per year that consist of: Less Recordkeeping for cash, check, or 1. Any rights or privileges that the Organization’s money, and goods or services other monetary charitable gifts. A taxpayer can exercise frequently during given in return donor(s) must maintain a record on any the membership period such as:

contribution of cash, check, or other Equals a. Free or discounted admission to

monetary gift. This record must be a Donor’s deductible charitable contribution. the organization’s facilities or events, bank record or a written communication b. Free or discounted parking. from the donee showing the donee 2. Admission to events that are:

organization’s name, date, and amount Exception. No disclosure statement is a. Open only to members, and are, of the contribution. required if the organization gave the per person,

Acknowledgment to substantiate following. b. Within the low-cost article

charitable contributions. An 1. Goods or services of insubstantial limitation.

organization (donee) should be aware value. Examples. that a donor of a charitable contribution 2. Certain membership benefits. of $250 or more cannot take an income 1. E offers a basic membership 3. An intangible religious benefit. tax deduction unless the donor obtains benefits package for $75. The package

the organization’s acknowledgment to gives members the right to buy tickets See Regulations sections 1.170A-1,

substantiate the charitable contribution. in advance, free parking, and a gift 1.170A-13, and 1.6115-1.

-10- General Instructions for Form 990 and Form 990-EZ
shop discount of 10%. E’s $150 • To obtain an organization’s written consideration for the matching

preferred membership benefits package acknowledgment substantiating the payment.

also includes a $20 poster. Both the donation. Disclosure statement. An

basic and preferred membership There is no prescribed format for the organization must provide a written packages are for a 12-month period organization’s written acknowledgment disclosure statement to donors who

and include about 50 productions. E of a donation. Letters, postcards, or make a payment, described as a quid offers F, a patron of the arts, the computer-generated forms may be pro quo contribution, in excess of $75 preferred membership benefits in return acceptable. The acknowledgment must, (section 6115). This requirement is for a payment of $150 or more. F however, provide sufficient information separate from the written substantiation accepts the preferred membership to substantiate the amount of the acknowledgment a donor needs for benefits package for $300. E’s written deductible contribution. deductibility purposes. While, in certain acknowledgment satisfies the circumstances, an organization may be The organization may either: substantiation requirement if it able to meet both requirements with the • Provide separate statements for each describes the poster, gives a good faith same written document, an contribution of $250 or more, or estimate of its fair market value ($20), organization must be careful to satisfy • Furnish periodic statements and disregards the remaining the section 6115 written disclosure substantiating contributions of $250 or membership benefits. more. statement requirement in a timely 2. If F received only the basic manner because of the penalties membership package for its $300 Separate contributions of less than involved.

payment, E’s acknowledgment need $250 are not subject to the Quid pro quo contribution. A state only that no goods or services requirements of section 170(f)(8), quid pro quo contribution is a payment were provided. regardless of whether the sum of the that is given both as a contribution and 3. G Theater Group performs four contributions made by a taxpayer to a as a payment for goods or services plays. Each play is performed twice. donee organization during a tax year provided by the donee organization. Nonmembers can purchase a ticket for equals $250 or more. Example. A donor gives a charity $15. For a $60 membership fee, Contemporaneous. A written $100 in consideration for a concert however, members are offered free acknowledgment is contemporaneous if ticket valued at $40 (a quid pro quo admission to any of the performances. the donor obtains it on or before the

H makes a payment of $350 and contribution). In this example, $60 earlier of: would be deductible. Because the accepts this membership benefit. • The date the donor files the original Because of the limited number of donor’s payment exceeds $75, the return for the tax year in which the organization must furnish a disclosure performances, the membership contribution was made, or statement even though the taxpayer’s privilege cannot be exercised • The due date (including extensions) deductible amount does not exceed frequently. Therefore, G’s for filing the donor’s original return for $75. Separate payments of $75 or less acknowledgment must describe the free that year. made at different times of the year for admission benefit and estimate its Substantiation of payroll separate fundraising events will not be value in good faith. contributions. An organization may aggregated for purposes of the $75 substantiate a payroll contribution by: Certain goods or services threshold. • A pay stub, Form W-2, or other provided to donor’s employees or Good faith estimate. An document showing a contribution to a partners. Certain goods or services organization may use any reasonable donee organization; and provided to employees or partners of method in making a good faith estimate • A pledge card or other document donors may be disregarded for of the value of goods or services from the donee organization stating that substantiation and disclosure purposes. provided by an organization in Describe such goods or services. A organization provides no goods or consideration for a taxpayer’s payment services for any payroll contributions. good faith estimate is not needed. to that organization. A good faith

Example. Museum J offers a basic The amount withheld from each estimate of the value of goods or payment of wages to a taxpayer is membership benefits package for $40. services that are not generally available treated as a separate contribution. It includes free admission and a 10% in a commercial transaction may be

gift shop discount. Corporation K Substantiation of payments to a determined by reference to the fair

makes a $50,000 payment to J and in college or university for the right to market value of similar or comparable

return, J offers K’s employees free purchase tickets to athletic events. goods or services. Goods or services

admission, a tee shirt with J’s logo that The right to purchase tickets for an may be similar or comparable even

costs J $4.50, and a 25% gift shop athletic event is valued at 20% of the though they do not have the unique

discount. Because the free admission is payment. qualities of the goods or services that

offered in both benefit packages and Example. When a taxpayer pays are being valued.

the value of the tee shirts is $312.50 for the right to purchase tickets Goods or services. Goods or

insubstantial, K’s written for an athletic event, the right is valued services are:

acknowledgment need not value the at $62.50. The remaining $250 is a • Cash, free admission benefit or the tee shirts. charitable contribution that the taxpayer • Property, However, because the 25% gift shop must substantiate. • Services, discount to K’s employees differs from Substantiation of matched • Benefits, and the 10% discount offered in the basic payments. • Privileges. If a taxpayer’s payment to membership benefits package, K’s a donee organization is matched by In consideration for. A donee written acknowledgment must describe another payor, and the taxpayer organization provides goods or services the 25% discount, but need not receives goods or services in in consideration for a taxpayer’s estimate its value. consideration for its payment and some payment if, at the time the taxpayer Definitions. or all of the matching payment, those makes the payment to the donee

Substantiation. It is the goods or services will be treated as organization, the taxpayer receives, or

responsibility of the donor: provided in consideration for the expects to receive, goods or services in

• To value a donation, and taxpayer’s payment and not in exchange for that payment.

General Instructions for Form 990 and Form 990-EZ -11-
Goods or services a donee Through the IRS Note that a section 527 political

organization provides in consideration organization (and an Use Form 4506-A to request: for a payment by a taxpayer include organization filing Form 990-PF)

TIP

goods or services provided in a year • A copy of an exempt or political must disclose their Schedule B (Form

other than the year in which the donor organization’s return, report, notice, or 990, 990-EZ, or 990-PF). See the

makes the payment to the donee exemption application; Instructions for Schedule B.

organization. • An inspection of a return, report, The penalties discussed in General

Intangible religious benefits. notice, or exemption application at an Instruction K also apply to section 527 IRS office. Intangible religious benefits must be political organizations (Rev. Rul. provided by organizations organized 2003-49, 2003-204 I.R.B. 903). The IRS can provide copies of exclusively for religious purposes. exempt organization returns on a Public inspection and distribution of Examples include: compact disc (CD). Requesters can applications for tax exemption and • Admission to a religious ceremony, order the complete set (all Forms 990 annual information returns of and and 990-EZ or all Forms 990-PF filed tax-exempt organizations. Under • De minimis tangible benefits, such as for a year) or a partial set by state or by Regulations sections 301.6104(d)-1 wine, provided in connection with a month. For more information on the through 301.6104(d)-3, a tax-exempt religious ceremony. cost and how to order CDs, call the organization must: Distributing organization as TEGE Customer Account Services • Make its application for recognition of donee. An organization described in toll-free number (1-877-829-5500) or exemption and its annual information section 170(c), or an organization write to the IRS in Cincinnati, OH, at returns available for public inspection described as a Principal Combined the address in General Instruction A. without charge at its principal, regional, Fund Organization for purposes of the and district offices during regular Combined Federal Campaign, that The IRS may not disclose portions of business hours. an exemption application relating to any receives a payment made as a • Make each annual information return

contribution is treated as a donee trade secrets, etc. Additionally, the IRS available for a period of 3 years organization even if the organization may not disclose the names and beginning on the date the return is distributes the amount received to one addresses of contributors. See the required to be filed (determined with or more organizations described in Instructions for Schedule B (Form 990, regard to any extension of time for section 170(c). 990-EZ, or 990-PF) for more filing) or is actually filed, whichever is information about the disclosure of that Penalties. A charity that knowingly later. schedule. provides a false substantiation • Provide a copy without charge, (for

acknowledgment to a donor may be Forms 990 or 990-EZ can only be Form 990-T, this requirement only

subject to the penalties under section requested for section 527 organizations applies to Form 990-T’s filed after

6701 for aiding and abetting an for tax years beginning after June 30, August 17, 2006) other than a

understatement of tax liability. 2000. reasonable fee for reproduction and

Charities that fail to provide the actual postage costs, of all or any part

required disclosure statement for a quid A return, report, notice, or exemption of any application or return required to

pro quo contribution of more than $75 application may be inspected at an IRS be made available for public inspection

will incur a penalty of $10 per office free of charge. Copies of these to any individual who makes a request

contribution, not to exceed $5,000 per items may also be obtained through the for such copy in person or in writing organization as discussed in the (except as provided in Regulations fundraising event or mailing. The following section. sections 301.6104(d)-2 and -3). charity may avoid the penalty if it can

show that the failure was due to Through the Organization Definitions.

reasonable cause (section 6714). Tax-exempt organization is any Public inspection and distribution of organization that is described in section certain returns of unrelated business M. Public Inspection of 501(c) or (d) and is exempt from income. Section 501(c)(3) taxation under section 501(a). The term Returns, etc. organizations that are required to file tax-exempt organization also includes Some members of the public rely on Form 990-T after August 17, 2006, any section 4947(a)(1) nonexempt Form 990, or Form 990-EZ, as the must make Form 990-T available for charitable trust or nonexempt private public inspection under section primary or sole source of information foundation that is subject to the 6104(d)(1)(A)(ii). about a particular organization. How the reporting requirements of section 6033. public perceives an organization in Public inspection and distribution of Application for tax exemption such cases may be determined by the returns and reports for a political includes: information presented on its returns. organization. Section 527 political • Any prescribed application form An organization’s completed Form organizations required to file Form 990, (such as Form 1023 or Form 1024), 990, or Form 990-EZ, is available for or Form 990-EZ, must, in general, • All documents and statements the

public inspection as required by section make their Form 8871, 8872, 990, or IRS requires an applicant to file with the 6104. Schedule B (Form 990, 990-EZ, 990-EZ available for public inspection in form, or 990-PF) is open for public inspection the same manner as annual information • Any statement or other supporting for section 527 organizations filing returns of section 501(c) organizations document submitted in support of the Form 990 or Form 990-EZ. For other and 4947(a)(1) nonexempt charitable application, and organizations that file Form 990 or trusts are made available. See the • Any letter or other document issued Form 990-EZ, parts of Schedule B may public inspection rules for Tax-exempt by the IRS concerning the application. be open to public inspection. Form organization, later. Generally, Form Application for tax exemption 990-T filed after August 17, 2006, by a 8871 and Form 8872 are available for does not include: 501(c)(3) organization to report any inspection and printing from the

unrelated business income, is also Internet. The website address for both • Any application for tax exemption

available for public inspection and of these forms is /www.irs.gov/charities/ filed before July 15, 1987, unless the

disclosure. political/article/0,,id=109332,00.html. organization filing the application had a

-12- General Instructions for Form 990 and Form 990-EZ
copy of the application on July 15, managing the exempt function activities day following the day that the unusual

1987; at the site. circumstances cease to exist, or the 5th

• In the case of a tax-exempt business day after the date of the

organization other than a private request, whichever occurs first. Special rules relating to public foundation, the name and address of inspection. any contributor to the organization; or Unusual circumstances include:

• Any material that is not available for Permissible conditions on public • Requests received that exceed the

public inspection under section 6104. inspection. A tax-exempt organization’s daily capacity to make organization: copies; If there is no prescribed • May have an employee present in • Requests received shortly before the application form, see the room during an inspection. Regulations section end of regular business hours that CAUTION

! • Must allow the individual conducting require an extensive amount of 301.6104(d)-1(b)(4)(i). the inspection to take notes freely copying; or Annual information return during the inspection. • Requests received on a day when includes: • Must allow the individual to the organization’s managerial staff • An exact copy of the Form 990, or photocopy the document at no charge, capable of fulfilling the request is Form 990-EZ, filed by a tax-exempt if the individual provides photocopying conducting special duties, such as organization as required by section equipment at the place of inspection. student registration or attending an 6033. Organizations that do not off-site meeting or convention, rather • Any amended return the organization maintain permanent offices. A than its regular administrative duties. files with the IRS after the date the tax-exempt organization with no original return is filed. permanent office: Agents for providing copies. For • An exact copy of Form 990-T if one is • Must make its application for tax rules relating to use of agents to filed by a 501(c)(3) organization. exemption and its annual information provide copies, see Regulations The copy must include all returns available for inspection at a sections 301.6104(d)-1(d)(1) and (2). information furnished to the IRS on reasonable location of its choice.

Form 990, Form 990-EZ, or Form 990-T • Must permit public inspection within a Request for copies in writing. A

as well as all schedules, attachments, tax-exempt organization must honor a reasonable amount of time after

and supporting documents, except for receiving a request for inspection written request for a copy of documents

the name and address of any (normally not more than 2 weeks) and (or the requested part) required under

contributor to the organization. See the at a reasonable time of day. section 6104(d) if the request:

Instructions for Schedule B (Form 990, • May mail, within 2 weeks of receiving 1. Is addressed to, and delivered by 990-EZ, or 990-PF). the request, a copy of its application for mail, electronic mail, facsimile, or a tax exemption and annual information Annual returns more than 3 years private delivery service, as defined in returns to the requester instead of old. An annual information return does section 7502(f), to a principal, regional, allowing an inspection. not include any return after the or district office of the organization; and • May charge the requester for copying expiration of 3 years from the date the 2. Sets forth the address to which and actual postage costs only if the return is required to be filed (including the copy of the documents should be requester consents to the charge. any extension of time that has been sent.

granted for filing such return) or is An organization that has a actually filed, whichever is later. permanent office, but has no office Time and manner of fulfilling written hours, or very limited hours during If an organization files an amended requests. certain times of the year, must make its return, however, the amended return

must be made available for a period of documents available during those IF the organization . . THEN the organization periods when office hours are limited, 3 years beginning on the date it is filed

with the IRS. or not available, as though it were an Receives a written Must mail the copy of organization without a permanent request for a copy, the requested Local or subordinate office. documents (or the organizations. For rules relating to requested parts) within

annual information returns of local or Special rules relating to copies. 30 days from the date it

subordinate organizations, see receives the request. Time and place for providing Regulations section copies in response to requests made 301.6104(d)-1(f)(2). Mails the copy of the Is deemed to have in-person. A tax-exempt organization requested document, provided the copy on the

Regional or district offices. A must: postmark date or private

regional or district office is any office of • Provide copies of required delivery mark (if sent by

a tax-exempt organization, other than documents under section 6104(d) in certified or registered

mail, the date of its principal office, that has paid response to a request made in person registration or the date employees, whether part-time or at its principal, regional, and district of the postmark on the full-time, whose aggregate number of offices during regular business hours. sender’s receipt).

paid hours a week are normally at least • Provide such copies to a requester

120. on the day the request is made, except Requires payment in Is required to provide

for unusual circumstances (see below). advance, the copies within 30 A site is not considered a regional or days from the date it district office, however, if: Unusual circumstances. In the receives payment.

• The only services provided at the site case of an in-person request, where

further exempt purposes (such as day unusual circumstances exist so that Receives a request or Is deemed to have

care, health care, scientific research, or fulfilling the request on the same payment by mail, received it 7 days after

medical research); and business day causes an unreasonable the date of the

postmark, absent • The site does not serve as an office burden to the tax-exempt organization, evidence to the contrary. for management staff, other than the organization must provide the

managers who are involved solely in copies no later than the next business

General Instructions for Form 990 and Form 990-EZ -13-
Documents to be provided by each local or subordinate organization Receives a request Is deemed to have

transmitted by electronic received it the day the regional and district offices. Except included in the group return, the local or

mail or facsimile, request is transmitted as otherwise provided, a regional or subordinate organization receiving the

successfully. district office of a tax-exempt request may omit any schedules

organization must satisfy the same relating only to other organizations Receives a written Must notify the rules as the principal office with respect included in the group return. request without payment requester of the to allowing public inspection and or with an insufficient prepayment policy and The local or subordinate providing copies of its application for payment, when payment the amount due within 7 organization must permit public

in advance is required, days from the date of tax exemption and annual information inspection, or comply with a request for the request’s receipt. returns. copies made in person, within a

A regional or district office is not reasonable amount of time (normally Receives consent from May provide a copy of required, however, to make its annual not more than 2 weeks) after receiving an individual making a the requested document

request, exclusively by electronic information return available for a request made in person for public

mail (the material is inspection or to provide copies until 30 inspection or copies and at a

provided on the date the days after the date the return is reasonable time of day.

organization required to be filed (including any In a case where the requester seeks successfully transmits extension of time that is granted for the electronic mail). inspection, the local or subordinate filing such return) or is actually filed, organization may mail a copy of the whichever is later. applicable documents to the requester Request for a copy of parts of a Documents to be provided by within the same time period instead of document. A tax-exempt organization local and subordinate organizations. allowing an inspection. In such a case, must fulfill a request for a copy of the the organization may charge the organization’s entire application for tax Applications for tax exemption. requester for copying and actual exemption or annual information return Except as otherwise provided, a postage costs only if the requester or any specific part or schedule of its tax-exempt organization that did not file consents to the charge. application or return. A request for a its own application for tax exemption If the local or subordinate copy of less than the entire application (because it is a local or subordinate organization receives a written request or less than the entire return must organization covered by a group for a copy of its annual information specifically identify the requested part exemption letter) must, upon request, return, it must fulfill the request by or schedule. make available for public inspection, or providing a copy of the group return in Fees for copies. A tax-exempt provide copies of, the application the time and manner specified in the organization may charge a reasonable submitted to the IRS by the central or paragraph earlier, Request for copies in fee for providing copies. parent organization to obtain the group writing. exemption letter and those documents Before the organization provides the which were submitted by the central or The requester has the option of documents, it may require that the requesting from the central or parent parent organization to include the local individual requesting copies of the organization, at its principal office, or subordinate organization in the group documents pay the fee. If the inspection or copies of group returns exemption letter. organization has provided an individual filed by the central or parent making a request with notice of the fee, However, if the central or parent organization. The central or parent and the individual does not pay the fee organization submits to the IRS a list or organization must fulfill such requests within 30 days, or if the individual pays directory of local or subordinate in the time and manner specified in the the fee by check and the check does organizations covered by the group paragraphs, Special rules relating to not clear upon deposit, the organization exemption letter, the local or public inspection and Special rules may disregard the request. subordinate organization is required to relating to copies earlier. provide only the application for the Form of payment—(A) Request Failure to comply. If an group exemption ruling and the pages made in person. If a tax-exempt organization fails to comply with the of the list or directory that specifically organization charges a fee for copying, requirements specified in this refer to it. The local or subordinate it must accept payment by cash and paragraph, the penalty provisions of organization must permit public money order for requests made in sections 6652(c)(1)(C), 6652(c)(1)(D), inspection, or comply with a request for person. The organization may accept and 6685 apply. copies made in person, within a other forms of payment, such as credit reasonable amount of time (normally Making applications and returns cards and personal checks. not more than 2 weeks) after receiving widely available. A tax-exempt

(B) Request made in writing. If a a request made in person for public organization is not required to comply

tax-exempt organization charges a fee inspection or copies and at a with a request for a copy of its

for copying and postage, it must accept reasonable time of day. See application for tax exemption or an

payment by certified check, money Regulations section 301.6104(d)-1(f) for annual information return if the

order, and either personal check or further information. organization has made the requested

credit card for requests made in writing. Annual information returns. document widely available (see below). A

The organization may accept other local or subordinate organization that An organization that makes its forms of payment. does not file its own annual information application for tax exemption and/or

Avoidance of unexpected fees. return (because it is affiliated with a annual information return widely

Where a tax-exempt organization does central or parent organization that files available must nevertheless make the

a group return) must, upon request, document available for public not require prepayment and a requester make available for public inspection, or inspection as required under does not enclose payment with a provide copies of, the group returns Regulations section 301.6104(d)-1(a). request, an organization must receive filed by the central or parent consent from a requester before A tax-exempt organization makes its organization. providing copies for which the fee application for tax exemption and/or an

charged for copying and postage However, if the group return includes annual information return widely

exceeds $20. separate schedules with respect to available if the organization complies

-14- General Instructions for Form 990 and Form 990-EZ
with the Internet posting requirements Tax-exempt organization subject to

and the notice requirements given harassment campaign. If the Director N. Disclosures Regarding

below. EO Examination (or designee) Certain Information and

determines that the organization is Internet posting. A tax-exempt Services Furnished being harassed, a tax-exempt organization can make its application A section 501(c) organization that offers organization is not required to comply for tax exemption and/or an annual to sell or solicits money for specific with any request for copies that it information return widely available by information or for a routine service for reasonably believes is part of a posting the document on a World Wide any individual that could be obtained by Web page that the tax-exempt harassment campaign. such individual from a federal

organization establishes and maintains government agency free or for a or by having the document posted, as Whether a group of requests nominal charge, must disclose that fact part of a database of similar documents constitutes a harassment campaign conspicuously when making such offer of other tax-exempt organizations, on a depends on the relevant facts and or solicitation. Any organization that World Wide Web page established and circumstances such as: intentionally disregards this requirement maintained by another entity. The will be subject to a penalty for each day document will be considered widely A sudden increase in requests; an on which the offers or solicitations are

available only if: extraordinary number of requests by made. The penalty imposed for a • The World Wide Web page through form letters or similarly worded particular day is the greater of $1,000 which it is available clearly informs correspondence; hostile requests; or 50% of the total cost of the offers

readers that the document is available evidence showing bad faith or and solicitations made on that day that and provides instructions for deterrence of the organization’s exempt lacked the required disclosure (section downloading it; purpose; prior provision of the 6711). • The document is posted in a format requested documents to the purported that, when accessed, downloaded, harassing group; and a demonstration viewed, and printed in hard copy, O. Disclosures Regarding that the organization routinely provides exactly reproduces the image of the copies of its documents upon request. Certain Transactions and application for tax exemption or annual Relationships information return as it was originally

filed with the IRS, except for any A tax-exempt organization may In their annual returns on Schedule A

disregard any request for copies of all information permitted by statute to be (Form 990 or 990-EZ), section

withheld from public disclosure; and or part of any document beyond the 501(c)(3) organizations must disclose

• Any individual with access to the first two received within any 30-day information regarding their direct or

Internet can access, download, view, period or the first four received within indirect transfers to, and other direct or

and print the document without special any 1-year period from the same indirect relationships with, other section

computer hardware or software individual or the same address, 501(c) organizations (except other

required for that format (other than regardless of whether the Director EO section 501(c)(3) organizations) or

software that is readily available to Examination (or designee) has section 527 political organizations

members of the public without payment determined that the organization is (section 6033(b)(9)). This provision

of any fee) and without payment of a subject to a harassment campaign. helps prevent the diversion or

fee to the tax-exempt organization or to expenditure of a section 501(c)(3)

another entity maintaining the World A tax-exempt organization may organization’s funds for purposes not

Wide Web page. intended by section 501(c)(3). All apply for a determination that it is the section 501(c)(3) organizations must Reliability and accuracy. subject of a harassment campaign and In order maintain records regarding all such that compliance with requests that are for the document to be widely available transfers, transactions, and through an Internet posting, the entity part of the campaign would not be in relationships. See also General maintaining the World Wide Web page the public interest by submitting a Instruction K regarding penalties. must have procedures for ensuring the signed application to the Director EO

reliability and accuracy of the document Examination (or designee) for the area

that it posts on the page and must take where the organization’s principal office P. Intermediate Sanction

reasonable precautions to prevent is located. Regulations—Excess alteration, destruction, or accidental

loss of the document when posted on In addition, the organization may Benefit Transactions

its page. In the event that a posted suspend compliance with any request it The intermediate sanction regulations

document is altered, destroyed, or lost, reasonably believes to be part of the are important to the exempt

the entity must correct or replace the harassment campaign until it receives a organization community as a whole,

document. response to its application for a and for ensuring compliance in this

harassment campaign determination. area. The rules provide a roadmap by Notice requirement. If a

However, if the Director EO which an organization may steer clear tax-exempt organization has made its Examination (or designee) determines of situations that may give rise to application for tax exemption and/or an inurement. annual information return widely that the organization did not have a

available, it must notify any individual Under section 4958, any disqualified reasonable basis for requesting a

requesting a copy where the person who benefits from an excess determination that it was subject to a

documents are available (including the benefit transaction with an applicable harassment campaign or reasonable

address on the World Wide Web, if tax-exempt organization is liable for a belief that a request was part of the

applicable). If the request is made in 25% tax on the excess benefit. The campaign, the officer, director, trustee,

person, the organization must provide disqualified person is also liable for a employee, or other responsible

such notice to the individual 200% tax on the excess benefit if the individual of the organization remains

immediately. If the request is made in excess benefit is not corrected by a liable for any penalties for not providing

writing, the notice must be provided certain date. Also, organization the copies in a timely fashion. See

within 7 days of receiving the request. managers who participate in an excess Regulations section 301.6104(d)-3. 

General Instructions for Form 990 and Form 990-EZ -15-
benefit transaction knowingly, willfully, person, and 35% controlled entities of a • The person owns a controlling

and without reasonable cause are liable disqualified person. interest (measured by either vote or

for a 10% tax on the excess benefit, not value) in a corporation, partnership, or The following persons are to exceed $20,000 for all participating trust that is a disqualified person. considered disqualified persons along managers on each transaction. • The person is a nonstock with certain family members and 35% organization controlled directly or Applicable Tax-Exempt controlled entities associated with them: indirectly by one or more disqualified Organization • Donors of donor advised funds, persons. • Investment advisors of sponsoring These rules only apply to certain organizations, and Facts and circumstances tending applicable section 501(c)(3) and • The disqualified persons of a section to show no substantial influence: 501(c)(4) organizations. An applicable 509(a)(3) supporting organization for • The person is an independent tax-exempt organization is a section the organizations that organization contractor whose sole relationship to 501(c)(3) or a section 501(c)(4) supports. the organization is providing organization that is tax-exempt under Substantial contributors to professional advice (without having section 501(a), or was such an supporting organizations are also decision-making authority) with respect organization at any time during a 5-year considered disqualified persons along to transactions from which the period ending on the day of the excess with their family members and 35% independent contractor will not benefit transaction.

controlled entities. economically benefit. An applicable tax-exempt • The person has taken a vow of organization does not include: See the Instructions for Form 4720, poverty. • A private foundation as defined in Schedule I for more information • Any preferential treatment the person section 509(a). regarding these disqualified persons. receives based on the size of the • A governmental entity that is exempt Who is not a disqualified person? person’s donation is also offered to from (or not subject to) taxation without The rules also clarify which persons are others making comparable widely regard to section 501(a) or relieved not considered to be in a position to solicited donations. from filing an annual return under exercise substantial influence over the • The direct supervisor of the person is Regulations section 1.6033-2(g)(6). affairs of an organization. They include: not a disqualified person. • Certain foreign organizations. • An employee who receives benefits • The person does not participate in An organization is not treated as a that total less than the highly any management decisions affecting section 501(c)(3) or 501(c)(4) compensated amount ($100,000 in the organization as a whole or a organization for any period covered by 2007) and who does not hold the discrete segment of the organization a final determination that the executive or voting powers just that represents a substantial portion of organization was not tax-exempt under mentioned; is not a family member of a the activities, assets, income, or section 501(a), so long as the disqualified person; and is not a expenses of the organization, as determination was not based on private substantial contributor; compared to the organization as a inurement or one or more excess • Tax-exempt organizations described whole.

benefit transactions. in section 501(c)(3); and

• Section 501(c)(4) organizations with What about persons who staff Disqualified Person respect to transactions engaged in with affiliated organizations? In the case

The vast majority of section 501(c)(3) or other section 501(c)(4) organizations. of multiple affiliated organizations, the

501(c)(4) organization employees and determination of whether a person has Who else may be considered a contractors will not be affected by these substantial influence is made disqualified person? Other persons rules. Only the few influential persons separately for each applicable not described above can also be within these organizations are covered tax-exempt organization. A person may considered disqualified persons, by these rules when they receive be a disqualified person with respect to depending on all the relevant facts and benefits, such as compensation, fringe transactions with more than one circumstances. benefits, or contract payments. The IRS organization.

calls this class of covered individuals Facts and circumstances tending

disqualified persons. to show substantial influence: Excess Benefit Transaction • The person founded the organization. A An excess benefit transaction is a disqualified person, regarding any • The person is a substantial transaction in which an economic transaction, is any person who was in a contributor to the organization under benefit is provided by an applicable position to exercise substantial the section 507(d)(2)(A) definition, only tax-exempt organization, directly or influence over the affairs of the taking into account contributions to the indirectly, to or for the use of any applicable tax-exempt organization at organization for the past 5 years. disqualified person, and the value of any time during a 5-year period ending • The person’s compensation is the economic benefit provided by the on the date of the transaction. Persons primarily based on revenues derived who hold certain powers, organization exceeds the value of the from activities of the organization that consideration (including the responsibilities, or interests are among the person controls. performance of services) received for those who are in a position to exercise • The person has or shares authority to providing such benefit. An excess substantial influence over the affairs of control or determine a substantial benefit transaction also can occur when the organization. This would include, for portion of the organization’s capital example, voting members of the a disqualified person embezzles from expenditures, operating budget, or the exempt organization. governing body, and persons holding compensation for employees. the power of: • The person manages a discrete To determine whether an excess • Presidents, chief executive officers, segment or activity of the organization benefit transaction has occurred, all or chief operating officers. that represents a substantial portion of consideration and benefits exchanged • Treasurers and chief financial the activities, assets, income, or between a disqualified person and the officers. expenses of the organization, as applicable tax-exempt organization, and

A disqualified person also includes compared to the organization as a all entities it controls, are taken into

certain family members of a disqualified whole. account.

-16- General Instructions for Form 990 and Form 990-EZ
 For purposes of determining the When does an excess benefit bonuses, severance payments, and

value of economic benefits, the value of transaction usually occur? An deferred and noncash compensation.

property, including the right to use excess benefit transaction occurs on • The payment of liability insurance

property, is the fair market value. Fair the date the disqualified person premiums for, or the payment or

market value is the price at which receives the economic benefit from the reimbursement by the organization of

property, or the right to use property, organization for federal income tax taxes or certain expenses under section

would change hands between a willing purposes. However, when a single 4958, unless excludable from income

buyer and a willing seller, neither being contractual arrangement provides for a as a de minimis fringe benefit under

under any compulsion to buy, sell, or series of compensation payments or section 132(a)(4). (A similar rule applies

transfer property or the right to use other payments to a disqualified person in the private foundation area.)

property, and both having reasonable during the disqualified person’s tax Inclusion in compensation for purposes

knowledge of relevant facts. year, any excess benefit transaction of determining reasonableness under

with respect to these payments occurs section 4958 does not control inclusion Donor advised funds. For a donor on the last day of the taxpayer’s tax in income for income tax purposes. advised fund, an excess benefit year. • All other compensatory benefits, transaction includes a grant, loan, whether or not included in gross income In the case of the transfer of property compensation, or similar payment from for income tax purposes. subject to a substantial risk of forfeiture, the fund to a: • Taxable and nontaxable fringe or in the case of rights to future • Donor or donor advisor, benefits, except fringe benefits compensation or property, the • Family member of a donor, or donor described in section 132. transaction occurs on the date the advisor, • Foregone interest on loans. property, or the rights to future • 35% controlled entity of a donor, or

donor advisor, or compensation or property, is not Written intent required to treat subject to a substantial risk of forfeiture. benefits as compensation. An • 35% controlled entity of a family Where the disqualified person elects to member of a donor, or donor advisor. economic benefit is not treated as

include an amount in gross income in consideration for the performance of

The excess benefit in this the tax year of transfer under section services unless the organization

transaction is the amount of the grant, 83(b), the excess benefit transaction providing the benefit clearly indicates its

loan, compensation, or similar payment. occurs on the date the disqualified intent to treat the benefit as

For additional information see the person receives the economic benefit compensation when the benefit is paid. for federal income tax purposes. Instructions for Form 4720. An applicable tax-exempt Section 4958 applies only to Supporting organizations. For any organization (or entity that it controls) is post-September 1995 transactions. supporting organization, defined in treated as clearly indicating its intent to Section 4958 applies to excess benefit section 509(a)(3), an excess benefit provide an economic benefit as transactions occurring on or after transaction includes grants, loans, compensation for services only if the September 14, 1995. Section 4958 compensation, or similar payment organization provides written does not apply to any transaction provided by the supporting organization substantiation that is contemporaneous occurring pursuant to a written contract to a: with the transfer of the economic that was binding on September 13, • Substantial contributor, benefits under consideration. Ways to 1995, and at all times thereafter before • Family member of a substantial provide contemporaneous written the transaction occurs.

contributor, substantiation of its intent to provide an What is reasonable compensation? • 35% controlled entity of a substantial economic benefit as compensation Reasonable compensation is the contributor, or include: valuation standard that is used to • 35% controlled entity of a family • The organization produces a signed determine if there is an excess benefit member of a substantial contributor. written employment contract; in the exchange of a disqualified • The organization reports the benefit Additionally, an excess benefit person’s services for compensation. as compensation on an original Form transaction includes any loans provided Reasonable compensation is the W-2, Form 1099 or Form 990, or on an

by the supporting organization to a value that would ordinarily be paid for amended form filed prior to the start of disqualified person (other than an like services by like enterprises under an IRS examination; or

organization described in section like circumstances. This is the section • The disqualified person reports the 509(a)(1), (2), or (4)). 162 standard that will apply in benefit as income on the person’s determining the reasonableness of original Form 1040 or on an amended A substantial contributor is any compensation. The fact that a bonus or form filed prior to the start of an IRS person who contributed or bequeathed revenue-sharing arrangement is subject examination. an aggregate of more than $5,000 to to a cap is a relevant factor in the organization, if that amount is more Exception. To the extent the determining the reasonableness of than 2% of the total contributions and economic benefit is excluded from the compensation. bequests received by the organization disqualified person’s gross income for For determining the reasonableness before the end of the tax year of the income tax purposes, the applicable of compensation, all items of organization in which the contribution or tax-exempt organization is not required compensation provided by an bequest is received by the organization to indicate its intent to provide an applicable tax-exempt organization in from such person. A substantial economic benefit as compensation for exchange for the performance of contributor includes the grantor of a services. (For example, employer services are taken into account in trust. provided health benefits, and determining the value of compensation contributions to qualified plans under The excess benefit for substantial (except for certain economic benefits section 401(a).) contributors and parties related to those that are disregarded, as discussed in

contributors includes the amount of the What benefits are disregarded? later). What benefits are disregarded? The

grant, loan, compensation, or similar Items of compensation include: following economic benefits are

payment. For additional information see • All forms of cash and noncash disregarded for purposes of section

the Instructions for Form 4720. compensation, including salary, fees, 4958.

General Instructions for Form 990 and Form 990-EZ -17-
• Nontaxable fringe benefits. An is a material change, which includes an the exact amount of the payment is

economic benefit that is excluded from extension or renewal of the contract determined, or a fixed formula for

income under section 132. (except for an extension or renewal calculating the payment is specified,

• Benefits to volunteer. An economic resulting from the exercise of an option and the three requirements creating the

benefit provided to a volunteer for the by the disqualified person), or a more presumption have been satisfied.

organization if the benefit is provided to than incidental change to the amount However, if the authorized body

the general public in exchange for a payable under the contract, is treated approves an employment contract with

membership fee or contribution of $75 as a new contract as of the effective a disqualified person that includes a

or less per year. date of the material change. Treatment nonfixed payment (for example,

• Benefits to members or donors. An as a new contract may cause the discretionary bonus) with a specified

economic benefit provided to a member contract to fall outside the initial cap on the amount, the authorized body

of an organization due to the payment contract exception, and it thus would be may establish a rebuttable presumption

of a membership fee, or to a donor as a tested under the fair market value as to the nonfixed payment when the

result of a deductible contribution, if a standards of section 4958. employment contract is entered into by,

significant number of nondisqualified in effect, assuming that the maximum Rebuttable Presumption of persons make similar payments or amount payable under the contract will

contributions and are offered a similar be paid, and satisfying the Reasonableness

economic benefit. requirements giving rise to the Payments under a compensation • Benefits to a charitable beneficiary. rebuttable presumption for that arrangement are presumed to be

An economic benefit provided to a maximum amount. reasonable and the transfer of property

person solely as a member of a (or right to use property) is presumed to An IRS challenge to the presumption charitable class that the applicable be at fair market value, if the following of reasonableness. The Internal tax-exempt organization intends to three conditions are met. Revenue Service may refute the benefit as part of the accomplishment 1. The transaction is approved by presumption of reasonableness only if it of its exempt purpose. an authorized body of the organization develops sufficient contrary evidence to • Benefits to a governmental unit. A (or an entity it controls) which is rebut the probative value of the transfer of an economic benefit to or for composed of individuals who do not comparability data relied upon by the the use of a governmental unit, as have a conflict of interest concerning authorized body. This provision gives defined in section 170(c)(1), if the transaction. taxpayers added protection if they exclusively for public purposes. 2. Prior to making its determination, faithfully find and use contemporaneous Is there an exception for initial the authorized body obtained and relied persuasive comparability data when contracts? Section 4958 does not upon appropriate data as to they provide the benefits. apply to any fixed payment made to a comparability. There is a special safe

person pursuant to an initial contract. Organizations that do not establish a harbor for small organizations. If the

This is a very important exception, presumption of reasonableness. An organization has gross receipts of less

since it would potentially apply, for organization may still comply with than $1 million, appropriate

example, to all initial contracts with section 4958 even if it did not establish comparability data includes data on

new, previously unrelated officers and a presumption of reasonableness. In compensation paid by three

contractors. some cases, an organization may find it comparable organizations in the same impossible or impracticable to fully An or similar communities for similar initial contract is a binding written implement each step of the rebuttable contract between an applicable services.

presumption process described above. tax-exempt organization and a person 3. The authorized body adequately In such cases, the organization should who was not a disqualified person documents the basis for its

try to implement as many steps as immediately prior to entering into the determination concurrently with making possible, in whole or in part, in order to contract. that determination. The documentation

substantiate the reasonableness of should include: A fixed payment is an amount of benefits as timely and as well as a. The terms of the approved cash or other property specified in the possible. If an organization does not transaction and the date approved; contract, or determined by a fixed satisfy the requirements of the b. The members of the authorized formula that is specified in the contract, rebuttable presumption of which is to be paid or transferred in body who were present during debate reasonableness, a facts and on the transaction that was approved exchange for the provision of specified circumstances approach will be and those who voted on it; services or property. followed, using established rules for c. The comparability data obtained A fixed formula may, in general, determining reasonableness of and relied upon by the authorized body incorporate an amount that depends compensation and benefit deductions in and how the data was obtained; upon future specified events or a manner similar to the established d. Any actions by a member of the contingencies, as long as no one has procedures for section 162 business authorized body having a conflict of discretion when calculating the amount expenses. interest; and of a payment or deciding whether to

make a payment (such as a bonus). e. Documentation of the basis for Section 4958 Taxes the determination before the later of the

Treatment as new contract. A next meeting of the authorized body or Tax on disqualified persons. An

binding written contract providing that it excise tax equal to 25% of the excess 60 days after the final actions of the may be terminated or cancelled by the benefit is imposed on each excess authorized body are taken, and applicable tax-exempt organization benefit transaction between an approval of records as reasonable, without the other party’s consent applicable tax-exempt organization and accurate and complete within a (except as a result of substantial a disqualified person. The disqualified reasonable time thereafter.

non-performance) and without person who benefited from the

substantial penalty, is treated as a new Special rebuttable presumption rule transaction is liable for the tax. If the

contract, as of the earliest date that any for nonfixed payments. As a general 25% tax is imposed and the excess

termination or cancellation would be rule, in the case of a nonfixed payment, benefit transaction is not corrected

effective. Also, a contract in which there no rebuttable presumption arises until within the taxable period, an additional

-18- General Instructions for Form 990 and Form 990-EZ
excise tax equal to 200% of the excess disclosure of the factual situation to an property is less than the correction

benefit is imposed. appropriate professional, the amount, the disqualified person must

organization manager relied on the make an additional cash payment to If a disqualified person makes a professional’s reasoned written opinion the organization equal to the difference. payment of less than the full correction on matters within the professional’s amount, the 200% tax is imposed only Excess payment. If the payment expertise or if the manager relied on on the unpaid portion of the correction resulting from the return of the property the fact that the requirements for the amount. If more than one disqualified exceeds the correction amount rebuttable presumption of person received an excess benefit from described above, the organization may reasonableness have been satisfied. an excess benefit transaction, all such make a cash payment to the Participation by an organization disqualified persons are jointly and disqualified person equal to the manager is willful if it is voluntary, severally liable for the taxes. difference. conscious, and intentional. An To avoid the imposition of the 200% organization manager’s participation is tax, a disqualified person must correct Churches and Section 4958 due to reasonable cause if the manager the excess benefit transaction during has exercised responsibility on behalf The regulations make it clear that the the taxable period. The taxable period of the organization with ordinary IRS will apply the procedures of section begins on the date the transaction business care and prudence. 7611 when initiating and conducting occurs and ends on the earlier of the any inquiry or examination into whether date the statutory notice of deficiency is Correcting an Excess Benefit an excess benefit transaction has

issued or the section 4958 taxes are Transaction occurred between a church and a

assessed. This 200% tax may be A disqualified person corrects an disqualified person. abated if the excess benefit transaction excess benefit transaction by undoing subsequently is corrected during a Revenue Sharing Transactions the excess benefit to the extent 90-day correction period. possible, and by taking any additional Proposed intermediate sanction Tax on organization managers. An measures necessary to place the regulations were issued in 1998. The excise tax equal to 10% of the excess organization in a financial position not proposed regulations had special benefit may be imposed on the worse than that in which it would be if provisions covering “any transaction in participation of an organization the disqualified person were dealing which the amount of any economic manager in an excess benefit under the highest fiduciary standards. benefit provided to or for the use of a transaction between an applicable The organization is not required to disqualified person is determined in tax-exempt organization and a rescind the underlying agreement; whole or in part by the revenues of one disqualified person. This tax, which may however, the parties may need to or more activities of the organization. . not exceed $20,000 for any single modify an ongoing contract with respect .” — so-called revenue-sharing transaction, is only imposed if the 25% to future payments. transactions. Rather than setting forth tax is imposed on the disqualified additional rules on revenue-sharing A disqualified person corrects an person, the organization manager transactions, the final regulations excess benefit by making a payment in knowingly participated in the reserve this section. Consequently, until cash or cash equivalents equal to the transaction, and the manager’s the Service issues new regulations for correction amount to the applicable participation was willful and not due to this reserved section on tax-exempt organization. The correction reasonable cause. There is also joint revenue-sharing transactions, these amount equals the excess benefit plus and several liability for this tax. An transactions will be evaluated under the the interest on the excess benefit; the organization manager may be liable for general rules (for example, the fair interest rate may be no lower than the both the tax on disqualified persons market value standards) that apply to applicable Federal rate. There is an and on organization managers in all contractual arrangements between anti-abuse rule to prevent the appropriate circumstances. applicable tax-exempt organizations disqualified person from effectively An organization manager and their disqualified persons. is any transferring property other than cash or officer, director, or trustee of an cash equivalents. applicable tax-exempt organization, or Revocation of Exemption and

any individual having powers or Exception. For a correction of an Section 4958

excess benefit transaction described in responsibilities similar to officers, Section 4958 does not affect the Donor advised funds (discussed directors, or trustees of the substantive standards for tax exemption earlier), no amount repaid in a manner organization, regardless of title. An under section 501(c)(3) or section prescribed by the Secretary may be organization manager is not considered 501(c)(4), including the requirements held in a donor advised fund. to have participated in an excess that the organization be organized and benefit transaction where the manager Property. With the agreement of the operated exclusively for exempt has opposed the transaction in a applicable tax-exempt organization, a purposes, and that no part of its net manner consistent with the fulfillment of disqualified person may make a earnings inure to the benefit of any the manager’s responsibilities to the payment by returning the specific private shareholder or individual. The organization. For example, a director property previously transferred in the legislative history indicates that in most who votes against giving an excess excess benefit transaction. The return instances, the imposition of this benefit would ordinarily not be subject of the property is considered a payment intermediate sanction will be in lieu of

to this tax. of cash (or cash equivalent) equal to revocation. The IRS has indicated that

the lesser of: A person participates in a the following four factors will be

transaction knowingly if the person has • The fair market value of the property considered in determining whether to

actual knowledge of sufficient facts so on the date the property is returned to revoke an applicable tax-exempt

that, based solely upon such facts, the the organization, or organization’s exemption status where

transaction would be an excess benefit • The fair market value of the property an excess benefit transaction has

transaction. Knowing does not mean on the date the excess benefit occurred:

transaction occurred. having reason to know. The • Whether the organization has been

organization manager ordinarily will not Insufficient payment. If the involved in repeated excess benefit

be considered knowing if, after full payment resulting from the return of the transactions;

General Instructions for Form 990 and Form 990-EZ -19-
• The size and scope of the excess If the central organization prepares a

benefit transaction; group return for its affiliated U. Political Organizations • Whether, after concluding that it has organizations, check the “Yes” box in A political organization subject to been party to an excess benefit item H(a), in the heading of Form 990, section 527 is a party, committee, transaction, the organization has and indicate the number of association, fund, or other organization implemented safeguards to prevent organizations for which the group return (whether or not incorporated) organized future recurrences; and is filed in item H(b). and operated primarily for the purpose • Whether there was compliance with of directly or indirectly accepting For item H(c), check “Yes,” to other applicable laws. contributions or making expenditures, indicate that the group return includes or both, for an exempt function. all affiliated organizations covered by

Q. Erroneous Backup the group ruling. If the organization The exempt function of a political

answers “No” to H(c), attach a list organization is influencing or attempting Withholding showing the name, address, and EIN of to influence the selection, nomination,

Recipients of dividend or interest each affiliated organization included in election or appointment of an individual

payments generally must certify their the group return. If either box in H(a) or to a federal, state, or local public office

correct taxpayer identification number H(d) is checked “Yes,” enter the or office in a political organization. A

to the bank or other payer on Form four-digit group exemption number political organization must be organized

W-9. If the payer does not get this (GEN). Do not confuse the four-digit for the primary purpose of carrying on

information, it must withhold part of the GEN number to be reported for item I exempt function activities.

payments as backup withholding. If the with the nine-digit EIN number reported A political organization does not organization was subject to erroneous in item D of the form’s heading. need to be formally chartered or backup withholding because the payer The central organization should send established as a corporation, trust, or did not realize it was an exempt the annual information required to association. A separate bank account in organization and not subject to this maintain a group exemption letter to which political campaign funds are withholding, it can claim credit on Form the: deposited and disbursed only for 990-T for the amount withheld. See the political campaign expenses can qualify Instructions for Form 990-T. Claims for Department of Treasury as a political organization. refund must be filed within 3 years after Internal Revenue Service Center

the date the original return was due; 3 Ogden, UT 84201-0027

years after the date the organization V. Information Regarding An affiliated organization covered by filed it; or 2 years after the date the tax a group ruling may file a separate Transfers Associated With was paid, whichever is later. return instead of being included in the Personal Benefit Contracts

group return. In such case, check the Filers of Form 990 that engaged in R. Group Return “Yes” box in item H(d), in the heading activities involving personal benefit of Form 990, and enter the GEN If a parent organization wants to file a contracts must declare in Part X, number in item I. group return for two or more of its Information Regarding Transfers

subsidiaries, it must use Form 990. The Parts IV-A and IV-B of Form 990 do Associated With Personal Benefit

parent organization cannot use a Form not have to be completed on group Contracts, whether or not they:

990-EZ for the group return. returns. 1. Received any funds, directly or

A central, parent, or like organization indirectly, to pay premiums on a

personal benefit contract. can file a group return on Form 990 for S. Organizations in Foreign 2. Paid any premiums, directly or two or more local organizations that Countries and U.S. indirectly, on a personal benefit are: Possessions contract. 1. Affiliated with the central

organization at the time its annual Refer to General Instruction B for the Filers of Form 990-EZ must accounting period ends, filing exemption for foreign make this declaration in a 2. Subject to the central organizations with $25,000 or less in CAUTION statement attached to their form.

!

organization’s general supervision or gross receipts from U.S. sources.

control, Report amounts in U.S. dollars and If premiums were paid on a personal

3. Exempt from tax under a group benefit contract, the organization must state what conversion rate the

exemption letter that is still in effect, organization uses. Combine amounts report these payments on Form 8870

and from within and outside the United and pay an excise tax, equal to

4. Have the same accounting period States and report the total for each premiums paid, with Form 4720.

as the central organization. item. All information must be written in Section 170(f)(10)(F)(iii) requires a

English. charitable organization to report If the parent organization is required annually its premium payments on a to file a return for itself, it must file a personal benefit contract with respect to separate return and may not be T. Public Interest Law Firms a transferor and to identify the included in the group return. See A public interest law firm exempt under beneficiaries of those contracts. A General Instruction B for a list of section 501(c)(3) or 501(c)(4) must transferor of funds to a charitable organizations not required to file. attach a statement that lists the cases organization receives no charitable

Every year, each local organization in litigation, or that have been litigated contribution deduction if the

must authorize the central organization during the year. For each case, organization, directly or indirectly, pays,

in writing to include it in the group describe the matter in dispute and or has previously paid, any premium on

return and must declare, under penalty explain how the litigation will benefit the a personal benefit contract with respect

of perjury, that the authorization and public generally. Also attach a report of to the transferor, or there is an

the information it submits to be included all fees sought and recovered in each understanding or expectation that any

in the group return are true and case. See Rev. Proc. 92-59, 1992-2 person will directly or indirectly pay any

complete. C.B. 411. premium on a personal benefit contract

-20- General Instructions for Form 990 and Form 990-EZ
with respect to the transferor (section organizations, and other charities transaction will be excluded from the

170(f)(10)(A)). described in section 501(c)(3); definition of listed transaction,

c. Civic leagues, social welfare confidential transaction, or transaction A personal benefit contract, organizations, and local associations with contractual protection, the generally, is any life insurance, annuity, of employees described in section transaction will not be considered a or endowment contract that benefits, 501(c)(4); prohibited tax shelter transaction. directly or indirectly, the transferor, a d. Labor, agricultural, or member of the transferor’s family, or Listed transaction. A listed horticultural organizations described any other person designated by the transaction is a transaction that is the in section 501(c)(5); transferor (other than an organization same as or substantially similar to any e. Business leagues, chambers of described in section 170(c)). A of the types of transactions that the IRS commerce, trade associations, and charitable organization is an has determined to be a tax avoidance other organizations described in organization described in section transaction and are identified by notice, section 501(c)(6); 170(c). regulation, or other form of published f. Voluntary employees’ guidance as a listed transaction. For Section 170(f)(10)(F)(i) imposes on a beneficiary associations (VEBAs) existing guidance see: charitable organization an excise tax described in section 501(c)(9); • Notice 2004-67, 2004-41 I.R.B. 600; equal to the premiums paid by the g. Credit unions described in • Notice 2005-13, 2005-9 I.R.B. 630; organization on any personal benefit section 501(c)(14); and contract, if the payment of premiums is h. Insurance companies • Notice 2007-57, 2007-29 I.R.B. 87. in connection with a transfer for which a described in section 501(c)(15); and

deduction is not allowed under section i. Veterans’ organizations For updates to this list go to the IRS 170(f)(10)(A). For purposes of this described in section 501(c)(19). web page at www.irs.gov/businesses/ excise tax, section 170(f)(10)(F)(ii) 2. Religious or apostolic corporations and click on Abusive Tax provides that premium payments made associations or corporations described Shelters and Transactions. The IRS by any other person, pursuant to an in section 501(d). may issue new or update the existing understanding or expectation described 3. Entities described in section notice, regulation, announcement, or in section 170(f)(10)(A), are treated as 170(c), including states, possessions of other forms of published guidance that made by the charitable organization. the United States, the District of identify transactions as listed Columbia, political subdivisions of For more information on the transactions. You can find a notice or states, and political subdivisions of reporting requirements of section ruling in the Internal Revenue Bulletin possessions of the United States (but 170(f)(10), see Notice 2000-24, at www.irs.gov/pub/irs-irbs/ not including the United States). 2000-17 I.R.B. 952 (2000-1 C.B. 952) irbXX-YY.pdf, where XX is the two-digit 4. Indian tribal governments within and Announcement 2000-82, 2000-42 year and YY is the two-digit bulletin the meaning of section 7701(a)(40). I.R.B. 385 (2000-2 C.B. 385). number. For example, you can find

Definition of a party to a prohibited Notice 2004-67, 2004-41 I.R.B. 600, at

www.irs.gov/pub/irs-irbs/irb04-41.pdf. tax shelter transaction. A tax-exempt W. Prohibited Tax Shelter entity is a party to a transaction if it: Subsequently listed transaction. Transactions and • Facilitates the transaction by reason A subsequently listed transaction is a

Related Disclosure of its tax-exempt, tax-indifferent, or transaction that is identified in

tax-favored status, or published guidance as a listed Requirements • Enters into a listed transaction and transaction after the tax-exempt entity New section 4965 imposes an excise the tax-exempt entity’s return (original has entered into the transaction and

tax on: or amended) reflects a reduction or that was not a confidential transaction • Certain tax-exempt entities that are a elimination of liability for applicable or transaction with contractual

party to a prohibited tax shelter federal employment, excise, or protection at the time the entity entered transaction, and unrelated business income taxes that is into the transaction. See section • Any entity manager who approves or derived directly or indirectly from tax 4965(e)(2) for more information. otherwise causes the entity to be a consequences or tax strategy described Substantially similar. A party to a prohibited tax shelter in the published guidance that lists the transaction is substantially similar to transaction and knows or has reason to transaction; or another transaction if it is expected to know that the transaction is a prohibited • Is identified in published guidance by obtain the same or similar types of tax tax shelter transaction. type, class, or role as party to a consequences and is either factually prohibited tax shelter transaction. similar or based on the same or similar Additionally, section 6033 provides new Entity manager. An entity manager is tax strategy. Receipt of an opinion disclosure requirements on a any person with authority or regarding the tax consequences of the tax-exempt entity that is a party to a responsibility similar to that exercised transaction is not relevant to the prohibited tax shelter transaction. See by an officer, director, or trustee, and, determination of whether the Form 8886-T and it’s instructions for

more information. for any act, the person that has final transaction is the same as or

authority or responsibility with respect substantially similar to another Tax-exempt entities. Tax-exempt to such act. transaction. Further, the term entities that are subject to section 4965 Prohibited tax shelter transaction. substantially similar must be broadly include: Generally, a prohibited tax shelter construed in favor of disclosure. See

1. Entities described in section transaction is a transaction that is a Regulations section 1.6011-4(c)(4) for

501(c), including but not limited to the listed transaction (including examples.

following common types of entities: subsequently listed transaction), a Confidential transaction. A

 a. Instrumentalities of the United confidential transaction is a transaction confidential transaction, or a transaction

States described in section this is offered under conditions of with contractual protection. See

501(c)(1); definitions of these terms later. confidentiality and for which a minimum

 b. Churches, hospitals, museums, Note. In general, if the IRS determines fee (defined below) was paid. A

schools, scientific research by published guidance that a transaction is considered to be offered

General Instructions for Form 990 and Form 990-EZ -21-
under conditions of confidentiality if the how it is figured, see the Instructions for return he or she files for a corporation

advisor places a limitation on disclosure Form 4720. or association. For a trust, the

of the tax treatment or tax structure of authorized trustee(s) must sign. Required Disclosure the transaction and the limitation on The paid preparer must: disclosure protects the confidentiality of Certain tax-exempt entities are required • Sign the return in the space provided to file disclosure information of: the advisor’s tax strategies. The for the preparer’s signature. transaction is treated as confidential • Such entity being a party to any • Enter the preparer’s social security even if the conditions of confidentiality prohibited tax shelter transaction, and number (SSN), preparer tax are not legally binding. See Regulations • The identity of any other known party identification number (PTIN), or section 1.6011-4(b)(3) for more to the prohibited tax shelter transaction. employer identification number (EIN), information. Use Form 8886-T to report the only if the Form 990, or Form 990-EZ,

Minimum fee. disclosure. Entities that fail to file the is for a section 4947(a)(1) nonexempt For a corporation,

or a partnership or trust in which all of required disclosure are subject to a charitable trust that is not filing Form nondisclosure penalty of $100 for each 1041. the owners or beneficiaries are

corporations (looking through any day the failure continues with a • Complete the required preparer

partners or beneficiaries that are maximum penalty for any one information.

themselves partners or trusts), the disclosure of $50,000. • Give a copy of the return to the

minimum fee is $250,000. For all Also, if the IRS makes a written organization.

others, the minimum fee is $50,000. demand on any entity subject to this Leave the paid preparer’s space

The minimum fee includes all fees paid penalty, giving the entity a reasonable blank if the return was prepared by a

directly or indirectly for the tax strategy, date to make the disclosure and the regular employee of the filing

advice or analysis of the transaction entity fails to make disclosure by that organization.

(whether or not related to the tax date, the entity is subject to a penalty of Recordkeeping. The organization’s consequences of the transaction), $100 for each day after the date records should be kept for as long as implementation and documentation of specified by the IRS until disclosure is they may be needed for the the transaction, and tax preparation made (with a maximum penalty for any administration of any provision of the fees to the extent they exceed one disclosure of $10,000). See Internal Revenue Code. Usually, customary return preparation fees. Instructions for Form 8886-T for more records that support an item of income, Fees do not include amounts paid to a information. deduction, or credit must be kept for 3 person, including an advisor, in that Excise Tax on Entity Managers years from the date the return is due or person’s capacity as a party to the filed, whichever is later. Keep records transaction. Section 4965(a)(2) imposes an excise that verify the organization’s basis in tax on any tax-exempt entity manager Transaction with contractual property for as long as they are needed who approves or otherwise causes the protection. A transaction with to figure the basis of the original or entity to be a party to a prohibited tax contractual protection is a transaction replacement property. shelter transaction and knows (or has for which a participant (or related party reason to know) that the transaction is The organization should also keep as defined under section 267(b) or a prohibited tax shelter transaction. The copies of any returns it has filed. They 707(b)) has the right to a full refund or excise tax, in the amount of $20,000, is help in preparing future returns and in partial refund of fees if all or part of the assessed for each approval or other act making computations when filing an intended tax consequences from the causing the organization to be a party amended return.

transaction are not sustained. It also to the prohibited tax shelter transaction. Rounding off to whole dollars. The includes a transaction for which fees To report this tax, file Form 4720. organization may round off cents to are contingent on the realization of tax whole dollars on the return and benefits from the transaction. For schedules. If the organization does exceptions and other details, see X. Requirements for a round to whole dollars, it must round all Regulations section 1.6011-4(b)(4) and Properly Completed Form amounts. To round, drop amounts Rev. Proc. 2007-20, 2007-7 I.R.B. 517. 990 or Form 990-EZ under 50 cents and increase amounts

from 50 to 99 cents to the next dollar. Entity-Level Excise Tax Public inspection. In general, all For example, $1.39 becomes $1 and For Form 990 and 990-EZ filers, section information the organization reports on $2.50 becomes $3. 4965(a)(1) imposes an entity level or with its Form 990, or Form 990-EZ, If the organization has to add two or excise tax for each taxable year that including attachments, will be available more amounts to figure the amount to the tax-exempt entity is a party to a for public inspection. Note, however, enter on a line, include cents when prohibited tax shelter transaction and the public inspection rules for the

Schedule B (Form 990, 990-EZ, or adding the amounts and round off only has net income or proceeds attributable the total. to the transaction which are properly 990-PF), a required attachment for

allocable to that taxable year. The organizations that file Form 990 or Completing all lines. Unless the

amount of the excise tax depends on Form 990-EZ. Make sure the forms and organization is permitted to use certain

whether the tax-exempt entity knew or attachments are clear enough to DOL forms or Form 5500 as partial

had reason to know that the transaction photocopy legibly. substitutes for Form 990, or Form

was a prohibited tax shelter transaction Signature. 990-EZ (see General Instruction F), do To make the return

at the time it became a party to the not leave any applicable lines blank or complete, an officer of the organization transaction. attach any other forms or schedules authorized to sign it must sign in the instead of entering the required space provided. For a corporation, or To figure and report the excise tax information on the appropriate line on association, this officer may be the imposed on a tax-exempt entity for Form 990 or Form 990-EZ. president, vice president, treasurer, being a party to a prohibited tax shelter assistant treasurer, chief accounting Some parts of the Form 990 (for transaction, file Form 4720. officer, or other corporate or association example, Line 51 or Line 75) require

For more information about this officer, such as a tax officer. A receiver, the organization to acquire information

excise tax including information about trustee, or assignee must sign any from certain persons regarding their

-22- General Instructions for Form 990 and Form 990-EZ
relationships with each other and with Assembling Form 990 or Form needed. If the organization uses

other organizations. The organization is 990-EZ. Before filing the Form 990, or attachments, the attachments must:

not required to provide information Form 990-EZ, assemble the package of 1. Show the form number and tax about such business relationships if it is forms and attachments in the following year; unable to secure the information after order:

making a reasonable effort to obtain it; 2. Show the organization’s name • Form 990 or Form 990-EZ. and EIN; in such case, the organization shall (in • Schedule A (Form 990 or 990-EZ). response to the question) report the The requirement to attach Schedule A 3. Identify clearly the Part or line(s) efforts undertaken. An example of a (Form 990 or 990-EZ) applies to all to which the attachments relate; reasonable effort is for the Form 990 section 501(c)(3) organizations and all preparer or an officer eligible to sign the 4. Include the information required section 4947(a)(1) nonexempt Form 990 to distribute a questionnaire by the form and use the same format charitable trusts that file Form 990 or annually to each officer, director, as the form; Form 990-EZ. trustee, and key employee listed in Part 5. Follow the same Part and line • Schedule B (Form 990, 990-EZ, or V-A; each highest compensated sequence as the form; and 990-PF). employee listed in Schedule A, Part I;

and each highest compensated • Attachments to Form 990 or Form 6. Be on the same size paper as the

professional and other independent 990-EZ. form.

contractor listed in Schedule A, Parts • Attachments to Schedule A (Form

II-A and II-B. The questionnaire should 990 or 990-EZ).

require the name and title, date, and • Attachments to Schedule B (Form signature of each person reporting this 990, 990-EZ, or 990-PF). information. The questionnaire should

contain the pertinent definitions set out Attachments. Use the schedules on

in the instructions. the official form unless more space is

Checklist for a Properly Completed Return

Complete Schedule A (Form 990 or 990-EZ) if the organization is a section 501(c)(3), 501(e), (f), (k), or (n)

organization or a section 4947(a)(1) nonexempt charitable trust.

Complete Schedule A (Form 990 or 990-EZ), Part IV-A, Support Schedule, if the organization is required to

check a box on line 10, 11a, 11b, or 12 of Part IV of Schedule A.

File Form 990 instead of Form 990-EZ if the organization’s gross receipts are $100,000 or more or total assets

at the end of the year are $250,000 or more, or the organization is a sponsoring organization, or controlling

organization under section 512(b)(13).

Indicate the correct tax year in the heading of the form.

Have an officer of the organization sign the return.

Complete all Balance Sheet columns (Part IV (and IV-A and IV-B) of Form 990; Part II of Form 990-EZ).

Indicate “N/A” if a line, column, or Part does not apply. Indicate too, on the applicable line, if a schedule is

attached. Do not substitute another balance sheet instead of completing the Part II Balance Sheet of Form

990-EZ.

Attach all required pages and schedules to the return. Include a list of subordinates if filing a group return.

Double-check the accuracy of the organization’s EIN, tax period, and group exemption number (GEN), if

applicable.

Indicate the correct 501(c) subsection under which the organization is tax-exempt. If there has been a change,

attach a copy of the latest determination letter. If the letter is unavailable, attach a description of the

organization’s primary exempt purpose.

Be aware that the Form 990, Form 990-EZ, the Schedule A (Form 990 or 990-EZ), and the attachments to be

filed with these forms, are publicly disclosable. Note, however, the specific public inspection rules in the

Instructions for Schedule B (Form 990, 990-EZ, or 990-PF).

General Instructions for Form 990 and Form 990-EZ -23-
Section 501(c)(3) organizations required to complete lines 26, 27, or 28 of Schedule A (Form 990 or 990-EZ)

must prepare lists for their own records to substantiate amounts on those lines. These lists are not to be filed

with the return.

Do not check the Termination box in the heading of the Form 990 or 990-EZ unless the organization has

ceased operations.

or if this is the first time the organization the third party’s name and street

is filing either a Form 990 or a Form address or P.O. box.

Specific Instructions for 990-EZ. Include the suite, room, or other unit

If the tax-exempt organization has number after the street address. If the Form 990 changed its name, attach the following Post Office does not deliver mail to the

See also the General Instructions that documents: street address and the organization has apply to both Form 990 and Form a P.O. box, show the box number

990-EZ. IF the instead of the street address.

organization is . THEN attach . . . Contents Page For foreign addresses, enter

information in the following order: city, Completing the Heading of Form 990 . . . . . 24 A corporation Amendments to the articles of province or state, and the name of the incorporation with proof of Part I—Revenue, Expenses, and Changes in filing with the state of country. Follow the foreign country’s Net Assets or Fund Balances . . . . . . . . . . 25 incorporation. practice in placing the postal code in

Part II—Statement of Functional Expenses 32 the address. Please do not abbreviate

Part III—Statement of Program Service A trust Amendments to the trust the country name.

Accomplishments . . . . . . . . . . . . . . . . . . 36 agreement signed by the If a change in address occurs after trustee.

Part IV—Balance Sheets . . . . . . . . . . . . . 36 the return is filed, use Form 8822 to

Parts IV-A and IV-B—Reconciliation An association Amendments to the articles of notify the IRS of the new address.

Statements . . . . . . . . . . . . . . . . . . . . . . 40 association, constitution,

bylaws, or other organizing Item D. Employer Identification Part V-A—Current Officers, Directors, document, with the signatures Number Trustees, and Key Employees . . . . . . . . . . 40 of at least two officers/ The organization should have only one Part V-B—Former Officers, Directors, members. federal employer identification number Trustees, and Key Employees That Received

Compensation or Other Benefits . . . . . . . . 42 (EIN). If it has more than one and has Final return and Amended return. not been advised which to use, notify Part VI—Other Information . . . . . . . . . . . . 43 Organizations should file final returns the:

Part VII—Analysis of Income-Producing when they cease to be section 501(a) Activities . . . . . . . . . . . . . . . . . . . . . . . . 50 Department of the Treasury organizations or section 527 Internal Revenue Service Center Part VIII—Relationship of Activities to the organizations; for example, when they

Accomplishment of Exempt Purposes . . . . . 51 Ogden, UT 84201-0027 cease operations and dissolve. See the

Part IX—Information Regarding Taxable instructions for line 79 that discuss State what numbers the organization

Subsidiaries and Disregarded Entities . . . . . 52 liquidations, dissolutions, terminations, has, the name and address to which

Part X—Information Regarding Transfers or substantial contractions. each number was assigned, and the

Associated With Personal Benefit Contracts 52 If the return is an amended return, address of its principal office. The IRS

Part XI —Information Regarding Transfers to will advise the organization which check the box. There are amended

and From Controlled Entities . . . . . . . . . . . 52 number to use. return requirements when filing with a

Exclusion Codes . . . . . . . . . . . . . . . . . . . 53 state. See General Instructions E and • A section 501(c)(9) voluntary

J. employees’ beneficiary association

must use its own EIN and not the EIN Application pending. If the Completing the Heading of of its sponsor. organization’s application for exemption • A disregarded entity, as described in Form 990 is pending, check this box and Regulations sections 301.7701-1 complete the return. The instructions that follow are keyed to through 301.7701-3, however, may use items in the heading for Form 990. Item C. Name and Address the EIN of the organization in Part IX if

the disregarded entity does not have its Item A. Accounting Period If the organization operates under a own EIN. See General Instruction A File the 2007 return for calendar year name different from its legal name, give and the instructions for Part IX. the legal name of the organization but 2007 and fiscal years that begin in

2007 and end in 2008. For a fiscal year identify its alternate name, after the Item E. Telephone Number legal name, by writing “aka” (also return, fill in the tax year space at the Enter a telephone number of the known as) and the alternate name of top of page 1. See General Instruction organization that members of the public G the organization. However, if the for additional information on and government regulators may use organization has changed its name, accounting periods and methods. during normal business hours to obtain follow the instructions for Name change information about the organization’s Item B. Checkboxes in Item B — Checkboxes. finances and activities. If the

Address change, name change, and If the organization receives its mail in organization does not have a telephone

initial return. Check the appropriate care of a third party (such as an number, enter the telephone number of

box if the organization changed its accountant or an attorney), enter on the an organization official who can provide

address since it filed its previous return, street address line “C/O” followed by such information.

-24- Specific Instructions for Form 990
501(c)(15) Organizations in General If . . . . . . . A section 501(c)(7), (8), or (10) Item F. Accounting Method Instruction A. Do not use the section organization did not receive any An organization must indicate the contribution or bequest for use method of accounting used in preparing 501(c)(15) definition of gross receipts to exclusively for religious, figure if the organization’s gross this return. See General Instruction G. charitable, scientific, literary, or receipts are normally $25,000 or less. educational purposes, or the Item G. Website prevention of cruelty to children or

Show the organization’s website animals (and did not receive any Item L. Figuring Gross Receipts address if a website is available. noncharitable contributions of

Otherwise, write “N/A” (not applicable). The organization’s gross receipts are $5,000 or more as described

Consider adding the organization’s the total amount it received from all below under general rule),

sources during its annual accounting email address to its website. Then .... The organization should check the period, without subtracting any costs or box in item M to certify that it is Item H. Group Return, etc. expenses. See the gross receipts not required to attach Schedule B discussion in General Instruction B. See General Instruction R. (Form 990, 990-EZ, or 990-PF). Attach the

required list, if applicable, or the Otherwise Complete and attach Schedule B

organization will be contacted later for To figure if a section 501(c)(15) (Form 990, 990-EZ, or 990-PF).

the missing information. organization qualifies for tax All Other Form 990 or Form 990-EZ CAUTION exemption for the year, see the

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Item I. Group Exemption Organizations (General rule) definition of gross receipts for section Number 501(c)(15) purposes under Section If ....... The organization did not show as The group exemption number (GEN) is 501(c)(15) Organizations in General part of line 1e of the Form 990, a

a number assigned by the IRS to the Instruction A. Do not use the section contribution of $5,000 or more

central/parent organization of a group 501(c)(15) definition of gross receipts to from any one contributor,*

that has a group ruling. figure the amount to enter here. Then .... The organization should check the

Enter the four-digit group exemption box in item M to certify that it is

number if “Yes” was checked in item not required to attach Schedule B Item M. Schedule B (Form 990, H(a) and H(d). Contact the central/ (Form 990, 990-EZ, or 990-PF). 990-EZ, or 990-PF) parent organization if the organization Otherwise Complete and attach Schedule B Whether or not the organization enters is unsure of the GEN assigned. (Form 990, 990-EZ, or 990-PF). any amount on line 1e of Form 990, the * Total a contributor’s gifts of $1,000 or more to

Item J. Organization Type organization must either check the box determine if a contributor gave $5,000 or more. Do

not include smaller gifts. If the organization is exempt under in item M or attach Schedule B (Form

section 501(c), check the applicable 990, 990-EZ, or 990-PF). The

box and insert, within the parentheses, organization return will be incomplete if

the number that identifies the type of it does not either check the box in item Part I. Revenue, Expenses, section 501(c) organization the filer is. M or file Schedule B (Form 990, and Changes in Net Assets See the chart in General Instruction C. 990-EZ, or 990-PF). See the

The term section 501(c)(3) includes Instructions for Schedule B (Form 990, or Fund Balances

organizations exempt under sections 990-EZ, or 990-PF), for more All organizations filing Form 990 with

501(e), (f), (k), and (n). Check the information. the IRS or any state must complete

applicable box if the organization is a Part I. Some states that accept Form

section 527 political organization. See 990 in place of their own forms require Contributor includes individuals, General Instruction U. additional information. fiduciaries, partnerships,

If the organization is a section corporations, associations,

TIP

Line 1. In General 4947(a)(1) nonexempt charitable trust, trusts, and exempt organizations.

check the applicable box. Note also the

discussion regarding Schedule A (Form Contributions, Gifts, Grants,

990 or 990-EZ) and Form 1041 in and Similar Amounts Received

General Instruction D and the Guidelines for Meeting the • Report the amount contributed to instructions to line 92 of Form 990. Requirements for Schedule B donor advised funds on line 1a.

(Form 990, 990-EZ, or 990-PF) • On lines 1b through 1d, report Item K. Gross Receipts of amounts received as voluntary $25,000 or Less Section 501(c)(3) org. meeting the 1/3 contributions (other than contributions Check this box if the organization is not support test of 170(b)(1)(A) to donor advised funds; that is, a section 509(a)(3) supporting payments, or the part of any payment, If . . . . . . . A section 501(c)(3) organization organization and its gross receipts are for which the payer (donor) does not that met the 1/3 support test of the normally not more than $25,000, but regulations under 509(a)(1)/ receive full retail value (fair market the organization chooses to file Form 170(b)(1)(A) did not receive a value) from the recipient (donee) 990. If the organization chooses to file contribution of the greater of organization. Form 990, be sure to file a complete $5,000 or 2% of the amount on • Report gross amounts of return. For a discussion on gross line 1e of Form 990, from any one contributions collected in the charity’s receipts for this purpose, see General contributor,* name by fundraisers. Instruction B. Also, see General Then .... The organization should check the • Report all expenses of raising Instruction X for a discussion on a box in item M to certify that it is contributions in Fundraising, column complete return. not required to attach Schedule B (D), Part II, and on line 15 of Part I. The (Form 990, 990-EZ, or 990-PF). To figure if a section 501(c)(15) organization must show on line 30 Otherwise Complete and attach Schedule B organization qualifies for tax professional fundraising fees relating to (Form 990, 990-EZ, or 990-PF). CAUTION exemption for the year, see the the gross amounts of contributions

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definition of gross receipts for section Section 501(c)(7), (8), or (10) Organization collected in the charity’s name by

501(c)(15) purposes under Section fundraisers.

Specific Instructions for Form 990 -25-
• Report the value of noncash 67-246, 1967-2 C.B. 104, explains this Donations of Services and the

contributions at the time of the principle in detail. See also the Lines 9a Use of Property Are Not donation. For example, report the gross through 9c instructions and Pub. 526. Contributions value of a donated car at the time the Report the expenses that relate In Part I, do not include as contributions car was received as a donation. directly to the sale of the book on line on line 1 the value of services donated • For grants, see Grants That Are

Equivalent to Contributions 9b. Report the expenses of raising to the organization, or items such as , on the contributions (shown within the the free use of materials, equipment, or following page. parentheses on line 9a and again on facilities. See the instructions for Part III

Reporting for line 1, in accordance line 1b) in Fundraising, column (D), Part and for Part VI, line 82, for the optional with SFAS 116, is acceptable for Form II, and on line 15 of Part I. reporting of such amounts in Parts III 990 purposes, but not required by IRS. and VI. However, see At the time of any solicitation or General Instruction E.

payment, organizations that are Any unreimbursed expenses of An organization that receives a grant eligible to receive tax-deductible officers, employees, or volunteers do CAUTION

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to be paid in future years should, contributions should advise patrons of not belong on the Form 990 or Form according to SFAS 116, report the the amount deductible for federal tax 990-EZ. See the discussions for grant’s present value on line 1. purposes. See General Instruction L. charitable contributions and employee Accruals of present value increments to business expenses in Pub. 526 and the unpaid grant should also be Contributions Can Arise From Pub. 463, respectively. reported on line 1 in future years. Special Events When Items of

Contributions Can Arise From Only Nominal Value Are Given Grants That Are Equivalent to

Special Events When an Excess or Offered Contributions

Payment Is Received for Items If an organization offers goods or Grants that encourage an organization

Offered services of only nominal value through receiving the grant to carry on

a special event or distributes free, programs or activities that further its Fundraising activities relate to soliciting unordered, low-cost items to patrons, exempt purposes are grants that are and receiving contributions. However,

special fundraising activities such as report the entire amount received for equivalent to contributions. Report them

such benefits as a contribution on line on line 1. The grantor may require that dinners, door-to-door sales of

merchandise, carnivals, and bingo 1b (direct public support). Report all the programs of the grant recipient related expenses in Fundraising, (grantee) conform to the grantor’s own games can produce both contributions column (D), Part II. See General policies and may specify the use of the and revenue. Instruction L for a definition of benefits grant, such as use for the restoration of If a buyer at such a special event that have a nominal or insubstantial a historic building or a voter registration pays more for goods or services than value. drive.

their retail value, report, as a

contribution, both on line 1b and on line Section 501(c)(3) Organizations A grant is still equivalent to a

9a (within the parentheses), any Correctly dividing gross receipts from contribution if the grant recipient

amount paid in excess of the retail special events into revenue and provides a service or makes a product

value. This situation usually occurs contributions is especially important for that benefits the grantor incidentally.

when organizations seek public support a section 501(c)(3) organization that See Examples in the line 1d

through solicitation programs that are in claims public support as described in instructions. However, a grant is a

part special events or activities and are section 509(a)(1)/170(b)(1)(A)(vi) or payment for services, and not a

in part solicitations for contributions. section 509(a)(2). In the public support contribution, if the grant requires the

The primary purpose of such grant recipient to provide that grantor computations of these Code sections,

solicitations is to receive contributions the revenue portion of gross receipts with a specific service, facility, or

and not to sell the merchandise at its may be (a) excluded entirely, (b) product rather than to give a direct

retail value even though this might treated as public support, or (c) if the benefit primarily to the general public or

produce a profit. revenue represents unrelated trade or to that part of the public served by the

Example. An organization business income, treated as nonpublic organization. In general, do not report

support. as contributions any payments for a announces that anyone who contributes service, facility, or product that primarily at least $40 to the organization can Section 501(c)(3) organizations must give some economic or physical benefit choose to receive a book worth $16 separate gross receipts from special to the payer (grantor). retail value. A person who gives $40, events into revenue and contributions

and who chooses the book, is really when preparing the Support Schedule Example. A public interest purchasing the book for $16 and also in Part IV-A of Schedule A (Form 990 organization described in section making a contribution of $24. The or 990-EZ). 501(c)(4) makes a grant to another contribution of $24, which is the organization to conduct a nationwide difference between the buyer’s Section 501(c)(9), (17), and (18) survey to determine voter attitudes on payment and the $16 retail value of the Organizations issues of interest to the grantor. The book, would be reported on line 1b and These organizations provide grantor plans to use the results of the again on line 9a (within the participants with life, sickness, accident, survey to plan its own program for the parentheses). The revenue received welfare, and unemployment insurance, next 3 years. Under these ($16 retail value of the book) would be pensions, or similar benefits, or a circumstances, since the survey serves reported in the right-hand column on combination of these benefits. When the grantor’s direct needs and benefits line 9a. such an organization receives the grantor more than incidentally, the

If a contributor gives more than $40, payments from participants or their grant to the organization making the

that person would be making a larger employers to provide these benefits, survey is not a contribution. The grant

contribution, the difference between the report the payments on line 2 as recipient should not report the grant as

book’s retail value of $16 and the program service revenue, rather than a contribution but should report it on

amount actually given. Rev. Rul. on line 1 as contributions. line 2 as program service revenue.

-26- Specific Instructions for Form 990
Treat research to develop products c. All grants from the fund or donee’s name in a sales promotion

for the payer’s use or benefit as directly account are awarded on an objective campaign. In such a campaign, the

serving the payer. However, generally, and nondiscriminatory basis according donor advertises that it will contribute a

basic research or studies in the to a procedure approved in advance by certain dollar amount to the donee

physical or social sciences should not the board of directors of the sponsoring organization for each unit of a particular

be treated as serving the payer’s organization. The procedure must be product or service sold or for each

needs. designed to ensure that all grants meet occurrence of a specific type.

See Regulations section the requirements of sections Contributions received through

1.509(a)-3(g) to determine if a grant is 4945(g)(1), (2), or (3). special events. Report contributions

a contribution reportable on line 1b or a received through special events on line

revenue item reportable elsewhere on Line 1b. Direct Public Support 1b. See the preceding line 1

Form 990. instructions and the instructions for Contributions, gifts, grants, and Lines 9a through 9c. similar amounts received. Enter the Line 1a. Contributions to Donor gross amounts of contributions, gifts, Line 1c. Indirect Public Support Advised Funds grants, and bequests that the Enter the total contributions received Complete line 1a only if the organization received directly from the indirectly from the public through organization is a sponsoring public. Do not include any amounts solicitation campaigns conducted by organization that maintains one or more previously reported on line 1a on this federated fundraising agencies and donor advised funds. Enter the gross line. Include: similar fundraising organizations (such amounts of contributions, gifts, grants, • All donated items. For example, a car as a United Way organization and and bequests received for all donor is donated to an organization. certain sectarian federations). These advised funds the organization Immediately after the organization organizations normally conduct maintains. receives the donated car, the fundraising campaigns within a single organization sells the car. The A sponsoring organization is any metropolitan area or some part of a organization includes the value of the organization which: particular state and allocate part of the car as of the time of its receipt as a • Is described in section 170(c), except net proceeds to each participating contribution on line 1b and includes it in for governmental entities described in organization on the basis of the donors’ the total on line 1e as a noncash section 170(c)(1), individual designations and other contribution. • Is not a private foundation as defined factors. • All funds or the entire value of in section 509(a), and noncash items raised by an outside Include on line 1c amounts • Maintains one or more donor advised contributed by other organizations fundraiser in a charity’s name and not funds. just the amount actually received by the closely associated with the reporting

organization. This includes In general, a donor advised fund is a charity. For example, a corporation contributions received from a parent fund or account: solicits and sells cars in a charity’s

name. When a car is received, its entire organization, subordinate, or another 1. Which is separately identified by organization with the same parent. value is reported as a contribution. reference to contributions of a donor or • Amounts received from individuals, National organizations that share in donors; fundraising campaigns conducted by trusts, corporations, estates, and 2. Which is owned and controlled by foundations, or raised by an outside their local affiliates should report the a sponsoring organization; and professional fundraiser. amount they receive on line 1c. 3. For which the donor (or any • Contributions and grants from public Do not include any amounts person appointed or designated by the charities and other exempt previously reported on line 1a on this donor) has or expects to have advisory organizations that are neither line. privileges concerning the distribution or fundraising organizations nor affiliates investment of amounts held in the Line 1d. Government of the filing organization. donor advised funds or accounts • See the instructions for line 1c. Contributions (Grants) because of the donor’s status as a

Membership dues. Report on line 1b The general line 1 instructions, under donor.

membership dues and assessments the heading, Grants That Are

Equivalent to Contributions, earlier, Exception. A donor advised fund that represent contributions from the

public rather than payments for benefits apply to this item in particular. A grant does not include:

or other payment from a governmental received or payments from affiliated 1. Any fund or account that makes organizations. See the instructions for unit is treated as a contribution if its distributions only to a single identified line 3. primary purpose is to enable the donee organization or governmental entity, or to provide a service to, or maintain a 2. Any fund or account for a person Government contributions (grants). facility for, the direct benefit of the described in 3 above that gives advice Report government grants on line 1d if public rather than to serve the direct about which individuals receive grants they represent contributions, or on line and immediate needs of the grantor for travel, study, or other similar 2 (and on line 93(g) of Part VII), if they even if the public pays part of the purposes, if: represent fees for services. See the expense of providing the service or a. The person’s advisory privileges instructions under the heading, Grants facility. are performed exclusively by such That Are Equivalent to Contributions,

earlier and the instructions for line 1d The following are examples of person in their capacity as a committee governmental grants and other member of which all of the committee later.

payments that are treated as members are appointed by the Commercial co-venture. Report contributions. sponsoring organization. amounts contributed by a commercial

b. No combination of persons with co-venture on line 1b as a contribution Examples.

advisory privileges described in 3 received directly from the public. These 1. Payments by a governmental unit

above, or persons related to those in 3 are amounts received by an for the construction or maintenance of

above, directly or indirectly control the organization (donee) for allowing an library or hospital facilities open to the

committee. outside organization (donor) to use the public.

Specific Instructions for Form 990 -27-
2. Payments under government participants, for health and welfare Lines 2 through 11

programs to nursing homes or homes benefits coverage; insurance premiums

for the aged in order to provide health Do not enter any contributions received by a fraternal beneficiary

care or other services to their residents. on lines 2 through 11. Enter all society; and registration fees received

CAUTION contributions on line 1. If the in connection with a meeting or !

3. Payments to child placement or organization enters contributions on convention. child guidance organizations under

government programs serving children lines 2 through 11, it will be unable to Program-related investments.

in the community. The general public complete Part VII correctly. Line 105 Program service revenue also includes

gets the primary and direct benefit from (the sum of amounts entered in income from program-related

these payments and any benefit to the columns (B), (D), and (E) for lines 93 investments. These investments are

governmental unit itself would be through 103 of Part VII, Analysis of made primarily to accomplish an

indirect and insubstantial as compared Income-Producing Activities) should exempt purpose of the investing

to the public benefit. match the total of amounts entered for organization rather than to produce correlating lines 2 through 11 of Part I. income. Examples are scholarship See the instructions for Part VII. loans and low interest loans to

Do not include any amounts charitable organizations, indigents, or Line 2. Program Service previously reported on line 1a on this victims of a disaster. Revenue Including Medicare, line. Medicaid Payments and Rental income from an exempt

function is another example of Government Fees and Line 1e. Total Contributions, program-related investment income. Contracts When an organization rents to an etc. Enter the total of program service unaffiliated exempt organization at less Enter the total of amounts reported on revenue (exempt function income) as than fair rental value for the purpose of lines 1a through 1d. In the entry spaces reported in Part VII, lines 93(a) through aiding that tenant’s exempt function, in the description column for line 1e, (g), columns (B), (D), and (E). Program the reporting organization should report enter the separate totals for cash and services are primarily those that form such rental income as program service noncash contributions, gifts, grants, and the basis of an organization’s revenue on line 2. See also the similar amounts received. The total of exemption from tax. For a more instructions for line 6a. For purposes of the two amounts must equal the total detailed description of program this return, report all rental income from on line 1e. services, refer to the instructions for an affiliated organization on line 2.

Part II, column (B), Program services. Unrelated trade or business Report as cash contributions, only Example. A hospital would report activities. Unrelated trade or business contributions received in the form of on this line all of its charges for medical activities (not including any special cash, checks, money orders, credit card services (whether to be paid directly by events or activities) that generate fees charges, wire transfers, and other the patients or through Medicare, for services may also be program transfers and deposits to a cash Medicaid, or other third-party service activities. A social club, for account of the organization. If the reimbursement), hospital parking lot example, should report as program organization records pledges as fees, room charges, laboratory fees for service revenue the fees it charges contributions, at the time the pledges hospital patients, and related charges both members and nonmembers for the

are made (rather than when the for services. use of its tennis courts and golf course. pledges are collected), include as cash Insurance premiums. A section Sales of inventory items by contributions, only those pledges 501(c)(15) organization would report on hospitals, colleges, and universities. actually collected in cash during the this line all of its insurance premiums Books and records maintained in year and pledges uncollected at the received. The amount reported here for accordance with generally accepted end of the year that are reasonably insurance premiums should correlate accounting principles for hospitals, expected to be paid in cash in a later with the amounts reported on line 93, colleges, and universities are more year. columns (B), (D), and (E). specialized than books and records

Program service revenue. Program maintained according to those Report all other contributions, as service revenue includes income accounting principles for other types of noncash contributions in the space earned by the organization for providing organizations that file Form 990. provided. Be sure to include as a a government agency with a service, Accordingly, hospitals, colleges, and noncash contribution donated items like facility, or product that benefited that universities may report, as program cars and clothing valued as of the time government agency directly rather than service revenue on line 2, sales of

of their receipt even if these items were benefiting the public as a whole. See inventory items otherwise reportable on made available for sale immediately the line 1d instructions for reporting line 10a. In that event, show the

after they were received. See General guidelines when payments are received applicable cost of goods sold as

Instruction L and Schedule B (Form from a government agency for providing program service expense on line 13 of

990, 990-EZ, or 990-PF), and the a service, facility, or product for the Part I and in column (B) of Part II. All

instructions for lines 1 and 1b for a primary benefit of the general public. other organizations, however, should

discussion of noncash contributions. Program service revenue not report sales of inventory items on also Noncash contributions do not include line 2. includes: tuition received by a school; donated services, which may be revenue from admissions to a concert Line 3. Membership Dues and reported on line 82 and in the narrative or other performing arts event or to a section of Part III. Assessments museum; royalties received as author Enter members’ and affiliates’ dues and of an educational publication distributed

Schedule of Contributors. Attach assessments that are not contributions. by a commercial publisher; interest

Schedule B (Form 990, 990-EZ, or income on loans a credit union makes Dues and assessments received that

990-PF). See General Instruction L and to its members; payments received by a compare reasonably with available

the Specific Instructions for Completing section 501(c)(9) organization from benefits. When dues and

the Heading of Form 990, Item M. participants, or employers of assessments are received that

-28- Specific Instructions for Form 990
compare reasonably with membership assets (such as program-related Line 6a. Gross Rents

benefits received, report such dues and investments and fixed assets used by Enter on line 6a the rental income assessments on line 3. the organization in its related and received for the year from investment unrelated activities). Organizations described in section property reportable on line 55. Do not

include on line 6a rental income related On line 8a, for each column, enter 501(c)(5), (6), or (7) generally provide to the reporting organization’s exempt the total gross sales price of all such benefits that have a reasonable function (program service). Report such assets. Total the cost or other basis relationship to dues, although benefits income on line 2. For example, an (less depreciation) and selling to members may be indirect. exempt organization whose exempt expenses and enter the result on line

Dues or assessments received that purpose is to provide low-rental housing 8b. On line 8c, enter the net gain or

exceed the value of available to persons with low income would loss.

membership benefits. Whether or report that rental income as program On lines 8a and 8c, also report not membership benefits are used, service revenue on line 2. Rental capital gains dividends, the dues received by an organization, to income received from an unaffiliated organization’s share of capital gains the extent they are more than the exempt organization is generally and losses from a partnership, and monetary value of the membership considered as unrelated to the reporting capital gains distributions from trusts. benefits available to the dues payer, organization’s exempt purpose and Indicate the source on the schedule

are a contribution that should be reportable on line 6a. However, note an described later.

reported on line 1b. See Rev. Rul. exception given in the instructions for Combine the gain and/or loss figures 54-565, 1954-2 C.B. 95 and Rev. Rul. line 2 when the reporting organization reported on line 8c, columns (A) and 68-432, 1968-2 C.B. 104. aids an unaffiliated organization with its (B) and report that total on line 8d. Do exempt function. Dues received primarily for the not include any unrealized gains or

organization’s support. Only for purposes of completing this losses on securities carried at market If a member return, the reporting organization must value in the books of account. See the pays dues mainly to support the report any rental income received from instructions for line 20. organization’s activities and not to an affiliated exempt organization as obtain benefits of more than nominal For reporting sales of securities on program service revenue on line 2. monetary value, those dues are a Form 990, the organization may use

contribution to the organization Line 6b. Rental Expenses the more convenient average cost basis

includible on line 1b. method to figure the organization’s gain Enter the expenses paid or incurred for or loss. When a security is sold, Examples of membership benefits. the income reported on line 6a. Include compare its sales price with the These include subscriptions to interest related to rental property and average cost basis of the particular publications, newsletters (other than depreciation if it is recorded in the security to determine gain or loss. one about the organization’s activities organization’s books and records. However, generally, for reporting sales only), free or reduced-rate admissions Report in column (B) of Part II Program of securities on Form 990-T, do not use to events the organization sponsors, services any rental expenses allocable the average cost basis to determine the use of its facilities, and discounts on to rental income reportable as program gain or loss. articles or services that both members service revenue on line 2.

Nonpublicly traded securities and and nonmembers can buy. In figuring Line 6c. Net Rental Income or noninventory items. Attach a the value of membership benefits, do (Loss) schedule showing the sale or exchange not include intangible benefits, such as Subtract line 6b from line 6a. Show any of nonpublicly traded securities and the the right to attend meetings, vote or sale or exchange of other assets that loss in parentheses. hold office in the organization, and the are not inventory items. The schedule distinction of being a member of the Line 7. Other Investment should show security transactions organization. Income separately from the sale of other

Enter the amount of investment income assets. Show for each of these assets: Line 4. Interest on Savings and not reportable on lines 4 through 6 and • Date acquired and how acquired, Temporary Cash Investments describe the type of income in the • Date sold and to whom sold, Enter the amount of interest income space provided or in an attachment. • Gross sales price, from savings and temporary cash The income should be the gross • Cost, other basis, or if donated, value investments reportable on line 46. amount derived from investments at time acquired (state which), So-called dividends or earnings reportable on line 56. Include, for • Expense of sale and cost of received from mutual savings banks, example, royalty income from mineral improvements made after acquisition, money market funds, etc., are actually interests owned by the organization. and

interest and should be entered on line However, do not include income from • If depreciable property, depreciation 4. program-related investments. See the since acquisition.

instructions for line 2. Also, do not Publicly traded securities. On the Line 5. Dividends and Interest include unrealized gains and losses on attached schedule, for sales of publicly from Securities investments carried at market value. traded securities through a broker, total

Enter the amount of dividend and See the instructions for line 20. the gross sales price, the cost or other

interest income from equity and debt basis, and the expenses of sale on all Lines 8a through 8d. Gains (or securities (stocks and bonds) of the such securities sold, and report Losses) From Sale of Assets type reportable on line 54. Include lump-sum figures in place of the

amounts received from payments on Other Than Inventory detailed reporting required by the above

securities loans, as defined in section Report, on lines 8a through 8c, all sales paragraph. Publicly traded securities

512(a)(5). Do not include any capital of securities in column (A). Use column include common and preferred stocks,

gains dividends that are reportable on (B) to report sales of all other types of bonds (including governmental

line 8. See the instructions for line 2 for investments (such as real estate, obligations), and mutual fund shares

reporting income from program-related royalty interests, or partnership that are listed and regularly traded in an

investments. interests) and all other noninventory over-the-counter market or on an

Specific Instructions for Form 990 -29-
established exchange and for which amount received that exceeds the retail and lotteries in which a payment of at

market quotations are published or value of the goods or services given. least a specified minimum amount is

otherwise readily available. required for each entry are special Report on line 9b only the expenses events, reportable on line 9, unless the Lines 9a through 9c. Special directly attributable to the goods or prizes awarded have only nominal services the buyer receives from a Events and Activities value. Reporting payments in their special event. Fundraising expenses On the appropriate line, enter the gross entirety as contributions when gifts or attributable to contributions, reported on revenue, expenses, and net income (or services given are nominal in value is both line 1b and line 9a (within the loss) from all special events and discussed above. parentheses), are reportable in Part II, activities, such as dinners, dances, column (D), Fundraising. If the Attached schedule. Attach a

carnivals, raffles, bingo games, other organization includes an expense on schedule listing the three largest gaming activities, and door-to-door line 9b, do not report it again on line fundraising events, as measured by sales of merchandise. 10b or in Part II. Expenses reported on gross receipts. If gaming is conducted,

These activities only incidentally line 10b relate to sales of inventory. treat different types of gaming

accomplish an exempt purpose. Their Expenses reported in Part II, column separately to determine the three

sole or primary purpose is to raise (D), relate to contributions raised largest events. For example, treat bingo

funds that are other than contributions through fundraising. and pull tabs as separate fundraising

to finance the organization’s exempt events. Describe each of these events Example. At a special event, an activities. This is done by offering by listing the type of event and the organization received $100 in gross goods or services that have more than number of occasions that the event receipts for goods valued at $40. The a nominal value (compared to the price occurred and show (for each event): organization entered gross revenue of charged) for a payment that is more $40 on line 9a (in the right-hand 1. Gross receipts, than the direct cost of those goods or column) and entered a contribution of 2. Contributions included in gross services. $60 on both line 1b and line 9a (within receipts (see Special events may

The gross revenue from gaming the parentheses). The contribution of generate both revenue and

activities and other special events must $60 was the difference between the contributions, earlier),

be reported in the right-hand column on gross revenue of $40 and the gross 3. Gross revenue (gross receipts

line 9a without reduction for cash or receipts of $100. less contributions),

noncash prizes, cost of goods sold, 4. Direct expenses, and The expenses directly relating to the compensation, fees, or other expenses. 5. Net income or (loss) (gross sale of the goods would be reported on Check the box for gaming if the revenue less direct expenses). line 9b. However, all expenses of organization conducted directly, or raising contributions would be reported For gaming, direct expenses include: through a promoter, any amount of in column (D), Fundraising, Part II and cash and noncash prizes, gaming during the year. not on line 9b. compensation to bingo callers and Gaming includes, but is not limited For more details about contributions workers, rental of gaming equipment, to: bingo, pull tabs, instant bingo, received through fundraising, and cost of bingo supplies such as pull tab raffles, scratch-offs, charitable gaming deals, etc. contributions and revenue received tickets, break-opens, hard cards, through special events, see the line 1 Include the same information, in total banded tickets, jar tickets, pickle cards, instructions. See also General figures, for all other special events held Lucky Seven cards, Nevada Club Instruction L and its references. that were not among the three largest. tickets, casino nights, Las Vegas Sales or gifts of goods or services of Indicate the type and number of the nights, and coin-operated gambling only nominal value. events not listed individually (for If the goods or devices. Coin-operated gambling services given or offered at special example, three dances and two raffles). devices include slot machines, events have only nominal value, include An example of this schedule of electronic video slot or line games, all of the receipts as contributions on special events might appear in video poker, video blackjack, video line 1b and all of the related expenses columnar form as follows: keno, video bingo, video pull tab

games, etc. as fundraising expenses on line 15 and Special Events (and the

in column (D) of Part II. See General number of occasions that (A) (B) (C) All

Characterizing any required payment the event occurred): # # # Other Total Instruction L for a description of as a donation or contribution on tickets nominal or insubstantial benefits. or on advertising or solicitation Gross Receipts $xx $xx $xx $xx $xx

materials does not affect how such An activity may generate only Less: Contributions xx xx xx xx xx contributions. An activity that payments should be reported on Form Gross Revenue xx xx xx xx xx generates only contributions, such as a 990 or Form 990-EZ. As discussed in Less: Direct Expenses xx xx xx xx xx solicitation campaign by mail, is not a the instructions for line 1, the amount of special event and should not be Net Income or (Loss) $xx $xx $xx $xx $xx the contribution is the excess of the reported on line 9. amount paid over the retail value of the If the organization uses the above goods or services received by the Contributions from such an activity schedule, report the total for payer. See also Pub. 526. are reportable on line 1, and the related Contributions on line 1b of Form 990

Special events may generate both fundraising expenses are reportable in and on line 9a (within the parentheses).

revenue and contributions. Special column (D), Part II. Report the totals for Gross Revenue, in

events sometimes generate both The proceeds of solicitation the right-hand column, on line 9a;

contributions and revenue. When a campaigns in which the names of Direct Expenses on line 9b; and Net

buyer pays more than the retail value of contributors and other respondents are Income or (Loss) on line 9c.

the goods or services furnished, enter: entered in a drawing for the awarding of Lines 10a through 10c. Gross • As gross revenue, on line 9a (in the prizes (so-called sweepstakes or Profit or (Loss) from Sales of right-hand column), the retail value of lotteries) are contributions, reportable

the goods or services, on line 1, and the related expenses are Inventory

• As a contribution, on both line 1b and fundraising expenses, reportable in Enter the gross sales (less returns and

line 9a (within the parentheses), the column (D) of Part II. However, raffles allowances), cost of goods sold, and

-30- Specific Instructions for Form 990
gross profit or (loss) from the sale of organizations affiliated with (closely services, publications, and materials,

inventory items. These sales do not related to) a reporting agency. from other organizations as Other

include items sold at special events that Payments to affiliated state or expenses on line 43. This is the case,

are reportable on line 9. Sales of for example, if a charitable organization national organizations. Dues paid by inventory items reportable on line 10 pays dues to a trade association the local charity to its affiliated state or are sales of those items the comprised of otherwise unrelated national (parent) organization are organization makes to sell to others or members. usually reported on line 16. Report on buys for resale. Sales of investments this line predetermined quota support Attached schedule. Attach a

on which the organization expected to and dues (excluding membership dues schedule listing the name and address profit by appreciation and sale are not of the type described below) by local of each affiliate that received payments reported here. Report sales of agencies to their state or national reported on line 16. Specify the amount investments on line 8. organizations for unspecified purposes; and purpose of the payments to each

On line 10a, report gross sales that is, general use of funds for the affiliate.

revenue from sales of inventory items, national organization’s own program Properly distinguishing between whether the sales activity is an exempt and support services. payments to affiliates and grants function of the organization or an Purchases from affiliates. Purchases and allocations is especially

TIP

unrelated trade or business. of goods or services from affiliates are important if the organization uses Form On line 10b, report the cost of goods not reported on line 16 but are reported 990 for state reporting purposes. See sold related to the sales of such as expenses in the usual manner. General Instruction E. If the

inventory. The usual items included in Expenses for providing goods or organization uses Form 990 only for cost of goods sold are direct and services to affiliates. In addition to reporting to the IRS, payments to indirect labor, materials and supplies payments made directly to affiliated affiliated state or national organizations consumed, freight-in, and a proportion organizations, expenses incurred in that do not represent membership dues

of overhead expenses. Marketing and providing goods or services to affiliates reportable as Other expenses on line

distribution costs are not included in may be reported on line 16 if: 43 (see instructions, earlier) may be cost of goods sold but are reported in reported either on line 16 or line 22 and 1. The goods or services provided Part II, column (B), Program services. explained in the required attachment. are not related to the program services Attached schedule. In an attached conducted by the organization Line 17. Total Expenses schedule, give a breakdown of items furnishing them (for example, when a Organizations using only column (A) of sold; for example, sales of food, local organization incurs expenses in Part II should enter the total of line 16 souvenirs, electronic equipment, the production of a solicitation film for and line 44 of column (A), Part II, on uniforms, or educational publications. the state or national organization); and line 17. Other organizations should 2. The costs involved are not Line 11. Other Revenue enter the total of lines 13 through 16. connected with the management and Enter the total amount from Part VII, Organizations using Form 5500 or an general or fundraising functions of the approved DOL form as a partial lines 103(a) through (e) (Other reporting organization. For example, substitute for Form 990 should enter revenue), columns (B), (D), and (E). when a local organization gives a copy This figure represents the total income the total expense figure from Form of its mailing list to the state or national from all sources not covered by lines 1 5500, or from the required reconciliation organization, the expense of preparing schedule if Form LM-2 or LM-3 is used. through 10 of Part I. Examples of the copy provided may be reported on See General Instruction F. income includible on line 11 are interest line 16, but not expenses of preparing on notes receivable not held as and maintaining the local organization’s Line 18. Excess or (Deficit) for investments or as program-related master list. the Year investments (defined in the line 2

instructions); interest on loans to Enter the difference between lines 12 Federated fundraising agencies.

officers, directors, trustees, key and 17. If line 17 is more than line 12, These agencies (see the instructions

employees, and other employees; and enter the difference in parentheses. for line 1c) should include in their own

royalties that are not investment income support the full amount of contributions Line 19. Net Assets or Fund

or program service revenue. received in connection with a Balances, Beginning of Year solicitation campaign they conduct, Lines 13 through 15—Program Enter the balance at the beginning of even though donors designate specific Services, Management and the year as reported in column (A) of agencies to receive part or all of their General, and Fundraising line 73 (or from Form 5500 or an individual contributions. These

Expenses approved DOL form if General fundraising organizations should report Instruction F applies). The balance at the allocations to participating agencies Section 4947(a)(1) nonexempt the beginning of the year for line 19 as grants and allocations (line 22b) and charitable trusts and section was the end of the year balance for line quota support payments to their state 501(c)(3) and (4) organizations. 21 and 73 as reported on the or national organization as payments to Complete Part II and then enter on organization’s prior year return. affiliates (line 16). lines 13 through 15 the appropriate Voluntary awards or grants to Line 20. Other Changes in Net amounts from the totals for columns

(B), (C), and (D) reported on line 44, affiliates. Do not report on line 16 Assets or Fund Balances

Part II. voluntary awards or grants made by the Attach a schedule explaining any reporting agency to its state or national All other organizations. All other changes in net assets or fund balances organization for specified purposes. organizations are not required to between the beginning and end of the Report these awards or grants on line complete lines 13 through 15 of the year that are not accounted for by the 22b, Other Grants and Allocations. Form 990. amount on line 18. Amounts to report

Membership dues paid to other here include adjustments of earlier Line 16. Payments to Affiliates organizations. Report membership years’ activity; unrealized gains and

This expense classification is used to dues paid to obtain general losses on investments carried at market

report certain types of payments to membership benefits, such as regular value; and any difference between fair

Specific Instructions for Form 990 -31-
market value and book value of expenses such as occupancy, supplies, Other expenses to report in column

property given as an award or grant. and depreciation of office equipment, (C) include those for meetings of the

See General Instruction G regarding use an appropriate basis for each kind board of directors or similar group;

the reporting of a section 481(a) of cost. However, the organization committee and staff meetings (unless

adjustment to conform to SFAS 116. should report some other shared held in connection with specific

expenses in column (C) only. The program services or fundraising Line 21. Net Assets or Fund column instructions below discuss activities); general legal services; Balances, End of Year allocating expenses. accounting (including patient

Enter the total of lines 18, 19, and 20. accounting and billing); general liability Column (A)—Total This total figure must equal the amount insurance; office management;

reported for the end of the year in For column (A), total each line item of auditing, personnel, and other

column (B) of line 73. columns (B), (C), and (D) in Part II. centralized services; preparation,

Except for expenses the organization publication, and distribution of an

reports on lines 6b, 8b, 9b, 10b, or 16 annual report; and investment Part II—Statement of of Part I, the organization should use expenses (however, report rental

Functional Expenses column (A) to report all expenses the income expenses on line 6b and

organization paid or incurred. program-related income expenses in

In General— column (B)). Column (B)—Program Services The organization should report only Column (A) Program services are mainly those general expenses in column (C). Do not

All organizations must complete column activities that the reporting organization use this column to report costs of

(A) unless they are using an approved was created to conduct and which, special meetings or other activities that

DOL form or Form 5500 as a partial along with any activities commenced relate to fundraising or specific program

substitute for Form 990. See General subsequently, form the basis of the services.

Instruction F. organization’s current exemption from

tax. They may be self-funded or funded Column (D)— Fundraising

Columns (B), (C), and (D) out of contributions, accumulated Fundraising expenses are the total

These columns are optional for all income, investment income, or any expenses incurred in soliciting

organizations except section 4947(a)(1) other source. Fundraising expenses contributions, gifts, grants, etc. Report

nonexempt charitable trusts and section should not be reported as as fundraising expenses all expenses,

501(c)(3) and (4) organizations. Section program-related expenses even though including allocable overhead costs,

4947(a)(1) nonexempt charitable trusts one of the functions of the organization incurred in: (a) publicizing and

and section 501(c)(3) and (4) is to solicit contributions for other conducting fundraising campaigns; (b)

organizations must complete columns organizations. soliciting bequests and grants from

foundations or other organizations, or (B), (C), and (D). Program services can also include government grants reportable on line In Part II, the organization’s the organization’s unrelated trade or 1d; (c) participating in federated expenses are designated by object business activities. For example, fundraising campaigns; (d) preparing classification (for example, salaries, publishing a magazine is a program and distributing fundraising manuals, legal fees, supplies, etc.) and allocated service even though the magazine instructions, and other materials; and into three functions: Program services contains both editorials and articles that (e) conducting special events that (column (B)); Management and general further the organization’s exempt generate contributions reportable on (column (C)); and Fundraising (column purpose and advertising, the income line 1b, in addition to revenue (D)). These functions are explained from which is taxable as unrelated reportable in the right-hand column on below in the instructions for the business income. line 9a. However, report any expenses columns. Do not include in Part II any If an organization receives a grant to that are directly attributable to revenue expense items the organization must do research, produce an item, or shown on line 9a (for example, the report on lines 6b, 8b, 9b, 10b, or 16 in perform a service, either to meet the direct expenses incurred in furnishing Part I. grantor’s specific needs or to benefit the goods or services sold) on line 9b.

For reporting to the IRS only, use the the public directly, the costs incurred Allocating Indirect Expenses organization’s normal accounting represent program service expenses. method to report total expenses in Do not treat these costs as fundraising Colleges, universities, hospitals, and

column (A) and to segregate them into expenses, even if the organization other organizations that accumulate

functions under columns (B), (C), and indirect expenses in various cost reports the grant on line 1 as a (D). However, for state reporting centers (such as the expenses of contribution.

requirements, see General Instructions operating and maintaining the physical

E and G. If the accounting system does Column (C)— Management and plant) that are reallocated to the

not provide for this type of segregation, General program services and other functional

a reasonable method of allocation may areas of the organization in single or Use column (C) to report the be used. The amounts reported should multiple steps may find it easier to organization’s expenses for overall be accurate and the method of report these expenses in the following function and management, rather than allocation documented in the optional manner: for its direct conduct of fundraising organization’s records. activities or program services. Overall First, report the expenses of these

Report, in the appropriate column, management usually includes the indirect cost centers on lines 25

expenses that are directly attributable salaries and expenses of the chief through 43 of column (C), Management

to a particular functional category. In officer of the organization and that and general, along with the expenses

general, allocate expenses that relate officer’s staff. If part of their time is properly reportable in that column.

to more than one functional category. spent directly supervising program Second, allocate the total

For example, allocate employees’ services and fundraising activities, their expenses for each cost center to

salaries on the basis of each salaries and expenses should be columns (B), (C), and (D) (Program

employee’s time. For some shared allocated among those functions. services, Management and general,

-32- Specific Instructions for Form 990
and Fundraising) as a separate item cost center expenses to management Accruals of present value increments to

entry on line 43, Other Expenses. Enter and general. the unpaid grant should also be

the name of the cost center on line 43. reported on line 22 in future years. The above is an example of a If any of the cost center’s expenses are one-step allocation that shows how to to be allocated to the expenses listed in Line 22a. Grants Paid From report the allocation in Part II. This Part I (such as the expenses Donor Advised Funds reporting method would actually be attributable to special events and needed more for multiple step Enter the amount of awards and grants activities), enter these expenses as a allocations involving two or more cost to individuals and organizations paid negative figure in columns (A) and (C). centers. The total expenses of the first from donor advised funds on line 22a.

This prevents reporting the same would be allocated to the other See the line 1a instructions for the

expense in both Parts I and II. If part of functions, including an allocation of part definition of a donor advised fund. See

the total cost center expenses are to be of these expenses to the second cost the line 22 instructions, above, for allocated to columns (B), Program center. The expenses of the second general information on the reporting of services, and (D), Fundraising, enter cost center would then be allocated to grants and allocations paid. See the these expenses as positive amounts in other functions and any remaining cost instructions for line 22b for information

these columns and as single negative centers to be allocated, and so on. The about the required schedule. amounts in column (C), Management greater the number of these cost and general. Do not make any entries centers that are allocated out, the more Line 22b. Other Grants and

in column (A), Total, for these offsetting difficult it is to preserve the object Allocations

entries. classification identity of the expenses of

each cost center (for example, salaries, Do not include on line 22b Example. An organization reports interest, supplies, etc.). Using the amounts paid from a donor in column (C) $50,000 of its actual reporting method described above CAUTION advised fund.

!

management and general expenses avoids this problem. and $100,000 of expenses of an Enter the amount of other awards

indirect cost center that are allocable in The intent of the above and grants (not included on line 22a) to part to other functions. The total of lines instructions is only to facilitate individuals and organizations selected 25 through 43 of column (C) would be CAUTION reporting indirect expenses by by the filing organization. United Way

!

$150,000 before the indirect cost center both object classification and function. and similar fundraising organizations allocations were made. Assume that These instructions do not permit the should include allocations to member

$10,000 (of the $100,000 total allocation to other functions of agencies. expenses of the cost center) was expenses that should be reported as Attached schedule. Attach a allocable to fundraising; $70,000 to management and general expenses. schedule of amounts reported on line various program services; $15,000 to Line 22. Grants and Allocations 22a and a separate schedule for line management and general functions; The following instructions apply to lines 22b as applicable. Any grants or and $5,000 to special events and allocations reported on line 22b that activities. To report this in Part II under 22a and 22b.

were approved during the year, but not this optional method: Report voluntary awards and grants paid by the due date for filing Form 990 1. Indicate the cost center, the to affiliated organizations for specific (including extensions), must be expenses of which are being allocated, (restricted) purposes or projects also on identified and listed separately in the on line 43, as Allocation of (specify) line 22, but not required payments to schedule for line 22b. On the applicable expenses; affiliates reportable on line 16. schedule show: (a) each class of 2. Enter a decrease of $5,000 on Report scholarship, fellowship, and activity; (b) grantee’s name, address, the same line in the column (A), Total, research grants to individuals on line and the amount given; and (c) (in the representing the special event 22. Certain other payments to, or for case of grants to individuals) expenses that were already reported on the benefit of, individuals may be relationship of grantee if related by line 9b in Part I; reportable on line 23 instead. See the blood, marriage, adoption, or

3. Enter $70,000 on the same line in instructions for line 23 for details. employment (including employees’

column (B), Program services; Report only the amount of actual children) to any person or corporation

4. Enter $10,000 on the same line in grants and awards on line 22. Report with an interest in the organization,

column (D), Fundraising; and expenses incurred in selecting such as a creator, donor, director,

recipients, or monitoring compliance trustee, officer, etc. 5. Enter a decrease of $85,000 on

the same line in column (C), with the terms of a grant or award, on On the applicable schedule, classify Management and general, to represent lines 25 through 43. activities in more detail than in such

the allocations to functional areas other In the spaces provided, give broad terms as charitable, educational, than management and general. separate totals for cash and noncash religious, or scientific. For example,

grants and allocations made. Cash identify payments for nursing services,

Line (A) (B) (C) (D) grants include only grants and laboratory construction, or fellowships. 25 – 43a ...... $ 150,000 $ — $150,000 $ — allocations paid by cash, checks, 43b Allocation of If property other than cash is given, money orders, wire transfers, and other the $100,000 also show on the applicable schedule: indirect cost charges against funds on deposit at a

center expenses (a) a description of the property; (b) its financial institution. reported in (C) . . (5,000) 70,000 (85,000) 10,000 book value and how the book value 44 ......... $ 145,000 $ 70,000 $ 65,000 $ 10,000 Reporting for line 22, in accordance was determined; (c) its fair market with SFAS 116, is acceptable for Form value and how the fair market value

After making these allocations, the was determined; (d) the date of the gift. 990 purposes, but not required by IRS.

However, see General Instruction E. column (C) total (line 44, column (C)) If the fair market value of the property

would be $65,000, consisting of the An organization that makes a grant when the organization gave it is the

$50,000 actual management and to be paid in future years should, measure of the award or grant, record

general expense amount and the according to SFAS 116, report the any difference between fair market

$15,000 allocation of the aggregate grant’s present value on line 22. value and book value in the

Specific Instructions for Form 990 -33-
organization’s books of account and on In Part V-A, give the name and expense of the organization (such as

line 20. compensation (if any) of each current interest on loans owed to the

officer, director, trustee, and key disqualified person), but not business Colleges, universities, and primary employee, along with the other expenses paid under an accountable and secondary schools are not required information requested. In Part V-B, give plan or de minimis fringe benefits. Do to list the names of individuals who the name and compensation (if any) of not include on line 25c, amounts were provided scholarships or other each former officer, director, trustee, previously included on lines 25a or 25b. financial assistance whether they are and key employee, along with the other the recipients of federal grant money or For a definition of disqualified information requested. See the Part not. Instead, these organizations must persons, see Disqualified Persons V-A instructions for a definition of key (a) group each type of financial aid under General Instruction P, earlier. employee. provided; (b) indicate the number of Line 26. Salaries and Wages of individuals who received the aid; and Form 941 must be filed to report

(c) specify the aggregate dollar amount. income tax withholding and social Employees Not Included on

security and Medicare taxes. The Lines 25a, b, and c Line 23. Specific Assistance to organization must also file Form 940 to Enter the total amount of employees’ Individuals report federal unemployment taxes salaries and wages, fees, bonuses, Enter the amount of payments to, or for unless the organization is not subject to severance payments, and payments of the benefit of, particular clients or these taxes. See Pub.15 (Circular E) for compensation deferred in a prior year patients, including assistance rendered details. See also the discussion of the to all employees not reported on lines by others at the expense of the filing Trust Fund Recovery Penalty given in 25a, b, or c.

organization. Do not include grants to General Instruction D.

other organizations that select the Line 27. Pension Plan

person(s) to receive the assistance Lines 25a and 25b Contributions Not Included on

available through the use of the grant Enter on line 25a the total Lines 25a, b, and c

funds. For example, report a payment compensation for the tax year for the Enter the employer’s share of to a hospital to cover the medical current officers, directors, trustees, and contributions to qualified and expenses of a particular individual on key employees listed in Part V-A. Enter nonqualified pension plans for the year. line 23, but do not report a contribution on line 25b the total compensation for Do not include contributions to qualified to a hospital to provide some service to the tax year for the former officers, pension plans under section 401(a) for the general public or to unspecified directors, trustees, and key employees current or former officers, directors, charity patients on this line. Also, do not listed in Part V-B. trustees, or key employees, that were include scholarship, fellowship, or Section 501(c)(3) and (c)(4) reported on lines 25a, b, or c. research grants to individuals even organizations and section 4947(a)(1) Complete Form 5500 for the though selected by the grantor non-exempt charitable trusts must organization’s plan and file it as a organization. Report these grants on allocate the total compensation in separate return. If the organization has line 22b, or line 22a, if applicable. column (A) for lines 25a and lines 25b more than one plan, complete a Form Attached schedule. Attach a by functional expense in columns (B), 5500 for each plan. File the form by the schedule showing the total payments (C), and (D). last day of the 7th month after the plan for each particular class of activity, such Example. Allocate the total year ends. See General Instruction D as food, shelter, and clothing for compensation figure of line 25a, column for a discussion of Form 5500. indigents or disaster victims; medical, (A), by functional expenses represented dental, and hospital fees and charges; Line 28. Employee Benefits Not by line 25a, columns (B), (C), and (D). and direct cash assistance to indigents. For instance, if key employee A spent Included on Lines 25a–27

For payments to indigent families, do 90% of her time running a program Enter the organization’s contributions to not identify the individuals. which constitutes the basis of the employee benefit programs (such as

Line 24. Benefits Paid to or for organization’s exempt purpose and insurance, health, and welfare

Members 10% in general management of the programs) that are not an incidental

organization itself, key employee A’s part of a pension plan included on line For an organization that provides compensation should be allocated 90% 27. benefits to members or dependents to column (B), program services, and Do not include contributions on (such as organizations exempt under 10% to column (C), management and behalf of current or former officers, section 501(c)(8), (9), or (17)), attach a general. Conversely, if Director B is not directors, trustees, and key employees, schedule. Show amounts of: (a) death, paid as a member of the board, but is that were included on lines 25a, b, or c. sickness, hospitalization, or disability employed by the organization as a Report expenses for employee events benefits; (b) unemployment part-time fundraiser, all of Director B’s such as a picnic or holiday party on line compensation benefits; and (c) other compensation should be allocated to 28. benefits (state their nature). Do not column (D), fundraising. report the cost of employment-related Line 29. Payroll Taxes benefits the organization provides its Line 25c. Compensation and Enter the amount of federal, state, and officers and employees on this line. Other Distributions to local payroll taxes for the year but only Report those expenses on lines 27 and Disqualified Persons those taxes that are imposed on the 28. Enter the total compensation or other organization as an employer. This

Line 25. Compensation of distributions provided to disqualified includes the employer’s share of social

Current and Former Officers, persons (as defined under section security and Medicare taxes, the

Directors and Certain 4958(f)(1)) and persons described in Federal unemployment tax (FUTA),

section 4958(c)(3) for the year. For a state unemployment compensation Disqualified and Other Persons definition of compensation, see the taxes, and other state and local payroll

Compensation. Compensation instructions for line 25. Distributions taxes. Do not include taxes withheld

includes all forms of income earned or include anything of value provided to a from employees’ salaries and paid to

received for services provided. disqualified person that constitutes an the various governmental units such as

-34- Specific Instructions for Form 990
federal and state income taxes and the expenses as the rental of facilities, Line 35. Postage and Shipping employees’ shares of social security speakers’ fees and expenses, and Enter the total amount of postage, and Medicare taxes. printed materials. Include the parcel delivery, trucking, and other registration fees (but not travel delivery expenses, including the cost of Line 30. Professional expenses) paid for sending any of the shipping materials. Include the costs of Fundraising Fees organization’s staff to conferences, outside mailing services on this line. meetings, or conventions conducted by Enter on line 30 fundraising fees paid to Line 36. Occupancy other organizations. However, do not independent contractors and outside Enter the total amount paid or incurred include on this line the salaries and vendors and suppliers in carrying out for the use of office space or other travel expenses of the reporting fundraising activities. Include on line 30 organization’s own officers, directors, facilities, heat, light, power, and other fundraising expenses such as printing, utilities (other than telephone expenses trustees, and employees who paper, envelopes, postage, mailing list participate. reported on line 34), outside janitorial rental, and equipment rental, incurred in services, mortgage interest, property a fundraising activity conducted by an Line 41. Interest insurance, real estate taxes, and similar independent contractor. Fundraising

expenses. Enter the total interest expense for the expenses also include amounts the year. Do not include any interest organization reimburses to a fundraiser. Occupancy expenses paid or attributable to rental property incurred for program-related income, For purposes of line 30, fundraising (reportable on line 6b) or any mortgage reportable on line 2, are included on activities include gaming, vehicle and interest treated as occupancy expense line 36. Do not subtract rental income other property donation programs, and on line 36. received from renting or subletting special events. Fees and expenses rented space from the amount reported Line 42. Depreciation, incurred by the organization, whether for occupancy expense on line 36. If Depletion, etc. by payment to independent contractors, the activities of the organization’s vendors, or suppliers, or by deduction If the organization records depreciation, tenant are related to the reporting depletion, and similar expenses, enter from proceeds received by the organization’s exempt purpose, report organization, are included on line 30. the total for the year. Include any rental income as program-service depreciation (amortization) of leasehold revenue and allocable occupancy Do not include on line 30 salaries of improvements. The organization is not expenses on line 36. However, if the employees who undertake fundraising required to use the Modified tenant’s activities are not as part of their employment duties. Accelerated Cost Recovery System program-related, report such rental Compensation related to fundraising (MACRS) to compute the depreciation income on line 6a and related rental paid to non-key employees is allocated reported on Form 990 or Form 990-EZ. expenses on line 6b. to line 26, Column (D). Compensation If the organization records depreciation related to fundraising paid to officers, Do not include, as an occupancy using MACRS, attach Form 4562, or a directors, trustees, and key employees expense, depreciation (reportable on schedule showing the same information is allocated to line 25, Column (D). line 42) or any salaries of the reporting required by Form 4562. If the organization’s own employees organization does not use MACRS, In addition to completing line 30, the (reportable on line 26). attach a schedule showing how organization should keep for its Line 37. Equipment Rental and depreciation was computed. permanent records a list of fees and

expenses for each fundraising activity. Maintenance For an explanation of acceptable

Do not include this list with the Enter the cost of renting and methods for computing depreciation,

organization Form 990. maintaining office equipment and other see Pub. 946.

equipment, except for automobile and If the organization claims a Line 31. Accounting Fees truck expenses reportable on lines 35 deduction for depletion, attach a

Enter the total accounting and auditing and 39. schedule explaining the deduction.

fees charged by outside firms and

individuals who are not employees of Line 38. Printing and Line 43. Other Expenses Publications the reporting organization. Show the type and amount of each Enter the printing and related costs of functional expense for which a separate

Line 32. Legal Fees producing the reporting organization’s line is not provided. The organization

Enter the total legal fees charged by own newsletters, leaflets, films, and may report minor miscellaneous

outside firms and individuals who are other informational materials on this expenses as a single total. The total of

not employees of the reporting line. Also include the cost of any minor miscellaneous expenses grouped

organization. Do not include any purchased publications. However, do together on line 43 cannot exceed 5%

penalties, fines, or judgments imposed not include any expenses, such as of the total of all functional expenses on

against the organization as a result of salaries or postage, for which a line 44.

separate line is provided in Part II. legal proceedings. Report those The following expenses must be expenses on line 43, Other expenses. Line 39. Travel categorized and reported separately on

Enter the total travel expenses, line 43: Line 33. Supplies including transportation costs (fares, 1. For health care organizations, Enter the total for office, classroom, mileage allowances, and automobile payments to heath care professionals medical, and other supplies used during expenses), meals and lodging, and per who are not employees of the health the year, as determined by the diem payments. care organization. organization’s normal method of 2. Investment counseling and other accounting for supplies. Line 40. Conferences, professional fees. (Do not include Conventions, and Meetings professional fundraising fees, Line 34. Telephone Enter the total expenses incurred by accounting fees, or legal fees on line

Enter the total telephone, telegram, and the organization in conducting meetings 43; these are reportable on lines 30

similar expenses for the year. related to its activities. Include such through 32.)

Specific Instructions for Form 990 -35-
3. Penalties, fines, and judgments. Organizations answering “Yes” to • Give reasonable estimates for any 4. Unrelated business income taxes. the joint-cost question following line 44 statistical information if exact figures are 5. Insurance and real estate taxes must furnish the relevant financial data not readily available. Indicate that this

not attributable to rental property or in the spaces provided. information is estimated.

reported as occupancy expenses. • Be clear, concise, and complete in the 6. Other expenses the organization An organization conducts a description. Avoid adding an attachment. tracks, not included on other lines of combined educational campaign and Part II. fundraising solicitation when it solicits 3 If part of the total expenses of any 7. Payments of travel or program service consists of grants and contributions (by mail, telephone, entertainment expenses (including allocations reported on line 22a or 22b, broadcast media, or any other means) reimbursements for such costs) for any enter the amount of grants and and includes, with the solicitation, federal, state or local government allocations in the space provided and educational material or other officials (as determined under section include the grants and allocations in the information that furthers a bona fide Expenses column. If the amount of grants 4946(c)) and their family members (as nonfundraising exempt purpose of the and allocations entered includes foreign determined under section 4946(d)). The organization. grants, check the box to the left of the reported total amount should include: entry space for Program services

a. Each separate expenditure expenses. Expenses attributable to providing relating to a government official or • Section 501(c)(3) and (4) organizations, information regarding the organization family member of such official that and section 4947(a)(1) nonexempt itself, its use of past contributions, or its exceeds $200, and charitable trusts, must show the amount planned use of contributions received b. Aggregate expenditures relating of grants and allocations to others and

to a government official or family are not program service expenses and must enter the total expenses for each

member of such official that exceed should not be included in column (B). program service reported.

This is true whether or not the $1,000 for the year. • For all other organizations, completing organization accounts for joint costs in the Program Services Expenses column accordance with the AICPA’s Do not double count (and the Grants and allocations entry) in Statement of Position 98-2, Accounting Part III is optional. expenditures that are described for Costs of Materials and Activities of CAUTION in both a and b above. For

!

Not-for-Profit Organizations and State 4 Attach a schedule that lists the expenditures that are not specifically and Local Government Entities that organization’s other program services. identifiable to a particular individual, the Include Fund Raising. Any method of organization may use any reasonable • The detailed information required for the

allocation method to estimate the cost allocating joint costs to program service four largest services is not necessary for

expenses must be reasonable under this schedule. of the expenditure to an individual. the facts and circumstances of each Amounts not described in a and b • Section 501(c)(3) and (4) organizations,

above may be included in this amount case. Most states with reporting and section 4947(a)(1) nonexempt

or, provided that such amounts do not requirements for charitable and other charitable trusts, however, must show the

exceed 5% of total functional expenses, organizations that solicit contributions expenses attributable to their program

either require or allow the reporting of services. may be grouped with other minor

miscellaneous expenses. The joint costs according to Statement of

Position 98-2 standards. 5 The organization may show the amount organization is responsible for keeping of any donated services, or use of records for all travel and entertainment materials, equipment, or facilities it expenses related to a government received or utilized in connection with a

official regardless of whether reported Part III—Statement of specific program service.

in this amount or as other minor Program Service • Disclose the applicable amounts of any miscellaneous expenses. donated services, etc., on the lines for the

State reporting—miscellaneous Accomplishments narrative description of the appropriate

A program service is a major (usually program service. expenses. Some states that accept

Form 990, or Form 990-EZ, in ongoing) objective of an organization, • Do not include these amounts in the

satisfaction of their filing requirements such as adoptions, recreation for the expense column in Part III.

may require that certain types of elderly, rehabilitation, or publication of • See the instructions for line 82. miscellaneous expenses be itemized journals or newsletters.

regardless of amount. See General

Instruction E. Step Action

Line 44. Total Functional 1 State the organization’s primary exempt Part IV—Balance Sheets

Expenses purpose. All organizations, except those that

Add lines 22a through 43g and enter meet one of the exceptions in General 2 All organizations must describe their the totals on line 44 in columns (A), (B), Instruction F, must complete all of Part exempt purpose achievements for each (C), and (D). Report the total amounts of their four largest program services (as IV and may not submit a substitute

for columns (B), (C), and (D) in Part I, measured by total expenses incurred). If balance sheet. Failure to complete Part

lines 13 through 15. there were four or fewer of such activities, IV may result in penalties for filing an

describe each program service activity. incomplete return. See General Reporting of Joint Costs • Describe program service Instruction K. If there is no amount to

Organizations that included in program accomplishments through measurements report in column (A), Beginning of year,

service expenses (column (B) of Part II) such as clients served, days of care, place a zero in that column.

any joint costs from a combined therapy sessions, or publications issued.

educational campaign and fundraising See General Instruction E for details • Describe the activity’s objective, for both solicitation must disclose how the total this time period and the longer-term goal, on completing a Form 990, or Form

joint costs of all such combined if the output is intangible, such as in a 990-EZ, to be filed with any state or

activities were reported in Part II. research activity. local governmental agency.

-36- Specific Instructions for Form 990
When a schedule is required to be and key employees, and all secured as all other members of the

attached for any line item in Part IV, it is and unsecured loans to such persons, organization.

only for the end-of-year balance sheet on line 50a and in an attached Schedule format. For each

figure reported in column (B). Give the schedule discussed below. Report outstanding loan, or other receivable end-of-year figures for any receivables interest from such receivables on line that must be reported separately, the or depreciable assets and the related 11. For a definition of key employee, attached schedule should show the

allowances for doubtful accounts or see the instructions in Part V-A. following information (preferably in accumulated depreciation reported columnar form): In the required schedule, report each within the description column. receivable separately even if more than 1. Borrower’s name and title,

Line 45. Cash— one loan was made to the same person 2. Original amount,

Non-Interest-Bearing or the same terms apply to all loans. 3. Balance due,

Report salary advances, and other 4. Date of note, Enter the total of non-interest-bearing advances for the personal use and 5. Maturity date, checking accounts, deposits in transit, benefit of the recipient, and receivables 6. Repayment terms, change funds, petty cash funds, or any subject to special terms, or arising from 7. Interest rate, other non-interest-bearing account. Do nontypical transactions, as separate 8. Security provided by the not include advances to employees or loans for each current and former borrower, officers or refundable deposits paid to officer, director, trustee, and key 9. Purpose of the loan, and suppliers or others. employee. For credit unions, report only 10. Description and fair market value

Line 46. Savings and loans, or receivables that are not made of the consideration furnished by the

on the same terms as all other lender (for example, cash—$1,000; or Temporary Cash Investments members of the organization. 100 shares of XYZ, Inc., common Enter the total of interest-bearing Schedule format. stock—$9,000). For each checking accounts, savings and outstanding loan, or other receivable temporary cash investments, such as that must be reported separately, the Line 51. Other Notes and Loans money market funds, commercial attached schedule should show the Receivable paper, certificates of deposit, and U.S. following information (preferably in Treasury bills or other governmental Line 51a. Enter on line 51a the columnar form): obligations that mature in less than 1 combined total of receivables (both

year. Report the income from these 1. Borrower’s name and title, notes and loans) to non-key

investments on line 4. 2. Original amount, employees. Do not include the following 3. Balance due, on line 51a. Line 47. Accounts Receivable 4. Date of note, • Receivables reported on line 50.

Enter the total accounts receivable 5. Maturity date, • Program-related investments.

(reduced by the allowance for doubtful 6. Repayment terms, (Report program-related investments

accounts) from the sale of goods and/or 7. Interest rate, on line 58.)

the performance of services. Report 8. Security provided by the • Notes receivable acquired as

claims against vendors or refundable borrower, investments (report receivables

deposits with suppliers or others here, if 9. Purpose of the loan, and acquired as investments on line 56).

not significant in amount. Otherwise, 10. Description and fair market value For notes and loans that represent report them on line 58, Other assets. of the consideration furnished by the program-related investments (defined in Report any receivables due from lender (for example, cash—$1,000; or the line 2 instructions), report the officers, directors, trustees, or key 100 shares of XYZ, Inc., common interest income on line 2. For all other employees on line 50. Report stock—$9,000). notes and loans receivable included on receivables (including loans and line 51, report the income on line 11. advances) due from other employees Line 50b. Receivables From Line 51b. Enter on line 51b the total on line 51a. Other Disqualified Persons amount of doubtful accounts.

Line 48a. Pledges Receivable Report all receivables due from Notes receivable. Enter the

disqualified persons (as defined under Enter the total pledges receivable amount of all notes receivable not listed

section 4958(f)(1)) and persons recorded as of the beginning and end on line 50 and not acquired as described in section 4958(c)(3)(B) for of the year. Do not include the amount investments. Attach a schedule similar

the year on line 50b and in a required of pledges estimated to be to that requested in the instructions for attached schedule. Do not include on uncollectible. line 50. The schedule should also

line 50b, amounts reported on line 50a. describe the family or business Line 49. Grants Receivable For a definition of disqualified relationship of the borrower to any

Enter the total grants receivable from persons, see Disqualified Person under officer, director, trustee, key employee,

governmental agencies, foundations, General Instruction P, earlier. or substantial contributor of the

and other organizations as of the organization. Report each receivable separately beginning and end of the year. even if more than one loan was made Notes receivable from loans by a Organizations that follow SFAS 116 to the same person or the same terms credit union to its members and

may report the present value of the apply to all loans. Report advances for scholarship loans by a section 501(c)(3) grants receivable as of each balance the personal use and benefit of the organization do not have to be sheet date. itemized. However, identify these loans recipient, and receivables subject to

special terms, or arising from nontypical as such on a schedule and indicate the Line 50a. Receivables From transactions, as separate loans for total amount of such loans that are Current and Former Officers, each disqualified person that is not a outstanding. Directors, Trustees, and Key current or former officer, director, For a note receivable from another Employees trustee, or key employee. For credit organization exempt under the same

Report all receivables due from current unions, report only loans, or receivables paragraph of section 501(c) as the filing

and former officers, directors, trustees, that are not made on the same terms organization, list only the name of the

Specific Instructions for Form 990 -37-
borrower and the balance due. For Line 52. Inventories For Sale Or Attached schedule. On the

example, a section 501(c)(3) attached schedule, give the following Use

organization would have to provide the information for each security held at the Enter the amount of materials, goods, full details of a loan to a section end of the organization’s tax year. and supplies purchased, manufactured 501(c)(4) organization but would have • A description of the security, by the organization, or donated and to provide only the name of the including the value recorded at the time held for future sale or use. borrower and the balance due on a of receipt in the case of donated

note from a loan to another section Line 53. Prepaid Expenses and securities,

501(c)(3) organization. Deferred Charges • The book value of the security, and

Enter the amount of short-term and • The valuation method that was used Loans receivable. Enter the gross (cost or the total book value of all long-term prepayments of expenses amount of loans receivable, less the securities listed on the attachment must attributable to one or more future allowance for doubtful accounts, from agree with the amount entered on line accounting periods. Examples include the normal activities of the filing 54b, column (B)). prepayments of rent, insurance, and organization such as loans by a credit pension costs, and expenses incurred union to its members or scholarship Line 55. Investments—Land, for a solicitation campaign of a future loans by a section 501(c)(3) accounting period. Buildings, and Equipment organization. A schedule of these loans Enter the book value (cost or other is not required. Line 54a. Investments— basis less accumulated depreciation) of

Report loans to current and former Publicly Traded Securities all land, buildings, and equipment held

officers, directors, trustees, and key Enter the book value, which may be for investment purposes, such as rental

employees on line 50. Report loans to market value, of securities held as properties. Attach a schedule listing

non-key employees, vendors, suppliers, investments. Check the appropriate box these fixed assets held as investments

and independent contractors on line 51. to indicate whether the securities are at the end of the year. Show for each

Attach a schedule similar to that called reported at cost or fair market value. item or category listed, the cost or other

for in the instructions for line 50. The Publicly traded securities include basis, accumulated depreciation, and

schedule should also describe the common and preferred stocks, bonds book value. Report the income from

family or business relationship, if any, (including governmental obligations these assets on line 6a.

between the borrower and any officer, such as bonds and Treasury bills), and

director, trustee, key employee, or mutual fund shares that are listed and Line 56. Investments—Other

substantial contributor of the regularly traded in an over-the-counter Enter the amount of all other

organization as defined in section market or on an established exchange investment holdings not reported on 507(d)(2)(A). and for which market quotations are line 54a, 54b, or 55. Attach a schedule, published or otherwise readily listing and describing each of these Family relationships include an available. investments held at the end of the year. individual’s spouse, ancestors, children, Do not report stock holdings that Show the book value for each and

grandchildren, great-grandchildren, represent 5% or more of the indicate whether the investment is listed siblings (whether by whole or half outstanding shares of stock of the at cost or end-of-year market value. blood), and the spouses of children, same class. Instead, report them on Report the income from these assets grandchildren, great-grandchildren, and line 54b. Report dividends and interest on line 7. Do not include

siblings. from these securities on line 5 of Part I, program-related investments. See the

Revenue. instructions for line 58. Business relationships are

employment and contractual Line 54b. Investments—Other Line 57. Land, Buildings, and relationships, and common ownership Securities Equipment of a business where any officers,

directors, or trustees, individually or Enter the book value, which may be Enter the book value (cost or other market value, of securities held as basis less accumulated depreciation) of together, possess more than a 35%

ownership interest in common. investments that are not publicly traded all land, buildings, and equipment

Ownership is voting power in a or that represent 5% or more of the owned by the organization and not held outstanding shares of the same class. corporation, profits interest in a for investment. This includes any

partnership, or beneficial interest in a Check the appropriate box to indicate property, plant, and equipment owned

trust. Employment and contractual whether the securities are reported at and used by the organization in

relationships include relationships cost or fair market value. When valuing conducting its exempt activities. Attach

through a sole proprietorship or securities at fair market value, use a schedule listing these fixed assets

partnership (for example, a borrower is commonly accepted valuation methods. held at the end of the year and (See Regulations section 20.2031-2.) employed by a partnership in which one showing, for each item or category

of the organization’s directors is a Attach a schedule that lists the listed, the cost or other basis,

partner) but not through a corporation securities held at the end of the year. accumulated depreciation, and book

Indicate whether the securities are value. (for example, a borrower is employed

by a corporation in which one of the listed at cost (including the value

organization’s directors is a recorded at the time of receipt in the Line 58. Other Assets, Including

shareholder, director, or officer). case of donated securities) or Program-Related Investments

end-of-year market value. Do not List and show the book value of each See General Instruction X regarding include amounts reported on line 46. category of assets not reportable on due diligence requirements to Securities not publicly traded. lines 45 through 57. If more space is determine business relationships. Securities that are not publicly traded needed, attach a schedule (see

include investments such as stock in a Attachment under General Instruction

Report program-related closely held company whose stock is X) and enter the total book value of all TIP investments on line 58. not available for sale to the general categories of other assets on line 58.

public or which is not widely traded. For interest earned on notes and loans

-38- Specific Instructions for Form 990
that represent program-related amount of the mortgage on line 64a, the IRS does not (see General

investments, report income on line 2. and not on line 64b. For such Instruction E). However, a Form 990, or

One type of asset reportable on line mortgage, include in the above listing, Form 990-EZ, return prepared in

the maturity date of the debt, accordance with SFAS 117 will be 58 is program-related investments. repayment terms, interest rate, and any acceptable to the IRS. These are investments made primarily security provided by the organization. to accomplish an exempt purpose of Organizations that follow SFAS 117. the filing organization rather than to Line 64a does not, however, refer to If the organization follows SFAS 117, produce income. situations where the organization only check the box above line 67. Classify

has a contingent liability, as it would if it and report net assets in three groups— Line 59. Total Assets were a guarantor of tax-exempt bonds unrestricted, temporarily restricted, and Enter the total of lines 45 through 58. issued by a related entity. Contingent permanently restricted—based on the The amounts on line 59 must equal the liabilities, such as those that arise from existence or absence of donor-imposed amounts on line 74 for both the guarantees, must be included as an restrictions and the nature of those

beginning and end of the year. entry in the separately attached restrictions. Show the sum of the three

schedule required for line 64a. classes of net assets on line 73. On line Line 60. Accounts Payable and

Attachment. For all such bonds and 74, add the amounts on lines 66 and 73 Accrued Expenses to show total liabilities and net assets. obligations outstanding at any time Enter the total of accounts payable to This figure should be the same as the during the year, attach a schedule suppliers and others and accrued figure for Total assets on line 59. showing for each separate issue: expenses, such as salaries payable, • The purpose of the issue, accrued payroll taxes, and interest Line 67. Unrestricted • The amount of the issue outstanding, payable. Enter the balances per books of the and

unrestricted class of net assets. Line 61. Grants Payable • The unexpended bond proceeds, if Unrestricted net assets are neither any. Enter the unpaid portion of grants and permanently restricted nor temporarily awards that the organization has made Also, show if any portion of any bond restricted by donor-imposed a commitment to pay other financed facility was used by a third stipulations. All funds without organizations or individuals, whether or party (other than a governmental unit or donor-imposed restrictions must be not the commitments have been a Section 501(c)(3) organization). If so, classified as unrestricted, regardless of communicated to the grantees. list the percentage of space used by the existence of any board designations the third party. Line 62. Deferred Revenue or appropriations.

Include revenue that the organization Line 64b. Mortgages and Other Line 68. Temporarily Restricted has received but not yet earned as of Notes Payable Enter the balance per books for the the balance sheet date under its Enter the amount of mortgages and temporarily restricted class of net method of accounting. other notes payable at the beginning assets. Donors’ temporary restrictions

Line 63. Loans From Officers, and end of the year. Attach a schedule may require that resources be used in a showing, as of the end of the year, the Directors, Trustees, and Key later period or after a specified date total amount of all mortgages payable Employees (time restrictions), or that resources be and, for each nonmortgage note used for a specified purpose (purpose Enter the unpaid balance of loans payable, the name of the lender and restrictions), or both. received from current and former the other information specified in items

officers, directors, trustees, and key 2 through 10 of the instructions for line Line 69. Permanently Restricted employees. See the instructions for 50a. The schedule should also identify Enter the total of the balances for the Part V-A for the definition of key the relationship of the lender to any permanently restricted class of net employee. For loans outstanding at the officer, director, trustee, or key assets. Permanently restricted net end of the year, attach a schedule that employee of the organization. assets are (a) assets, such as land or shows, for each loan, the name and works of art, donated with stipulations title of the lender and the information Line 65. Other Liabilities that they be used for a specified specified in items 2 through 10 of the List and show the amount of each purpose, be preserved, and not be sold instructions for line 50a. liability not reportable on lines 60 or (b) assets donated with stipulations through 65. Attach a separate schedule Line 64a. Tax-Exempt Bond that they be invested to provide a if more space is needed. permanent source of income. The latter Liabilities

Lines 67 through 69. Net Assets result from gifts and bequests that Enter the amount of tax-exempt bonds create permanent endowment funds. (or other obligations) issued by the The Financial Accounting Standards

organization on behalf of a state or Board issued Financial Statements of Organizations that do not follow

local governmental unit, or by a state or Not-for-Profit Organizations (SFAS SFAS 117. If the organization does

local governmental unit on behalf of the 117). SFAS 117 provides standards for not follow SFAS 117, check the box

organization, and for which the external financial statements certified above line 70 and report account

organization has a direct or indirect by an independent accountant for balances on lines 70 through 72.

liability. Tax-exempt bonds include certain types of nonprofit organizations. Report net assets or fund balances on

state or local bonds and any SFAS 117 does not apply to credit line 73. Complete line 74 to report the

obligations, including direct borrowing unions, voluntary employees’ sum of the total liabilities and net

beneficiary associations, supplemental assets. from a lender, or certificates of

participation, the interest on which is unemployment benefit trusts, section Some states that accept Form 990, excluded from the income of the 501(c)(12) cooperatives, and other or Form 990-EZ, as their basic recipient for federal income tax member benefit or mutual benefit reporting form may require a separate purposes under section 103. organizations. statement of changes in net assets/

If the tax-exempt bond or obligation While some states may require fund balances. See General Instruction

is in the form of a mortgage, include the reporting in accordance with SFAS 117, E.

Specific Instructions for Form 990 -39-
Line 70. Capital Stock, Trust Give the preferred address at which

Principal, or Current Funds Parts IV-A and IV-B— officers, directors, etc., want the

Reconciliation Statements Internal Revenue Service to contact For corporations, enter the balance per them. books for capital stock accounts. Show Use these reconciliation statements to

reconcile the differences between the Use an attachment if there are more par or stated value (or for stock with no revenue and expenses shown on the persons to list in Part V-A. par or stated value, total amount

received upon issuance) of all classes organization’s audited financial Show all forms of cash and noncash

statements prepared in accordance of stock issued and, as yet, compensation received by each listed with SFAS 117 and the revenue and uncancelled. For trusts, enter the officer, director, etc., whether paid expenses shown on the organization’s amount in the trust principal or corpus currently or deferred. Form 990. account. For organizations continuing If the organization pays any other to use the fund method of accounting, If the organization did not receive an person, such as a management

enter the fund balances for the audited financial statement for 2007 (or services company, for the services

organization’s current restricted and the fiscal year for which it is completing provided by any of its officers, directors,

unrestricted funds. trustees, or key employees, report the this Form 990) and prepared the return

in accordance with SFAS 117, it does compensation and other items in Part

not need to complete Parts IV-A or IV-B V-A as if the organization had paid the Line 71. Paid-In or Capital and should instead enter “N/A” on line a officers, directors, etc., directly. Also Surplus, or Land, Bldg., and of each Part. see Ann. 2001-33, 2001-17 I.R.B. Equipment Fund 1137. These two Parts do not have to be Enter the balance per books for all completed on group returns. A failure to fully complete Part V-A paid-in capital in excess of par or stated can subject both the organization and

value for all stock issued and On line d1 of Parts IV-A and IV-B, the individuals responsible for such include only those investment expenses uncancelled. If stockholders or others failure to penalties for filing an netted against investment income in the gave donations that the organization incomplete return. See General revenue portion of the organization’s records as paid-in capital, include them Instruction K. In particular, entering the audited financial statements. Do not here. Report any current-year phrase on Part V-A, “Information include program-related investment donations the organization included on available upon request,” or a similar expenses or other expenses reported phrase, is not acceptable. line 71 in Part I, line 1. Enter the fund as program service expenses in the balance for the land, building, and The organization may also provide audited statement of activities. equipment fund on this line. an attachment to explain the entire

2007 compensation package for any

Part V-A — Current Officers, person listed in Part V-A. Line 72. Retained Earnings or

Accumulated Income, Directors, Trustees, and Key Each person listed in Part V-A

should report the listed compensation Endowment, or Other Funds Employees on his or her income tax return unless

For corporations, enter the balance in List each person who was a current the Code specifically excludes any of the retained earnings, or similar officer, director, trustee, or key the payments from income tax. See account, minus the cost of any employee (defined below) of the Pub. 525 for details.

corporate treasury stock. For trusts, organization or disregarded entity Key employee. A key employee is enter the balance per books in the described in Regulations sections any person having responsibilities, accumulated income or similar account. 301.7701-1 through 301.7701-3 at any powers, or influence similar to those of For those organizations using fund time during the year even if they did not officers, directors, or trustees. The term accounting, enter the total of the fund receive any compensation from the includes the chief management and balances for the permanent and term organization. If person is listed in Part administrative officials of an V-A, then list all of that person’s endowment funds as well as balances organization (such as an executive compensation from the organization in of any other funds not reported on lines director or chancellor). Part V-A, whether received as a current 70 and 71. officer, as a former officer, or in another A chief financial officer and the

capacity (for example, independent officer in charge of the administration or

Line 73. Total Net Assets or contractor). program operations are both key

Fund Balances employees if they have the authority to For purposes of reporting all control the organization’s activities, its For organizations that follow SFAS 117, amounts in columns (B) through (E) in finances, or both. enter the total of lines 67 through 69. Part V-A, either use the organizations For all other organizations, enter the tax year, or the calendar year ending Column (A) total of lines 70 through 72. Enter the within such tax year. Report the name and address of each beginning-of-the-year figure on line 73, person who was a current officer, Enter a zero in columns (B), (C), (D), column (A), in Part I, line 19. The director, trustee, or key employee or (E) if no hours were entered in end-of-the-year figure on line 73, (defined above), during the tax year or, column (B) and no compensation, column (B) must agree with the figure if using the calendar year, at any time contributions, expenses, and other on line 21 of Part I. during the calendar year or tax year. allowances were paid during the

reporting period, or deferred for Column (B) Line 74. Total Liabilities and Net payment to a future reporting period. In column (B), a numerical estimate of Assets/Fund Balances Aid in the processing of the the average hours per week devoted to Enter the total of lines 66 and 73. This organization’s return by grouping the position is required for a complete

amount must equal the amount for total together, preferably at the end of its list, answer. Statements such as “as

assets reported on line 59 for both the those who received no compensation. needed,” “as required,” or “40+” are

beginning and end of the year. Be careful not to repeat names. unacceptable.

-40- Specific Instructions for Form 990
Column (C) defined below). For this purpose, • Relationship 3. The organizations

compensation includes any amount that have a relationship as supporting and For each person listed, report salary, would be reportable in columns (C), supported organizations under section fees, bonuses, and severance (D), and (E) of Form 990, Part V-A, if 509(a)(3) (see Example 1, later). payments paid. Include current-year provided by the organization. See • Relationship 4. The organizations payments of amounts reported or General Instruction X regarding due use a common paymaster. For a reportable as deferred compensation in diligence requirements to determine definition of common paymaster and any prior reporting period. business relationships. illustrated examples, see Regulations

Column (D) section 31.3121(s)-1(b). Required attachment. If the • Relationship 5. The other Include in this column all forms of organization answered “Yes,” it must deferred compensation and future organization pays part of the attach a schedule that lists, for each severance payments (whether or not compensation that the organization officer, director, trustee, key employee, funded; whether or not vested; and would otherwise be contractually highest compensated employee, or whether or not the deferred obligated to pay (see Example 2, later). highest compensated professional or compensation plan is a qualified plan • Relationship 6. The organizations other independent contractor, the under section 401(a)). Include also conduct joint programs or share information requested in 1 and 2, payments to welfare benefit plans on facilities or employees. below.

behalf of the officers, directors, etc. Ownership. The term ownership is 1. For Relationships 1 through 5, Such plans provide benefits such as holding (directly or indirectly) 50% or provide: medical, dental, life insurance, more of the voting power in a a. The name of the officer, director, severance pay, disability, etc. corporation, profits interest in a Reasonable estimates may be used if etc., receiving compensation from a partnership, or beneficial interest in a related organization or organizations; precise cost figures are not readily trust. b. The name and EIN of each available. related organization that provided the Control. The term control is having Unless the amounts were reported in compensation; 50% or more of the voting power in a column (C), report, as deferred c. A description of the relationship governing body, or the power to appoint compensation in column (D), salaries between the organization and the 50% or more of an organization’s and other compensation earned during related organization(s); and governing body, or the power to the reporting period, but not yet paid by d. The amount of compensation approve an organization’s budgets or the date the organization files its return. each related organization provided. Use expenditures (an effective veto power

the same format as required by over the organization’s budgets and Column (E) columns (C) through (E) of Part V-A. expenditures). Also, control can be Enter both taxable and nontaxable 2. If the organizations are related indirect by owning or controlling another fringe benefits (other than de minimis only by Relationship 6 organization with such power. or if the fringe benefits described in section Volunteer exception to Relationship 2 The term governing body is defined 132(e)). Include expense allowances or applies, report the following information, by the relevant state law. Generally, the reimbursements that the recipients

must report as income on their separate but do not report compensation paid by governing body of a corporation is its the related organization(s). board of directors and the governing income tax returns. Examples include a. The name of the officer, director, body of a trust is its board of trustees. amounts for which the recipient did not

account to the organization or etc., receiving compensation from a Reporting exceptions. The following

allowances that were more than the exceptions apply: related organization(s);

payee spent on serving the b. The name and EIN of each • Bank or financial institution

organization. Include payments made related organization that provided such trustee exception. If the organization

under indemnification arrangements, and the other organization are related compensation; and

the value of the personal use of only because they are both controlled c. A description of the relationship

housing, automobiles, or other assets by a common trustee that is a bank or between the organization and the

owned or leased by the organization (or financial institution, the organization related organization(s).

provided for the organization’s use does not need to report either the Reporting compensation. Report without charge), as well as any other relationship or the trustee’s compensation paid by a related taxable and nontaxable fringe benefits. compensation from the related organization for only that time period See Pub. 525 for more information. organization. during which a relationship existed • Common independent contractor Line 75b. Business between the organization and the exception. If an independent contractor Relationships related organization. Report listed in Schedule A, Part II-A or II-B compensation paid by a related For a definition of family and business does not exercise substantial influence, organization in the same period (either relationships, see Family relationships as defined in section 4958(f)(1) and calendar or fiscal year) as the and Business relationships on line 51 of Regulations section 53.4958-3 (treating organization reports compensation it these instructions. the organization as though it were an paid. applicable tax-exempt organization Line 75c. Compensation from Definition of related organization. under section 4958(e)), over either the Related Organizations Organizations may be related in several organization or the related organization,

Answer “Yes,” to this question if any of ways; the relationships are not mutually the organization does not need to

the organization’s listed officers, exclusive. Related organizations are report either the relationship or the

directors, trustees, key employees, tax-exempt or taxable organizations independent contractor’s compensation

highest compensated employees, or related to the tax-exempt organization from the related organization. However,

highest compensated professional or in one or more of the following ways. this exception does not apply to a

other independent contractors received • Relationship 1. One organization management services company that

aggregate compensation amounts of owns or controls the other organization. performs for the organization functions

$50,000 or more from the organization • Relationship 2. The same person(s) similar to those of president, chief

and all related organizations (as owns or controls both organizations. executive officer, chief operating officer,

Specific Instructions for Form 990 -41-
treasurer, or chief financial officer. B. Because Organization A is paying to exception earlier, the relationship

Compensation paid by a related Bob a portion of Bob’s compensation between Company Y and Organization

organization to such a management that Organization B would otherwise be B, and Company Y’s compensation

company must be reported by the contractually committed to pay, from Organization B for such janitorial

organization unless another exception Organizations A and B are related services is not reported by Organization

applies. See Examples 4 and 5 later. organizations for Form 990 reporting A.

• Volunteer exception. If Relationship purposes. Organization B must report None of Organization A’s officers, 2 is met only because the same the payment from Organization A to directors, etc., receive compensation individuals control both the tax-exempt Bob in an attachment to line 75c. If, from Organization B. In conclusion, organization and a for-profit instead, Organization B reimbursed Organization A does not report its organization that is not owned or Organization A for a portion of Bob’s relationship with Organization B in an controlled directly or indirectly by one or compensation and all of Bob’s attachment to line 75c, and more tax-exempt organizations, and compensation was reported as paid by Organization A answers “No” on line none of the Relationships described in Organization A, then Relationship 5 75c. 1 or 3 through 5 are met, then the would not apply.

tax-exempt organization does not have Example 3. Tom is the sole trustee Example 5. The facts are the same

to report the compensation from the of Organization A, a tax-exempt as in Example 4, except that one of

for-profit organization of any persons organization, and Organization B, a Organization A’s officers, Sue, receives

serving the tax-exempt organization as compensation from Organization B. for-profit taxable organization wholly a volunteer without compensation other owned by Tom. So, Organizations A Organization A must report in an

than reimbursement of expenses under and B are related under Relationship 2 attachment to line 75c its relationship

an accountable plan (treating the because they are controlled by the with Organization B, and Sue’s

volunteer as an employee for this compensation from Organization B for same person. In this situation, Tom’s purpose). See Example 3 later). services provided to Organization B. compensation from Organization B (as

well as the name and EIN of Even though Organization A must Providing information on Organization B, and a description of the report Sue’s compensation from compensation received from Organization B, Organization A does related organizations does not relationship between the two

TIP

organizations) is reported in an not report Company Y’s compensation violate the disclosure provisions of attachment to line 75c of Organization from Organization B because of the section 7216(a). See also section A’s Form 990. Common independent contractor 6033(a)(1). exception. Examples illustrating relationships. However, if Tom serves

Organization A without compensation Example 1. X, a hospital auxiliary,

raises funds for Hospital Y. Z, another and none of the other relationships Part V-B. Former Officers, described in 1 or 3 through 5 are met, hospital auxiliary, coordinates the Directors, Trustees, and Key then because of the Volunteer efforts of Hospital Y’s volunteer staff. exception, Tom’s compensation from Employees That Received Both X and Z are supporting

organizations of Hospital Y and are Organization B is not reported by Compensation or Other Organization A. However, the considered related organizations to Benefits relationship between Organization A Hospital Y. Hospital Y is also and Organization B must be reported. List each former officer, director, considered a supported organization of trustee, and key employee (as defined the auxiliaries. Example 4. Organization A is filing in Part V-A) of the organization or its Form 990. Organization B is a Hospital Y must report (in an disregarded entity described in taxable subsidiary of Organization A; attachment to line 75c) the Regulations sections 301.7701-1 so, Organizations A and B are related compensation, if any, paid by each of through 301.7701-3 that received under Relationship 1 because A the auxiliaries to the officers, directors, compensation or other benefits during controls B. trustees, or key employees listed in the the reporting year. A reasonable effort hospital’s Form 990, Part V-A, or Organization A contracts with should be made to determine whether

highest-compensated employees listed Company Y for janitorial services. any persons that were paid in the hospital’s Schedule A, Part I, or Company Y is listed as one of compensation or held loans are former highest-compensated professional or Organization A’s highest-compensated officers, etc. Do not list persons in Part other independent contractors listed in independent contractors. Organization V-B that are listed in Part V-A, even if

the hospital’s Schedule A, Part II-A or B also contracts with Company Y for they were former officers, etc. for part II-B. Both X and Z must report (in an janitorial services. Company Y is not a of the year. attachment to line 75c) the 35% controlled entity of a disqualified

person for organization A or For purposes of reporting all compensation, if any, paid by Hospital

Organization B. So, Company Y is amounts in columns (B) through (E) in Y to an officer, director, etc., of the Part V-B, either use the organization’s auxiliary. listed in Organization A’s Schedule A,

Part II-B, and Company Y also receives tax year, or the calendar year ending Example 2. Bob, a key employee within such tax year. compensation from Organization B, of Organization B, a 501(c)(4) social

welfare organization, conducts which is related to Organization A. Give the preferred address at which

fundraising among Organization B’s However, Company Y meets the these former officers, directors, etc.,

members, with the proceeds going to requirements of the Common want the Internal Revenue Service to

Organization A, a 501(c)(3) public independent contractor exception, contact them.

charity, to carry out disaster relief. The earlier. Company Y is not considered to Use an attachment if there are more Chief Executive Officers (CEOs) of exercise substantial influence over persons to list in Part V-B. Organizations A and B agree that either Organization A or Organization B

Organization A will pay a portion of if they were applicable tax-exempt Show all forms of cash and noncash

Bob’s salary for a period of time in organizations within the meaning of compensation or benefits received by

recognition of Bob’s role in the section 4958(e). Because of the each listed former officer, director, etc.,

fundraising assistance of Organization Common independent contractor whether paid currently or deferred.

-42- Specific Instructions for Form 990
If the organization pays any other and other compensation earned during authorized to sign for the organization,

person, such as a management the period covered by the return, but certifying that they are complete and

services company, for the services not yet paid by the date the accurate copies of the original

provided by any of its former officers, organization files its return. documents.

directors, trustees, or key employees, Column (E) Photocopies of articles of report the compensation and other incorporation showing the certification items in Part V-B as if the organization Enter both taxable and nontaxable of an appropriate state official do not had paid the former officers, directors, fringe benefits (other than de minimis have to be accompanied by such a etc., directly. fringe benefits described in section declaration. See Rev. Proc. 68-14, 132(e)). Include expense allowances or A failure to fully complete Part V-B 1968-1 C.B. 768, for details. When a reimbursements that the recipients can subject both the organization and number of changes are made, attach a must report as income on their separate the individuals responsible for such copy of the entire revised organizing income tax returns. Examples include failure to penalties for filing an instrument or governing document. amounts for which the recipient did not incomplete return. See General account to the organization or However, if the exempt organization Instruction K. In particular, entering the allowances that were more than the changes its legal structure, such as phrase on Part V-B, “Information payee spent on serving the from a trust to a corporation, it must file available upon request,” or a similar organization. Include payments made a new exemption application to phrase, is not acceptable. under indemnification arrangements, establish that the new legal entity

The organization may also provide qualifies for exemption. the value of the personal use of an attachment to explain the entire housing, automobiles, or other assets 2007 compensation package for any Line 78. Unrelated Business owned or leased by the organization (or person listed in Part V-B. Income provided for the organization’s use

Each person listed in Part V-B without charge), as well as any other Political organizations described in

should report the listed compensation section 527 are not required to answer taxable and nontaxable fringe benefits.

on his or her income tax return unless See Pub. 525 for more information. this question.

the Code specifically excludes any of Check “Yes” on line 78a if the

the payments from income tax. See organization’s total gross income from Pub. 525 for details. Part VI—Other Information all of its unrelated trades and • Section 501(c)(3) organizations and businesses is $1,000 or more for the Column (A) section 4947(a)(1) nonexempt year. Gross income is the amount of Report the name and address of each charitable trusts must also complete gross receipts less the cost of goods person who was a former officer, and attach a Schedule A (Form 990 or sold. See Pub. 598 for a description of director, trustee, or key employee 990-EZ) to their Form 990 or Form unrelated business income and the (defined in Part V-A) at any time during 990-EZ. See General Instruction D for Form 990-T filing requirements for the calendar year. information on Schedule A (Form 990 section 501(c), (e), (f), (k), and (n)

Column (B) or 990-EZ). organizations having such income. • Answer “Yes,” or “No,” to each In column (B), report all secured and Form 990-T is not a substitute for applicable question. unsecured loans and salary advances Form 990. Report on Form 990, or

to former officers, directors, trustees, Line 76. Change in Activities Form 990-EZ, items of income and

and key employees. For credit unions, expense that are also reported on Form Attach a statement to explain any report only loans not made on the same 990-T when the organization is required changes during the past 3 years in the to file both forms. terms as for all other members. activities the organization conducts to

Column (C) further its exempt purpose, or in the All tax-exempt organizations

methods of conducting these activities. must pay estimated taxes for For each person listed, report salary, However, if a change has been CAUTION their unrelated business income

!

fees, bonuses, and severance reported to the IRS on a previously filed if they expect their tax liability to be payments paid. Include current-year attachment, do not report the change $500 or more. Use Form 990-W to payments of amounts reported or again. An activity previously listed as compute this tax. reportable as deferred compensation in current or planned in the organization’s any prior year. Line 79. Liquidation, application for recognition of exemption

Column (D) does not have to be reported unless the Dissolution, Termination, or

Include in this column all forms of method of conducting such activity has Substantial Contraction

deferred compensation and future changed. Also, include any major For a complete liquidation of a

severance payments (whether or not program activities that are being corporation or termination of a trust,

funded; whether or not vested; and discontinued. check the Termination box in the

whether or not the deferred heading on page 1 of the form. If there Line 77. Changes In Organizing compensation plan is a qualified plan was a liquidation, dissolution, or Governing Documents under section 401(a)). Include also termination, or substantial contraction,

payments to welfare benefit plans on Attach a conformed copy of any attach a statement explaining what took

behalf of the officers, directors, etc. changes to the articles of incorporation, place.

Such plans provide benefits such as or association, constitution, trust On the attached statement, show medical, dental, life insurance, instrument, or other organizing whether the assets have been

severance pay, disability, etc. document, or to the bylaws or other distributed and the date of distribution.

Reasonable estimates may be used if governing document. Also attach a certified copy of any precise cost figures are not readily A conformed copy is one that agrees resolution, or plan of liquidation or available. with the original document and all termination, etc., with all amendments

Unless the amounts were reported in amendments to it. If the copies are not or supplements not already filed. In

column (C), report, as deferred signed, they must be accompanied by a addition, attach a schedule listing the

compensation in column (D), salaries written declaration signed by an officer names and addresses of all persons

Specific Instructions for Form 990 -43-
who received the assets distributed in organization, or the election of • Remuneration to such individual (a

liquidation or termination, the kinds of Presidential or Vice Presidential candidate or prospective candidate) for

assets distributed to each one, and electors. It does not matter whether the speeches or other services;

each asset’s fair market value. attempt succeeds. • Travel expenses of such individual;

A • Expenses of conducting polls, substantial contraction is a partial An expenditure includes a payment, surveys, or other studies, or preparing liquidation or other major disposition of distribution, loan, advance, deposit, or papers or other material for use by assets except transfers for full gift of money, or anything of value. It such individual; consideration or distributions from also includes a contract, promise, or • Expenses of advertising, publicity, current income. agreement to make an expenditure, and fundraising for such individual; and A major disposition of assets whether or not legally enforceable. is any • Any other expense that has the disposition for the tax year that is: All section 501(c) organizations. An primary effect of promoting public 1. At least 25% of the fair market exempt organization that is not a recognition or otherwise primarily value of the organization’s net assets at political organization must file Form accruing to the benefit of such the beginning of the tax year; or 1120-POL if it is treated as having individual.

2. One of a series of related political organization taxable income An organization is effectively dispositions begun in earlier years that under section 527(f)(1). controlled by a candidate or prospective add up to at least 25% of the net assets If a section 501(c) organization candidate only if such individual has a the organization had at the beginning of establishes and maintains a section continuing, substantial involvement in the tax year when the first disposition in 527(f)(3) separate segregated fund, it is the day-to-day operations or the series was made. Whether a major the fund’s responsibility to file its own management of the organization. disposition of assets took place through Form 1120-POL if the fund meets the a series of related dispositions depends Form 1120-POL filing requirements. Do A determination of whether the

on the facts in each case. not include the segregated fund’s primary purpose of an organization is

receipts, expenditures, and balance promoting the candidacy or prospective See Regulations section 1.6043-3 sheet items on the Form 990, or Form candidacy of an individual for public for special rules and exceptions. 990-EZ, of the section 501(c) office is made on the basis of all the

Line 80. Relation To Other organization that establishes and facts and circumstances. See section

Organizations maintains the fund. When answering 4955 and Regulations section 53.4955.

questions 81a and 81b on its Form 990, Answer “Yes” if most (more than 50%) Use Form 4720 to figure and report this section 501(c) organization should of the organization’s governing body, the excise taxes. disregard the political expenses and officers, directors, trustees, or

membership are also officers, directors, Form 1120-POL filing requirement of Line 82. Donated Services or

trustees, or members of any other the segregated fund. Facilities

organization. However, when a section 501(c) Because Form 990, or Form 990-EZ, is

Disregard any coincidental overlap organization transfers its own funds, to open to public inspection, the

of membership with another a separate segregated section 527(f)(3) organization may want the return to

organization; that is, when membership fund for use as political expenses, the show contributions the organization

in one organization is not a condition of 501(c) organization must report the received in the form of donated

membership in another organization. transferred funds as its own political services or the use of materials,

For example, assume that a majority of expenses on its Form 990 or Form equipment, or facilities at less than fair

the members of a section 501(c)(4) 990-EZ. rental value. If so, and if the

civic organization also belong to a local Section 501(c)(3) organizations. A organization’s records either show the

chamber of commerce described in amount and value of such items or give section 501(c)(3) organization will lose section 501(c)(6). The civic a clearly objective basis for an its tax-exempt status if it engages in organization should answer “No” on line estimate, the organization may choose political activity. 80a if it does not require its members to to enter this optional information on line A section 501(c)(3) organization belong to the chamber of commerce. 82b. The IRS does not require any must pay a section 4955 excise tax for organization to keep such records. Also, disregard affiliation with any any amount paid or incurred on behalf However, do not include the value of statewide or nationwide organization. of, or in opposition to, any candidate for such items in Part I or II, or in the Thus, the civic organization in the public office. The organization must pay expense column in Part III. The above example would still answer “No” an additional excise tax if it fails to organization may indicate the value of on line 80a even if it belonged to a correct the expenditure timely. donated services or use of materials, state or national federation of similar

A manager of a section 501(c)(3) equipment, or facilities in Part III in the organizations. A local labor union

whose members are also members of a organization who knowingly agrees to a narrative description of program

political expenditure must pay a section services rendered. See the instructions national labor organization would 4955 excise tax, unless the agreement for Part III. answer “No” on line 80a.

is not willful and there is reasonable Line 81. Expenditures For cause. A manager who does not agree Line 83a. Public Inspection

Political Purposes to a correction of the political Requirements

expenditure may have to pay an Answer “Yes” only if the organization Political organizations described additional excise tax. complied with its public inspection in section 527 are not required When a section 501(c)(3) obligations described in General

to answer this question. Instruction M. CAUTION

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organization promotes a candidate for

A political expenditure is one public office (or is used or controlled by Line 83b. Disclosure intended to influence the selection, a candidate or prospective candidate), Requirements For Quid Pro nomination, election, or appointment of amounts paid or incurred for the

anyone to a federal, state, or local following purposes are political Quo Contributions

public office, or office in a political expenditures: See General Instruction L.

-44- Specific Instructions for Form 990
Line 84a. Solicitations of d. Organizations described in 1 IF . . . THEN . . .

Contributions through 3, above. The organization’s The organization must: 5. Section 501(c)(4) and (5) All organizations that qualify under lobbying and political (a) Allocate all organizations that receive more than section 170(c) to receive contributions expenses are more than membership dues to its 90% of their annual dues from: its membership dues for lobbying and political that are deductible as charitable

a. Persons, the year, activities, and contributions for federal income tax (b) Carry forward any purposes, enter “N/A.” See General b. Families, or excess lobbying and c. Entities who each paid annual Instruction L. political expenses to the dues of $95 or less in 2007 (adjusted next tax year. Line 85. Section 501(c)(4), (5), annually for inflation). See Rev. Proc.

or (6) Organizations 2006-53 which is on page 996 of the The organization: The organization need

Internal Revenue Bulletin 2006-48 at (a) Had only de minimis not disclose to its Reporting membership dues, www.irs.gov/pub/irs-irbs/irb06-48.pdf in-house expenses membership the lobbying, and political expenses ($2,000 or less) and no allocation of dues, etc., 6. Any organization that receives a under section 6033(e). Only certain other nondeductible to its lobbying and private letter ruling from the IRS stating organizations that are tax-exempt lobbying or political political activities. that the organization satisfies the expenses; or under: section 6033(e)(3) exception. • Section 501(c)(4) (social welfare 7. Any organization that keeps (b) Paid a proxy tax, organizations), records to substantiate that 90% or instead of notifying its • Section 501(c)(5) (agricultural and more of its members cannot deduct members on the

horticultural organizations), or allocation of dues to their dues (or similar amounts) as • Section 501(c)(6) (business leagues) lobbying and political business expenses whether or not any expenses*; or are subject to (a) the section 6033(e) part of their dues are used for lobbying notice and reporting requirements, and purposes. (c) Established that (b) a potential proxy tax. These 8. Any organization that is not a substantially all of its organizations must report their total membership organization. membership dues, etc.,

lobbying expenses, political expenses, are not deductible by

and membership dues, or similar members.

Special rules treat affiliated amounts, on line 85 of Form 990. *Such as political campaign or grassroots lobbying social welfare organizations, expenses. Section 6033(e) notice and CAUTION agricultural and horticultural

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reporting requirements and proxy organizations, and business leagues as tax. Section 6033(e) requires certain Members of the organization cannot parts of a single organization for section 501(c)(4), (5), and (6) take a trade or business expense purposes of meeting the nondeductible organizations to tell their members what deduction on their tax returns for the dues exception. See Rev. Proc. 98-19. portion of their membership dues were portion of their dues, etc., allocable to

allocable to the political or lobbying Exception 2. Section 6033(e)(1) the organization’s lobbying and political

activities of the organization. If an $2,000 in-house lobbying exception. activities.

organization does not give its members (Check “Yes” for line 85b.) An Proxy tax. this information, then the organization is organization satisfies the $2,000

subject to a proxy tax. The tax is in-house lobbying exception if it: IF . . . THEN . . .

reported on Form 990-T. 1. Did not receive a waiver for proxy

tax owed for the prior year, The organization’s The organization is However, if the organization meets 2. Did not make any political actual lobbying and liable for a proxy tax on Exception 1 or 2, it is excluded from the political expenses are the excess and reports it expenditures or foreign lobbying notice, reporting, and proxy tax more than it estimated on Form 990-T. expenditures during the 2007 reporting requirements of section 6033(e). See in its dues notices, year, and also Rev. Proc. 98-19, 1998-1 C.B. 3. Made lobbying expenses during 547. The organization: All the members’ dues the 2007 reporting year consisting only (a) Elects to pay the remain eligible for a Exception 1. Section 6033(e)(3) of in-house direct lobbying expenses proxy tax, and section 162 trade or exception for organizations whose totaling $2,000 or less, but excluding: (b) Chooses not to give business expense

dues are nondeductible. (Check “Yes” its members a notice deduction. a. Any allocable overhead for line 85a.) allocating dues to expenses, and lobbying and political 1. All organizations exempt from tax b. All direct lobbying expenses of activities, under section 501(a), other than section any local council regarding legislation of 501(c)(4), (5), and (6) organizations. direct interest to the organization or its The organization: The IRS may permit a

2. Local associations of employees’ members. (a) Makes a reasonable waiver of the proxy tax.

and veterans’ organizations described estimate of dues

allocable to in section 501(c)(4), but not section Dues notices. An organization that nondeductible lobbying 501(c)(4) social welfare organizations. checked “No” for both lines 85a and and political activities, 3. Labor unions and other labor 85b, and is thus responsible for and

organizations described in section reporting on line 85c through 85h, must (b) Agrees to adjust its

501(c)(5), but not section 501(c)(5) estimate in the following send dues notices to its members at

agricultural and horticultural year*. the time of assessment or payment of organizations. dues, unless the organization chooses *A facts and circumstances test determines whether or

4. Section 501(c)(4), (5), and (6) not a reasonable estimate was made in good faith. to pay the proxy tax instead of organizations that receive more than informing its members of the 90% of their dues from: nondeductible portion of its dues. Allocation of costs to lobbying

a. Section 501(c)(3) organizations, These dues notices must reasonably activities and influencing legislation.

b. State or local governments, estimate the dues allocable to the An organization that is subject to the

c. Entities whose income is exempt nondeductible lobbying and political lobbying disclosure rules of section

from tax under section 115, or expenditures reported on line 85d. 6033(e) must use a reasonable

Specific Instructions for Form 990 -45-
allocation method to determine its total and that otherwise qualifies as a

costs of its direct lobbying activities; lobbying activity. X Organization allocated its lobbying

that is, costs to influence: costs as follows: Treat all hours spent by a person in • Legislation, and connection with direct contact lobbying Lobbying • The actions of a covered executive labor hrs. as labor hours allocable to lobbying branch official through direct 3,000 × $300,000 + 0 = $150,000 activities. 6,000 communication (for example, President, Total labor Total Allocable Costs Vice President, or cabinet-level officials, Do not treat the hours spent by a hrs. costs of third-party allocable to

and their immediate deputies) (sections person who engages in research and operations costs lobbying

activities 162(e)(1)(A) and (D)). other background activities related to

Reasonable methods of allocating direct contact lobbying, but who makes Examples: Gross-up method and

costs to direct lobbying activities no direct contact with a legislator, or Alternative gross-up method.

include, but are not limited to: covered executive branch official, as A and B are employees of Y • The ratio method, direct contact lobbying. Organization. • The gross-up and alternative De minimis rule. If less than 5% of 1. A’s activities involve significant gross-up methods, and a person’s time is spent on lobbying judgment with respect to lobbying • A method applying the principles of activities, and there is no direct contact activities. section 263A. lobbying, an organization may treat that 2. A’s basic lobbying labor costs

See Regulations sections 1.162-28 person’s time spent on lobbying (excluding employee benefits) are

and 1.162-29 and the special rules and activities as zero. $50,000.

definitions for these allocation methods 3. B performs clerical and support Influencing legislation is: given below. activities for A. • Any attempt to influence legislation 4. B’s labor costs (excluding An organization that is subject to the through a lobbying communication; and employee benefits) in support of A’s lobbying disclosure rules of section • All activities, such as research and activities are $15,000. 6033(e) must also determine its total coordination for the purpose of making 5. Allocable third-party costs are costs of: or supporting a lobbying $100,000. • De minimis in-house lobbying, communication, even if not yet made. • Grassroots lobbying, and A If Y Organization uses the gross-up lobbying communication is any • Political activities. communication with any member or method to allocate its lobbying costs, Y There are no special rules related to multiplies 175% times its basic labor employee of a legislative body, or any determining these costs. costs (excluding employee benefits) for other government official participating in All methods. For all the allocation all of the lobbying of its personnel and the formulation of the legislation that: methods, include labor hours and costs adds its allocable third-party lobbying • Refers to specific legislation and of personnel whose activities involve costs as follows: reflects a view on that legislation, or significant judgment with respect to • Provides support for views in a prior 175% × $65,000 + $100,000 = $213,750 lobbying activities (lobbying personnel). lobbying communication. Basic lobbying labor Allocable Costs allocable

costs of A + B third-party costs to lobbying Purpose for engaging in an Special rules and definitions. activities activity is based on all the facts and If Y Organization uses the alternative Ratio and gross-up methods. circumstances. If an organization’s gross-up method to allocate its lobbying lobbying communication was for a 1. May use even if volunteers costs, Y multiplies 225% times its basic lobbying and a nonlobbying purpose, conduct activities. labor costs (excluding employee the organization must make a 2. May disregard labor hours and benefits) for all of the lobbying hours of reasonable allocation of costs to costs of clerical or support personnel its lobbying personnel and adds its influencing legislation. (other than lobbying personnel) under third-party lobbying costs as follows: the ratio method. Correction of prior year lobbying 225% × $50,000 + $100,000 = $212,500 costs. If in a prior year, an Alternative gross-up method. Basic lobbying labor Allocable Costs allocable organization treated costs incurred for a costs of A third-party costs to lobbying • Disregard labor hours, and future lobbying communication as a activities

• Costs of clerical or support personnel lobbying cost to influence legislation, (other than lobbying personnel). Section 263A cost allocation but after the organization filed a timely method. The examples that Third-party costs are those paid return, it appears the lobbying demonstrate this method are found in to: communication will not be made under Regulations section 1.162-28(f). • Outside parties for conducting any foreseeable circumstance, the

lobbying activities, organization may apply these costs to Line 85a. Section 6033(e)(3) • Dues paid to another membership reduce its current year’s lobbying costs, Exception For Nondeductible organization that were declared to be but not below zero. The organization Dues nondeductible lobbying expenses, and may carry forward any amount of the

costs not used to reduce its current If the organization meets any of the • Travel and entertainment costs for

year’s lobbying costs to subsequent criteria of Exception 1 in the line 85 lobbying activities.

years. instructions, answer “Yes” to question Direct contact lobbying is a: 85a. By doing so, the organization is • Meeting, Example: Ratio method. X declaring that substantially all of its • Telephone conversation, Organization incurred: membership dues were nondeductible. • Letter, or 1. 6,000 labor hours for all activities, Skip lines 85b through 85h. • Similar means of communication that 2. 3,000 labor hours for lobbying is with a: Line 85b. In-House Lobbying activities (three employees),

1. Legislator (other than a local 3. $300,000 for operational costs, Expenditures

legislator), or and An organization is exempt from the

2. Covered executive branch official 4. No third-party lobbying costs. notice, reporting, and proxy tax liability

-46- Specific Instructions for Form 990
rules of section 6033(e) if it meets The term dues is the amount the Example:

Exception 2, the $2,000 in-house organization requires a member to pay • Membership dues: $100,000 for the

lobbying exception. Both exceptions are in order to be recognized as a member. 2007 reporting year,

discussed in the instructions for line 85. • Organization’s timely notices to Payments that are similar to dues members—25% of membership dues An organization should answer “Yes” include: nondeductible, and to question 85b if it met all of the 1. Members’ voluntary payments, • Line 85e entry—$25,000. requirements of Exception 2. Skip lines 2. Assessments to cover basic

85c through 85h. operating costs, and Line 85f. Taxable Lobbying and

If the organization’s in-house direct 3. Special assessments to conduct Political Expenditures lobbying and political activities. lobbying expenditures during the 2007 The taxable amount reportable on line reporting year were $2,000 or less, but 85f is the amount of dues, etc.: the organization also paid or incurred Line 85d. Lobbying and 1. Allocable to the 2007 reporting other lobbying or political expenditures Political Expenditures year, and during the 2007 reporting year, or Include on line 85d the total amount of 2. Attributable to lobbying and received a waiver for proxy tax owed expenses paid or incurred during the political expenditures that the for the prior year, it should answer “No” 2007 reporting year in connection with: organization did not timely notify its to question 85b and complete lines 85c 1. Influencing legislation; members were nondeductible. through 85h. However, the $2,000 or 2. Participating or intervening in any less of in-house direct lobbying If the amount on line 85c (dues, etc.) political campaign on behalf of (or in expenditures should not be included in is greater than the amount on line 85d opposition to) any candidate for any the total on line 85d. (lobbying & political expenses), then: public office; Definitions. 3. Attempting to influence any Line 85d (lobbying & political expenses) Grassroots lobbying refers to segment of the general public with Less attempts to influence any segment of respect to elections, legislative matters,

or referendums; or Line 85e (dues shown in notices) the general public regarding legislative

matters or referendums. 4. Communicating directly with a Equals

covered executive branch official in an Direct lobbying includes Line 85f (taxable lobbying & political expenses) attempt to influence the official actions attempting to influence: or positions of such official. • Legislation through communication If the amount on line 85c (dues, etc.)

with legislators and other government is less than the amount on line 85d Also include on line 85d: officials, and (lobbying & political expenses), then: 1. Excess lobbying and political • The official actions or positions of expenditures carried over from the Line 85c (dues, etc.) covered executive branch officials

preceding tax year. Less through direct communication. 2. An amount equal to the taxable Line 85e (dues shown in notices) Direct lobbying does not include lobbying and political expenditures attempting to influence: Equals reported on line 85f for the preceding • Any local council on legislation of tax year, if the organization received a Line 85f (taxable lobbying & political direct interest to the organization or its waiver of the proxy tax imposed on that expenses), and

members, and amount. • The general public regarding Line 85d (lobbying & political expenses) legislative matters (grassroots Do not include: Less

lobbying). 1. Any direct lobbying of any local Line 85c (dues, etc.)

Other lobbying includes: council or similar governing body with Equals • Grassroots lobbying, respect to legislation of direct interest to • Foreign lobbying, the organization or its members. The excess amount to be carried over to the

• Third-party lobbying, and following tax year and reported on line 85d 2. In-house direct lobbying (lobbying & political expenses), or its • Dues paid to another organization expenditures, if the total of such equivalent, on the year 2008 Form 990. that were used to lobby. expenditures is $2,000 or less

(excluding allocable overhead). In-house expenditures include: See Examples given below. 3. Political expenditures for which • Salaries, and the section 527 tax has been paid (on Lines 85g and 85h. Proxy Tax • Other expenses of the organization’s

officials and staff (including amounts Form 1120-POL). and Waivers

paid or incurred for the planning of • Reduce the current year’s lobbying An organization must pay the section

legislative activities). expenditures, but not below zero, by 6033(e) proxy tax on the amount

costs previously allocated in a prior reported on line 85f unless it has the In-house expenditures do not year to lobbying activities that were option to check “Yes” on line 85h. include:

• Any payments to other taxpayers cancelled after a return reporting those If the amount on line 85f is zero, or less than engaged in lobbying or political costs was filed. zero, enter on: activities as a trade or business. • Carry forward any amounts not used Line 85g N/A • Any dues paid to another as a reduction to subsequent years. Line 85h N/A

organization that are allocable to Line 85e. Dues Declared lobbying or political activities. Nondeductible In Notices To If the organization sent dues notices to its

Line 85c. Dues, Assessments, Members members at the time of assessment or

payment of dues that reasonably estimated the and Similar Amounts Received Enter the total amount of dues, etc., dues allocable to the nondeductible lobbying Enter the total dues, assessments, and allocable to the 2007 reporting year that and political expenditures reported on line 85d,

similar amounts allocable to the 2007 members were notified were enter on:

reporting year. nondeductible under section 162(e).

Specific Instructions for Form 990 -47-
Line 85g No received in 2007 were less than its the income shown on line 86b on the

Line 85h Yes lobbying expenses for 2007. club’s Form 990-T.

Include the amount from the 2007 Form 990, Workpapers (for 2007 Form 990) — Investment income earned by a

line 85f, on the year 2008 Form 990, line 85d, Organization B section 501(c)(7) organization is not

or its equivalent. 1. Total dues, assessments, etc., tax-exempt income unless it is set aside

received .................. $400 for:

2. Lobbying expenses paid or incurred $600 • Religious, If the organization did not send these dues

notices, enter on: 3. Less: Total nondeductible amount of • Charitable,

dues notices . . . . . . . . . . . . . . . 100 100 Line 85g Yes • Scientific,

Line 85h No 4. (Subtract line 3 from both lines 1 and • Literary, 2) . . . . . . . . . . . . . . . . . . . . . $300 $500 • Educational purposes, or Report the proxy tax on Form 990-T. 5. Taxable amount of lobbying expenses • Prevention of cruelty to children or (smaller of the two amounts on line 4) $300 animals.

Underreporting of lobbying If the combined amount of an The amounts on lines 1, 2, 3, expenses. An organization is subject organization’s gross investment income and 5 of the workpapers were to the proxy tax for the 2007 reporting (that is not set aside for charitable entered on lines 85c through 85f

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year for underreported lobbying and purposes) and other unrelated business of the 2007 Form 990. political expenses only to the extent income exceeds $1,000, it must report that these expenses (if actually Because dues, etc., received were the investment income and other reported) would have resulted in a less than lobbying expenses, excess unrelated business income on Form proxy tax liability for that year. A waiver lobbying expenses of $200 must be 990-T. of proxy tax for the tax year only carried forward to line 85d of the year Nondiscrimination policy. A section applies to reported expenditures. 2008 Form 990 (excess of $600 of 501(c)(7) organization is not exempt

An organization that underreports its lobbying expenses over $400 dues, from income tax if any written policy etc., received). The $200 will be lobbying and political expenses is also statement, including the governing included along with the other lobbying subject to the section 6652(c) daily instrument and bylaws, allows and political expenses paid or incurred penalty for filing an incomplete or discrimination on the basis of race, in the 2008 reporting year and inaccurate return. color, or religion. reportable on line 85d (or the However, section 501(i) allows social Examples equivalent line) of the year 2008 Form clubs to retain their exemption under 990. Organizations A and B: section 501(c)(7) even though their

1. Reported on the calendar year See the instructions for lines 85g membership is limited (in writing) to

basis. and 85h for the treatment of the $300. members of a particular religion, if the

2. Incurred only grassroots lobbying social club: Line 86. Section 501(c)(7) expenses (did not qualify for the under 1. Is an auxiliary of a fraternal Organizations $2,000 in-house lobbying exception (de beneficiary society exempt under

minimis rule)). Gross receipts test. A section section 501(c)(8), and

3. Allocated dues to the tax year in 501(c)(7) organization may receive up 2. Limits its membership to the

which received. to 35% of its gross receipts, including members of a particular religion; or the

investment income, from sources membership limitation is: For Organization A— Dues, outside its membership and remain a. A good-faith attempt to further the assessments, and similar amounts tax-exempt. Part of the 35% (up to 15% teachings or principles of that religion, received in 2007 were greater than its of gross receipts) may be from public and lobbying expenses for 2007. use of a social club’s facilities. b. Not intended to exclude

Workpapers (for 2007 Form 990) — Gross receipts are the club’s income individuals of a particular race or color.

Organization A from its usual activities and include:

1. Total dues, assessments, etc., • Charges, Line 87. Section 501(c)(12)

received .................. $800 • Admissions, Organizations

2. Lobbying expenses paid or incurred $600 • Membership fees, One of the requirements that an 3. Less: Total nondeductible amount of • Dues, organization must meet to qualify under dues notices . . . . . . . . . . . . . . . 100 100 • Assessments, and section 501(c)(12) is that at least 85% 4. (Subtract line 3 from both lines 1 and

2) . . . . . . . . . . . . . . . . . . . . . $700 $500 • Investment income (such as of its gross income consists of amounts dividends, rents, and similar receipts), collected from members for the sole 5. Taxable amount of lobbying expenses

(smaller of the two amounts on line 4) $500 and normal recurring capital gains on purpose of meeting losses and investments. expenses. For purposes of section

The amounts on lines 1, 2, 3, Gross receipts do not include: 501(c)(12), the term gross income is

and 5 of the workpapers were gross receipts without reduction for any • Capital contributions (see

entered on lines 85c through 85f Regulations section 1.118-1), cost of goods sold.

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of the 2007 Form 990. • Initiation fees, or Gross income for mutual or

• Unusual amounts of income (such as cooperative electric companies is Because dues, etc., received were the sale of the clubhouse). figured by excluding any income greater than lobbying expenses, there received or accrued from: is no carryover of excess lobbying College fraternities or sororities expenses to line 85d of the year 2008 1. Qualified pole rentals, or other organizations that Form 990. 2. Any provision or sale of electric CAUTION charge membership initiation

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energy transmission services or See the instructions for lines 85g fees, but not annual dues, do include ancillary service if the services are and 85h for the treatment of the $500. initiation fees in their gross receipts. provided on a nondiscriminatory open

For Organization B— Dues, If the 35% and 15% limits do not access basis under an open access

assessments, and similar amounts affect the club’s exempt status, include transmission tariff; approved or

-48- Specific Instructions for Form 990
accepted by the Federal Energy principles in determining its ownership See General Instruction W for

Regulatory Commission (FERC) or interests in other entities. information about prohibited tax shelter

under an independent transmission transactions. If the organization answered “Yes,” provider agreement approved or to line 88b, complete Part XI, If the organization answered “Yes,” it accepted by FERC (other than income Information Regarding Transfers To must complete Form 8886-T. received or accrued directly or indirectly and From Controlled Entities. from a member), Line 89f. Applicable Insurance 3. The provision or sale of electric Line 89a. Section 501(c)(3) Contract Interest

energy distribution services or ancillary Organizations: Disclosure of Answer “Yes” if after August 17, 2006, services if the services are provided on Excise Taxes Imposed Under but before August 17, 2008, the a nondiscriminatory, open-access basis Section 4911, 4912, or 4955 organization directly or indirectly to distribute electric energy not owned Section 501(c)(3) organizations must acquired an applicable insurance by the mutual or electric cooperative disclose any excise tax imposed during contract which is a part of a structured company: the year under section 4911 (excess transaction involving a pool of such a. To end-users who are served by lobbying expenditures), 4912 contracts. If the organization answered distribution facilities not owned by the (disqualifying lobbying expenditures), “Yes,” it also must complete Form company or any of its members (other or, unless abated, 4955 (political 8921.

than income received or accrued expenditures). See sections 4962 and An applicable insurance contract is directly or indirectly from a member), or 6033(b). any life insurance, annuity, or b. Generated by a generation facility Line 89b. Section 501(c)(3) and endowment contract to which an not owned or leased by the company or applicable exempt organization and a any of its members and which is directly 501(c)(4) Organizations: person other than an applicable exempt connected to distribution facilities Disclosure of Section 4958 organization have directly or indirectly owned by such company or any of its

members (other than income received Excess Benefit Transactions held an interest in the contract (whether and Excise Taxes or not at the same time). However, an or accrued directly or indirectly from a

member). Sections 6033(b) and 6033(f) require applicable insurance contract does not

section 501(c)(3) and (4) organizations include any life insurance, annuity, or 4. From any nuclear to report the amount of taxes imposed endowment contract if: decommissioning transaction, or

5. From any asset exchange or under section 4958 (excess benefit 1. All persons directly or indirectly

conversion transaction. transactions) involving the organization, holding any interest in the contract unless abated, as well as any other (other than applicable exempt

For a mutual or cooperative information the Secretary may require organizations) have an insurable

telephone company, gross income also concerning those transactions. See interest in the insured under the

does not include amounts received or General Instruction P for a discussion contract independent of any interest of

accrued either from another telephone of excess benefit transactions. an applicable exempt organization in

Attach a statement describing any the contract, or company for completing long distance

excess benefit transaction, the 2. The sole interest in the contract calls to or from or between the

disqualified person or persons involved, of an applicable exempt organization or telephone company’s members, or from

the sale of display listings in a directory and whether or not the excess benefit each person other than an applicable

furnished to the telephone company’s transaction was corrected. exempt organization is as a named

members. Also, gross income does not beneficiary, or Line 89c. Taxes Imposed on 3. The sole interest in the contract include amounts received or accrued as

qualified pole rentals. Organization Managers or of each person other than an applicable

Disqualified Persons exempt organization is:

Line 88a. For line 89c, enter the amount of taxes a. As a beneficiary of a trust holding

Answer “Yes” to this question if at any imposed on organization managers or an interest in the contract, but only if

time during the tax year, the disqualified persons under sections the person’s designation as the

organization owned a 50% or greater 4912, 4955, and 4958, unless abated. beneficiary was made without

interest in a taxable corporation or consideration and solely on a purely Line 89d. Taxes Reimbursed by partnership or an entity disregarded as gratuitous basis, or

separate from the organization under the Organization b. As a trustee who holds an

Regulations sections 301.7701-2 and For line 89d, enter the amount of tax on interest in the contract in a fiduciary

301.7701-3. If an organization answers line 89c that was reimbursed by the capacity solely for the benefit of

organization. Any reimbursement of the applicable exempt organizations or “Yes” on line 88a, complete Part IX,

excise tax liability of a disqualified persons described above in 1, 2, or 3a. Information Regarding Taxable

Subsidiaries and Disregarded Entities. person or organization manager will be

treated as an excess benefit unless (1) An applicable exempt organization is

Line 88b. the organization treats the any organization to which contributions

reimbursement as compensation during received are deductible for income tax Answer “Yes” if at any time during the the year the reimbursement is made, purposes, estate and gift tax purposes, tax year, the organization owned more and (2) the total compensation to that and Indian tribal governments. than 50% of the: person, including the reimbursement, is • Stock (by vote or value) in a Line 89g. Disclosure of Excess reasonable. corporation, Business Holdings • Interest (either profit or capital) in a Line 89e. Prohibited Tax Shelter Answer “Yes” if the organization is a partnership, or Transactions supporting organization or a donor • Beneficial interest in any other entity. Answer “Yes” if the organization was a advised fund maintained by a

The organization must apply section party to a prohibited tax shelter sponsoring organization; had excess

318 in determining its ownership of transaction as described in section business holdings during its tax year;

stock in a corporation and use similar 4965(e) at any time during the tax year. and began its tax year after August 17,

Specific Instructions for Form 990 -49-
2006. See the Instructions for Form financial account in a foreign country purpose. Enter gross amounts unless

4720, Schedule C, to determine if the (such as a bank account, securities indicated otherwise. Show also any

organization is subject to the excess account, or other financial account); revenue excludable from the definition

business holdings tax under section and of unrelated business taxable income.

4943. If the organization answered a. The combined value of the The sum of amounts entered in “Yes” to line 89g, it must also complete accounts was more than $10,000 at columns (B), (D), and (E) for lines 93 Form 4720. any time during the calendar year; and through 103 of Part VII should match

Donor advised funds. For purposes amounts entered for correlating lines 2 b. The accounts were not with a

of the excise tax on excess business through 11 of Part I. Use the following U.S. military banking facility operated

holdings under section 4943, a donor table to verify the relationship of Part by a U.S. financial institution.

advised fund will be treated as a private VII with Part I. 2. The organization owns more than

foundation. For a definition of donor 50% of the stock in any corporation that

would answer “Yes” to item 1 above. Contributions that are reportable advised funds, and a sponsoring on lines 1a through 1e of Part I organization, see the instructions for are not reportable in Part VII. If the “Yes” box is checked, enter the

TIP

Line 1a. Contributions to Donor Advised

Funds name of the foreign country or . Also see, Donor advised funds

countries. Attach a separate sheet if Amounts in Part VII Correspond under Excess Benefit Transaction, in more space is needed. File Form TD F on Line: to Amounts General Instruction P, to determine who in Part I on 90-22.1 by June 30, 2008, with the is considered a disqualified person for Line: Department of the Treasury at the purposes of determining the excise tax

on excess business holdings for a address shown on the form. 93(a) through (g) . . . . . . . . . . . . . . . 2

donor advised fund. Form TD F 90-22.1 is available by 94 . . . . . . . . . . . . . . . . . . . . . . . . . 3

 95 . . . . . . . . . . . . . . . . . . . . . . . . . 4 Supporting organizations. Only calling 1-800-TAX-FORM 96 . . . . . . . . . . . . . . . . . . . . . . . . . 5 (1-800-829-3676) or by downloading it certain supporting organizations are 97 and 98 . . . . . . . . . . . . . . . . . . . . 6c from the IRS website at www.irs.gov. subject to the excess business holdings 99 . . . . . . . . . . . . . . . . . . . . . . . . . 7 Do not file Form TD F 90-22.1 with the tax under section 4943. These include: 100 . . . . . . . . . . . . . . . . . . . . . . . . . 8d IRS or attach it to Form 990. • Type III supporting organizations that 101 . . . . . . . . . . . . . . . . . . . . . . . . . 9c

are not functionally integrated; and Line 92. Section 4947(a)(1) 102 . . . . . . . . . . . . . . . . . . . . . . . . . 10c

• Type II supporting organizations that Nonexempt Charitable Trusts 103(a) through (e) . . . . . . . . . . . . . . . 11

accept any gift or contribution from a 105 (plus line 1e, Part I) . . . . . . . . . . . 12 Section 4947(a)(1) nonexempt person who, by himself or in connection

with a related party, controls the charitable trusts that file Form 990 Completing Part VII instead of Form 1041 and have no supported organization of such Type II taxable income under Subtitle A may supporting organization. use Form 990 to meet its Section 6012 Column (A)

To determine if the organization is a filing requirement by checking the box In column (A), identify any unrelated supporting organization and if so, what on line 92. Also, enter on line 92 the business income reportable in column type of supporting organization it is, see total of exempt-interest dividends (B) by selecting a business code from the Instructions for Schedule A, Line received from a mutual fund or other the Codes for Unrelated Business 13. Supporting Organizations. regulated investment company as well Activity in the 2007 Instructions for

Also see, Supporting organizations as tax-exempt interest received directly. Form 990-T.

under Excess Benefit Transaction, in Use the current codes listed in the

General Instruction P, to determine who Part VII—Analysis of 2007 Instructions for Form 990-T.

is considered a disqualified person for

purposes of determining the excise tax Income-Producing Activities Column (B)

on excess business holdings for a Political organizations described in In column (B), enter any revenue supporting organization. section 527 are not required to received from activities unrelated to the

complete this Part. exempt purpose of the organization. Line 90a. List of States

An organization is exempt from See the Instructions for Form 990-T

List each state with which the and Pub. 598 for a discussion of what income taxes only if its primary purpose organization is filing a copy of this is unrelated business income. If the is to engage in the type of activity for return in full or partial satisfaction of which it claims exemption. organization enters an amount in state filing requirements. column (B), then it must enter a An exempt organization is subject to business code in column (A). Line 90b. Number of Employees a tax on unrelated business taxable

Enter the number of employees on the income if such income is from a trade Column (C)

organization’s payroll during the pay or business that is regularly carried on In column (C), enter an exclusion code period including March 12, 2007, as by the organization and is not from the Exclusion Codes list on the

shown on its Form 941 or Form 943 substantially related to the last page of the Specific Instructions for

(January-March calendar quarter return organization’s performance of its Form 990 to identify any revenue only). Do not include household exempt purpose or function. Generally, excludable from unrelated business

employees, persons who received no a tax-exempt organization with gross income. If more than one exclusion

pay during the pay period, pensioners, income of $1,000 or more for the year code applies to a particular revenue or members of the Armed Forces. from an unrelated trade or business item, use the lowest numbered must file Form 990-T and pay any tax exclusion code that applies. If Line 91b. Foreign Accounts due. nontaxable revenues from several

Check the “Yes” box if either 1 or 2 In Part VII, show whether revenue, sources are reportable on the same line below applies: also reportable on lines 2 through 11 of in column (D), use the exclusion code

1. At any time during the calendar Part I, was received from activities that applies to the largest revenue

year, the organization had an interest in related to the organization’s purpose or source. If the list of exclusion codes

or signature or other authority over a activities unrelated to its exempt does not include an item of revenue

-50- Specific Instructions for Form 990
that is excludable from unrelated primarily benefited the government General instructions for lines 99

business income, enter that item in agencies. through 102 are given in the

column (E) and see the instructions for instructions for Part I, lines 7 through Report on line 2 of Part I (program column (E). 10. service revenue) the sum of the entries

Column (D) in columns (B), (D), and (E) for lines Lines 103(a) through (e). Other 93(a) through (g). For column (D), identify any revenue Revenue

received that is excludable from Lines 94 through 96. Dues, List any Other revenue activity on these unrelated business income. If the Assessments, Interest, and lines. These activities are discussed in organization enters an amount in Dividends the instructions for line 11, Part I. In the column (D), it must enter an exclusion appropriate columns, enter the revenue code in column (C). In the appropriate columns, report the received from these activities. Select revenue received for these line items. Column (E) General instructions for lines 94 applicable business and exclusion

For column (E), report any revenue codes. Report as Other revenue, on through 96 are given in the instructions line 11 of Part I, the total revenue from activities related to the for Part I, lines 3 through 5. entered in columns (B), (D), and (E) for organization’s exempt purpose; for Lines 97 and 98. Rental Income lines 103(a) through (e). example, income received from

activities that form the basis of the (Loss) Line 105. Total organization’s exemption from taxation. Report net rental income from

Also report here any revenue that is investment property on these lines. Enter the total revenue reported on line

excludable from gross income other Also report here rental income from 104 for columns (B), (D), and (E). The

than by section 512, 513, or 514, such unaffiliated exempt organizations. amount reported on line 105, plus the

as interest on state and local bonds Report rental income, however, from an amount on line 1e of Part I, should

that is excluded from tax by section exempt function (program service) on equal the amount entered for Total

103. Explain in Part VIII how any revenue on line 12 of Part I. line 93. Refer to the instructions for Part

amount reported in column (E) relates I, line 6. A more detailed discussion of

to the accomplishment of the rental income is given in the organization’s exempt purposes. Part VIII—Relationship of Instructions for Form 990-T and Pub.

598. Activities to the Lines 93(a) through (g).

Program Service Revenue Rents from real property are usually Accomplishment of Exempt

List the organization’s excluded in computing unrelated Purposes business taxable income, as are revenue-producing program service To explain how an amount entered in incidental amounts (10% or less) of activities on these lines. Program Part VII, column (E), was related or rental income from personal property service activities are primarily those exempt function income, show the line leased with real property (mixed lease). that form the basis of an organization’s number of the amount in column (E) In a mixed lease where the rent exemption from tax. Enter in the and give a brief description of how the attributable to personal property is more appropriate columns, gross revenue activity reported in column (E) than 50% of the total rent, neither rent from each program service activity and specifically contributed to the from real or personal property is the business and exclusion codes that accomplishment of the organization’s excluded from unrelated business identify this revenue. See the exempt purposes (other than by taxable income. The exclusion also explanation of program service revenue providing funds for such purposes). does not apply when the real or in the instructions for Part I, line 2. For Activities that generate exempt-function personal property rentals depend 501(c)(15) reporting of insurance income are activities that form the basis wholly or partly on the income or profits premiums received, refer to instructions of the organization’s exemption from from leased property, other than an for Part I, line 2. tax. amount based on a fixed percentage or

Line 93(f). Medicare and percentage of gross receipts or sales. Also give the line number and an

Medicaid Payments The rental exclusion from unrelated explanation for any income entered in

Enter the revenue received from column (E) that is specifically excluded business taxable income does not

Medicare and Medicaid payments. See from gross income other than by apply to debt-financed real property. In sections 512, 513, or 514. If no amount the Example of program service general, debt-financed property is any is entered in column (E), do not revenue in the instructions for Part I, property that the organization finances complete Part VIII. line 2. by debt and holds to produce income

Line 93(g). Fees and Contracts instead of for exempt purposes. An Example. M, an organization exempt organization’s income from described in section 501(c)(3), operates From Government Agencies debt-financed property is treated as a school for the performing arts. In the appropriate columns, enter gross unrelated business taxable income and Admission is charged at student revenue earned from fees and contract is subject to tax in the same proportion performances. M reported admission payments by government agencies for as the property remains financed by the income in column (E) of Part VII and a service, facility, or product that debt. If substantially all (85% or more) explained in Part VIII that performances benefited the government agency of any property is used for an before an audience were an essential primarily, either economically or organization’s exempt purposes, the part of the students’ training and related physically. Do not include government property is not treated as debt-financed to the exempt purpose of the grants that enabled the organization to property. The rules for debt-financed organization. benefit the public directly and primarily. property do not apply to rents from

See Part I, line 1d instructions for the Because M also reported interest personal property.

distinction between government grants from state bonds in column (E) of Part

that represent contributions and VII, M explained in Part VIII that such Lines 99 through 102

payments from government agencies In the appropriate columns, report the interest was excluded from gross

for a service, product, or facility that revenue received for these line items. income by section 103.

Specific Instructions for Form 990 -51-
If additional space is needed, see If, in connection with any transfer of payment for that loan. If additional

Attachments in General Instruction X. funds to a charitable organization, the space is needed, attach a statement.

organization directly or indirectly pays See Attachments in General Instruction

Part IX—Information premiums on any personal benefit X.

contract, or there is an understanding Regarding Taxable or expectation that any person will Line 107. Answer “Yes” and complete Subsidiaries and directly or indirectly pay such

premiums, the organization must report the schedule if at any time during the Disregarded Entities the premiums it paid and the premiums tax year, the organization received any

Column (A). Enter the name, address, paid by others, but treated as paid by transfers of funds or payments from a

and EIN of each taxable corporation or the organization, on Form 8870. The controlled entity within the meaning of

partnership and each disregarded entity organization must report and pay an section 512(b)(13). in which the organization held a 50% or excise tax, equal to premiums paid, on

greater interest at any time during the Form 4720. In column (c), describe each year. If a disregarded entity does not

have its own EIN, state that it uses the transfer. Indicate in the description if

organization’s EIN. Part XI — Information such transfer is a qualifying specified

Columns (D) and (E). Enter the Regarding Transfers To and payment (described in line 108) and

corporation’s or partnership’s total From Controlled Entities indicate the type of transfer such as

income and end-of-year total assets as interest, annuities, royalties, rents, Line 106. Answer “Yes” and complete reported on each entity’s federal tax dividends, fees or other payments for the schedule if at any time during the return for the year ending within the services, or contributions to capital, and tax year the organization made any year covered by the parent loans. loans or transfers to a corporation, organization’s Form 990. Since the partnership, or other entity, which it financial information of a disregarded controlled within the meaning of section In column (d), enter the amount entity is reported on its parent 512(b)(13). In column (c), describe organization’s return, enter in column received for each type of payment. If each loan or transfer (including but not (D) the amount on line 12, Total additional space is needed, attach a limited to interest, annuities, royalties, revenue, that is attributable to the statement. See Attachments in General or rents). In column (d) enter the disregarded entity. Enter in column (E) Instruction X. amount for each loan or transfer to the amount on line 59, Total assets, each controlled entity. Report only the column (B), that is attributable to the total of all payments for a specific Line 108. Answer “Yes” if the disregarded entity. transfer transaction. For example, for a organization had a contract covering

loan, report only the total of all payments from a controlled entity of

Part X—Information payments rather than each individual interest, annuities, royalties, or rents,

Regarding Transfers but only if the contract was in writing,

Associated With Personal legally enforceable, and in effect on

August 17, 2006. Also, answer “Yes” if Benefit Contracts the contract described above had been See General Instruction V which also renewed with substantially similar discusses the reporting requirements terms. for this Part.

-52- Specific Instructions for Form 990
Exclusion Codes

Real property rental income that does not

depend on the income or profits derived by

the person leasing the property and is

excluded by section 512(b)(3)

16—

General Exceptions

Debt-financed Income

Income exempt from debt-financed

(section 514) provisions because at least

Income from an activity that is not regularly

carried on (section 512(a)(1))

01—

30—

Income from an activity in which labor is a

material income-producing factor and

substantially all (at least 85%) of the work

is performed with unpaid labor (section

513(a)(1))

02—

17— Rent from personal property leased with

real property and incidental (10% or less) in

relation to the combined income from the

real and personal property (section

512(b)(3))

Gross income from mortgaged property

used in research activities described in

section 512(b)(7), (8), or (9) (section

514(b)(1)(C))

31—

Section 501(c)(3) organization—Income

from an activity carried on primarily for the

convenience of the organization’s

members, students, patients, visitors,

officers, or employees (hospital parking lot

or museum cafeteria, for example) (section

513(a)(2))

03—

18— Gain (or loss, to the extent allowed) from

the sale of investments and other

non-inventory property and from certain

property acquired from financial institutions

that are in conservatorship or receivership

(sections 512(b)(5) and 512(b)(16)(A))

19— Income or loss from the lapse or

termination of options to buy or sell

securities, or real property, and from the

forfeiture of good-faith deposits for the

purchase, sale, or lease of investment real

property (section 512(b)(5))

Gross income from mortgaged property

used in any activity described in section

513(a)(1), (2), or (3) (section 514(b)(1)(D))

32—

20— Income from research for the United

States; its agencies or instrumentalities; or

any state or political subdivision (section

512(b)(7))

Section 501(c)(4) local association of

employees organized before 5/27/69—

Income from the sale of work-related

clothes or equipment and items normally

sold through vending machines; food

dispensing facilities; or snack bars for the

convenience of association members at

their usual places of employment (section

513(a)(2))

04—

Income from mortgaged property

(neighborhood land) acquired for exempt

purpose use within 10 years (section

514(b)(3))

33—

21— Income from research conducted by a

college, university, or hospital (section

512(b)(8))

Income from mortgaged property

acquired by bequest or devise (applies to

income received within 10 years from the

date of acquisition) (section 514(c)(2)(B))

34—

22— Income from research conducted by an

organization whose primary activity is

conducting fundamental research, the

results of which are freely available to the

general public (section 512(b)(9))

Income from the sale of merchandise,

substantially all of which (at least 85%) was

donated to the organization (section

513(a)(3))

05—

Income from mortgaged property

acquired by gift where the mortgage was

placed on the property more than 5 years

previously and the property was held by

the donor for more than 5 years (applies

to income received within 10 years from

the date of gift) (section 514(c)(2)(B))

35—

23— Income from services provided under

license issued by a Federal regulatory

agency and conducted by a religious order

or school operated by a religious order, but

only if the trade or business has been

carried on by the organization since before

May 27, 1959 (section 512(b)(15))

Specific Exceptions

Section 501(c)(3), (4), or (5) organization

conducting an agricultural or educational

fair or exposition—Qualified public

entertainment activity income (section

513(d)(2))

06—

Income from property received in return

for the obligation to pay an annuity

described in section 514(c)(5)

36—

Income from mortgaged property that

provides housing to low and moderate

income persons to the extent the

mortgage is insured by the Federal

Housing Administration (section 514(c)(6))

(Note: In many cases, this would be

exempt function income reportable in

column (E). It would not be so in the case

of a section 501(c)(5) or (6) organization,

for example, that acquired the housing as

an investment or as a charitable activity.)

37—

Foreign Organizations

Section 501(c)(3), (4), (5), or (6)

organization—Qualified convention and

trade show activity income (section

513(d)(3))

07—

Foreign organizations only—Income from a

trade or business NOT conducted in the

United States and NOT derived from United

States sources (patrons) (section 512(a)(2))

24—

Income from hospital services described in

section 513(e)

08—

Income from noncommercial bingo games

that do not violate state or local law

(section 513(f))

09—

Social Clubs and VEBAs

Section 501(c)(7), (9), or (17) organization—

Non-exempt function income set aside for

a charitable, etc., purpose specified in

section 170(c)(4) (section 512(a)(3)(B)(i))

25—

Income from games of chance conducted

by an organization in North Dakota (section

311 of the Deficit Reduction Act of 1984,

as amended)

10—

Income from mortgaged real property

owned by: a school described in section

170(b)(1)(A)(ii); a section 509(a)(3) affiliated

support organization of such a school; a

section 501(c)(25) organization, or by a

partnership in which any of the above

organizations owns an interest if the

requirements of section 514(c)(9)(B)(vi) are

met (section 514(c)(9))

38—

Section 501(c)(7), (9), or (17) organization—

Proceeds from the sale of exempt function

property that was or will be timely

reinvested in similar property (section

512(a)(3)(D))

26—

Section 501(c)(12) organization—Qualified

pole rental income (section 513(g)) and/or

member income (described in section

501(c)(12)(H))

11—

Income from the distribution of low-cost

articles in connection with the solicitation of

charitable contributions (section 513(h))

12— Section 501(c)(9), or (17) organization—

Non-exempt function income set aside for

the payment of life, sick, accident, or other

benefits (section 512(a)(3)(B)(ii))

27—

Special Rules

Income from the exchange or rental of

membership or donor list with an

organization eligible to receive charitable

contributions by a section 501(c)(3)

organization; by a war veterans’

organization; or an auxiliary unit or society

of, or trust or foundation for, a war

veterans’ post or organization (section

513(h))

13—

Section 501(c)(5) organization—Farm

income used to finance the operation and

maintenance of a retirement home,

hospital, or similar facility operated by the

organization for its members on property

adjacent to the farm land (section

1951(b)(8)(B) of Public Law 94-455)

39—

Veterans’ Organizations

Section 501(c)(19) organization—Payments

for life, sick, accident, or health insurance

for members or their dependents that are

set aside for the payment of such

insurance benefits or for a charitable, etc.,

purpose specified in section 170(c)(4)

(section 512(a)(4))

28—

Trade or Business

41— Gross income from an unrelated activity

that is regularly carried on but, in light of

continuous losses sustained over a

number of tax periods, cannot be

regarded as being conducted with the

motive to make a profit (not a trade or

business)

Modifications and Exclusions

14—

Section 501(c)(19) organization—Income

from an insurance set-aside (see code 28

above) that is set aside for payment of

insurance benefits or for a charitable,

etc., purpose specified in section

170(c)(4) (Regulations section

1.512(a)–4(b)(2))

29—

Royalty income excluded by section

512(b)(2)

15—

Dividends, interest, payments with respect

to securities loans, annuities, income from

notional principal contracts, loan

commitment fees, and other substantially

similar income from ordinary and routine

investments excluded by section 512(b)(1)

40— Annual dues not exceeding $136 (subject

to inflation) paid to a section 501(c)(5)

agricultural or horticultural organization

(section 512(d))

85% of the use of the property is for the

organization’s exempt purposes (Note:

This code is only for income from the

15% or less non-exempt purpose use.)

(section 514(b)(1)(A))

Other

42— Receipt of qualified sponsorship

payments described in section 513(i)

43— Exclusion of any gain or loss from the

qualified sale, exchange, or other

disposition of any qualifying brownfield

property (section 512(b)(19))

Specific Instructions for Form 990 -53-
liquidations, dissolutions, terminations, and government regulators may use

Specific Instructions for or substantial contractions. during normal business hours to obtain

information about the organization’s If the return is an amended return, Form 990-EZ finances and activities. If the check the box. There are amended

See also the General Instructions that organization does not have a telephone return requirements when filing with a apply to both Form 990 and Form number, enter the telephone number of state. See General Instructions E and

990-EZ. an organization official who can provide J. such information.

Contents Page Application pending. If the

Completing the Heading of Form 990-EZ . . . 54 organization’s application for exemption Item F—Group Exemption

Part I—Revenue, Expenses, and Changes in is pending, check this box and Number

Net Assets or Fund Balances complete the return. . . . . . . . . . . 55 The group exemption number (GEN) is

Part II—Balance Sheets . . . . . . . . . . . . . 60 Item C—Name and Address a number assigned by the IRS to the

central/parent organization of a group Part III—Statement of Program Service If the organization operates under a Accomplishments . . . . . . . . . . . . . . . . . . 60 that has a group ruling. name different from its legal name, give

Part IV—List of Officers, Directors, Trustees, the legal name of the organization but If the organization is covered by a and Key Employees . . . . . . . . . . . . . . . . 61 identify its alternate name, after the group exemption letter, enter the

Part V—Other Information . . . . . . . . . . . . 62 legal name, by writing “aka” (also four-digit group exemption number. known as) and the alternate name of Contact the central/parent organization the organization. However, if the if the organization is unsure of the GEN organization has changed its name, Completing the Heading of assigned. follow the instructions for Name change Form 990-EZ in Item B—Checkboxes. Item G—Accounting Method The instructions that follow are keyed to Include the suite, room, or other unit Indicate the method of accounting used items in the heading for Form 990-EZ. number after the street address. If the in preparing this return. See General

Post Office does not deliver mail to the Instruction G. Item A—Accounting Period street address and the organization has File the 2007 return for calendar year a P.O. box, show the box number Item H—Schedule B (Form 990, 2007 and fiscal years that begin in instead of the street address. 990-EZ, or 990-PF) 2007 and end in 2008. For a fiscal year

return, fill in the tax year space at the If the organization receives its mail in Whether or not the organization enters

care of a third party (such as an any amount on line 1 of Form 990-EZ, top of page 1. accountant or an attorney), enter on the the organization must either check the

Item B—Checkboxes street address line C/O followed by the box in item H or attach Schedule B

third party’s name and street address or (Form 990, 990-EZ, or 990-PF). Failure Address change, name change, and P.O. box. to either check the box in item H or file initial return. Check the appropriate Schedule B (Form 990, 990-EZ, or box if the organization changed its For foreign addresses, enter 990-PF) will result in a determination address since it filed its previous return, information in the following order: City, that the return is incomplete. See the or if this is the first time the organization province or state, and the name of the Instructions for Schedule B (Form 990, is filing either a Form 990 or a Form country. Follow the foreign country’s 990-EZ, or 990-PF), for more 990-EZ. practice in placing the postal code in information. the address. Please do not abbreviate

If the tax-exempt organization has the country name. changed its name, attach the following Contributor includes individuals,

documents: If a change of address occurs after fiduciaries, partnerships, the return is filed, use Form 8822 to corporations, associations,

TIP

notify the IRS of the new address. trusts, and exempt organizations. IF the

organization is . THEN attach . . . Item D—Employer

A corporation An amendment to the articles Identification Number Guidelines for Meeting the

of incorporation with proof of The organization should have only one Requirements of Schedule B filing with the state of federal employer identification number (Form 990, 990-EZ, or 990-PF) incorporation. (EIN). If the organization has more than

one EIN and has not been advised Section 501(c)(3) Org. Meeting the 1/3 Support A trust An amendment to the trust

which to use, notify the Internal Test of 170(b)(1)(A) agreement signed by the

trustee. Revenue Service Center, Ogden, UT If . . . . . . . A section 501(c)(3) organization that 84201-0027. State what numbers the met the 1/3 support test of the An association An amendment to the articles organization has, the name and regulations under 509(a)(1)/ of association, constitution, address to which each number was 170(b)(1)(A) did not receive a bylaws, or other organizing assigned, and the address of its contribution of the greater of $5,000 document, along with or 2% of the amount on line 1 of

signatures of at least two principal office. The IRS will advise the Form 990-EZ, from any one officers/members. organization which number to use. contributor,*

A section 501(c)(9) voluntary Then .... The organization should check the

Final return and amended return. employees’ beneficiary box in item H to certify that it is not

Organizations should file final returns required to attach Schedule B (Form CAUTION association must use its own

!

990, 990-EZ, or 990-PF). when they cease to be section 501(a) EIN and not the EIN of its sponsor.

organizations or section 527 Otherwise Complete and attach Schedule B

Item E—Telephone Number (Form 990, 990-EZ, or 990-PF). organizations; for example, when they

cease operations and dissolve. See the Enter a telephone number of the Section 501(c)(7), (8), or (10) Organizations

instructions for line 36 that discuss organization that members of the public

-54- Specific Instructions for Form 990-EZ
If . . . . . . . A section 501(c)(7), (8), or (10) receipts and General Instruction X for a organizations, or raised by an outside organization did not receive any discussion on a complete return. professional fundraiser. contribution or bequest for use • Report the value of noncash exclusively for religious, charitable,

scientific, literary, or educational To figure if a section 501(c)(15) contributions at the time of the

purposes, or the prevention of cruelty organization qualifies for donation. For example, report the gross

to children or animals (and did not tax-exemption for the year, see value of a donated car as of the time CAUTION

!

receive any noncharitable the definition of gross receipts for the car was received as a donation.

contributions of $5,000 or more as section 501(c)(15) purposes under • Report all related expenses on lines described below under general Section 501(c)(15) Organizations in 12 through 16. The organization must rule), General Instruction A. Do not use the show on line 13 professional Then .... The organization should check the section 501(c)(15) definition of gross fundraising fees relating to the gross box in item H to certify that it is not receipts to figure if the organization’s amounts of contributions collected in required to attach Schedule B (Form gross receipts are normally $25,000 or 990, 990-EZ, or 990-PF). the charity’s name by fundraisers. less.

Otherwise Complete and attach Schedule B Reporting for line 1, in accordance

(Form 990, 990-EZ, or 990-PF). with SFAS 116, Accounting for Item L—Figuring Gross Contributions Received and All Other Form 990 or Form 990-EZ Receipts Contributions Made, is acceptable for Organizations (General rule) Only those organizations with gross Form 990-EZ, or Form 990, purposes,

If ....... The organization did not show as receipts of less than $100,000 and total but not required by the IRS. However,

part of line 1 of the Form 990-EZ, a assets of less than $250,000 at the end see General Instruction E.

contribution of $5,000 or more from of the year can use the Form 990-EZ. If An organization that receives a grant any one contributor,* the organization does not meet these to be paid in future years should, Then .... The organization should check the requirements, it must file Form 990. according to SFAS 116, report the box in item H to certify that it is not The organization’s gross receipts are grant’s present value on line 1. required to attach Schedule B (Form the total amount it received from all

990, 990-EZ, or 990-PF). Accruals of present value increments to sources during its annual accounting the unpaid grant should also be Otherwise Complete and attach Schedule B period, without subtracting any costs or reported on line 1 in future years. (Form 990, 990-EZ, or 990-PF). expenses. See the gross receipts * Total a contributor’s gifts of $1,000 or more to determine discussion in General Instruction B. 1. Contributions can arise from if a contributor gave $5,000 or more. Do not include

smaller gifts. special events when an excess

To figure if a section 501(c)(15) payment is received for items

organization qualifies for offered. Fundraising activities relate to Item I—Website CAUTION tax-exemption for the year, see soliciting and receiving contributions. !

Show the organization’s website the definition of gross receipts for However, special fundraising activities address if a website is available. section 501(c)(15) purposes under such as dinners, door-to-door sales of Otherwise, write “N/A” (not applicable). Section 501(c)(15) Organizations in merchandise, carnivals, and bingo Consider adding the organization’s General Instruction A. Do not use the games can produce both contributions email address to its website. section 501(c)(15) definition of gross and revenue. Report as a contribution,

receipts to figure the amount to enter both on line 1 and on line 6a (within the Item J— Organization Type here. parentheses), any amount received If the organization is exempt under through such a special event that is section 501(c), check the applicable greater than the fair market value (retail box and insert, within the parentheses, Part I—Revenue, Expenses, value) of the merchandise or services the number that identifies the type of and Changes in Net Assets furnished by the organization to the section 501(c) organization the filer is. contributor.

See the chart in General Instruction C. or Fund Balances

This situation usually occurs when The term section 501(c)(3) includes All organizations filing Form 990-EZ organizations seek support from the organizations exempt under sections with the IRS or any state must public through solicitation programs that 501(e), (f), (k), and (n). Check the box if complete Part I. Some states that are in part special events or activities the organization is a section 527 accept Form 990-EZ in place of their and are in part solicitations for political organization. See General own forms may require additional contributions. The primary purpose of Instruction U. information. See General Instruction E. such solicitations is to receive

If the organization is a section contributions and not to sell the Line 1. Contributions, Gifts, 4947(a)(1) nonexempt charitable trust, merchandise at its retail value even Grants, and Similar Amounts check the applicable box. Note also the though this might produce a profit. Received discussion regarding Schedule A (Form Example. An organization 990 or 990-EZ) and Form 1041 in announces that anyone who contributes General Instruction D and the A. What is included on line 1 at least $40 to the organization can instructions for line 43. • Report amounts received as choose to receive a book worth $16

voluntary contributions; for example, retail value. A person who gives $40, Item K—Gross Receipts of payments, or the part of any payment, and who chooses the book, is really $25,000 or Less for which the payer (donor) does not purchasing the book for $16 and also

Check this box if the organization is not receive full retail value (fair market making a contribution of $24. The

a section 509(a)(3) supporting value) from the recipient (donee) contribution of $24, which is the

organization and its gross receipts are organization. difference between the buyer’s

normally not more than $25,000 but the • Enter the gross amounts of payment and the $16 retail value of the

organization chooses to file Form contributions, gifts, grants, and book, would be reported on line 1 and

990-EZ. If the organization chooses to bequests that the organization received again on line 6a (within the

file Form 990-EZ, be sure to file a from individuals, trusts, corporations, parentheses). The revenue received

complete return. See General estates, affiliates, foundations, public ($16 retail value of the book) would be

Instruction B for a discussion on gross charities, and other exempt reported in the right-hand column on

Specific Instructions for Form 990-EZ -55-
line 6a. Any expenses directly relating the reporting organization. This benefits. When such an organization

to the sale of the book would be includes contributions received from a receives payments from participants, or

reported on line 6b. Any fundraising parent organization, subordinate, or their employers, to provide these

expenses relating to the contribution of another organization having the same benefits, report the payments on line 2

$24 would be reported on lines 12 parent. as program service revenue, rather

through 16. than on line 1 as contributions. 7. Contributions from a commercial

If a contributor gives more than $40, co-venture. Include amounts C. How to value noncash that person would be making a larger contributed by a commercial co-venture contributions contribution, the difference between the on line 1. These contributions are See General Instruction L and book’s retail value of $16 and the amounts received by the organization Schedule B (Form 990, 990-EZ, or amount actually given. See also the for allowing an outside organization 990-PF). instructions for line 6 and Pub. 526. (donor) or individual to use the recipient

At the time of any solicitation or organization’s name in a sales D. Schedule of contributors

promotion campaign. payment, organizations that are Attach Schedule B (Form 990, 990-EZ, CAUTION eligible to receive tax-deductible 8. Contributions or grants from or 990-PF). See General Instruction L

!

contributions should advise patrons of governmental units. A grant, or other and the Specific Instructions for

the amount deductible for federal tax payment from a governmental unit, is Completing the Heading of Form

purposes. See General Instruction L. treated as a grant equivalent to a 990-EZ, Item H.

contribution if its primary purpose is to 2. Contributions can arise from enable the recipient to provide a Line 2—Program Service special events when items of only service to, or maintain a facility for, the Revenue Including Medicare, nominal value are given or offered.

If an organization offers goods or direct benefit of the public rather than to Medicaid Payments, and

services of only nominal value through serve the direct and immediate needs Government Fees and

of the grantor (even if the public pays a special event, or distributes free, Contracts part of the expense of providing the unordered, low-cost items to patrons, Enter the total program service revenue service or facility). (See also line 1, report the entire amount received for instruction B1, below.) (exempt function income). Program such benefits as a contribution on line services are primarily those that form 1. Report all related expenses on lines 9. Contributions in the form of the basis of an organization’s 12 through 16. membership dues. Include on line 1 exemption from tax.

See General Instruction L for a membership dues and assessments to 1. Examples. A clinic would include

definition of benefits that have a the extent they are contributions and on line 2 all of its charges for medical nominal or insubstantial value. not payments for benefits received. services (whether to be paid directly by (See line 3, instruction C1.) 3. Section 501(c)(3) organizations. the patients or through Medicare,

These organizations must compute the B. What is not included on line Medicaid, or other third-party

amounts of revenue and contributions 1 reimbursement), laboratory fees, and

received from special events according related charges for services.

to the above instructions when 1. Grants that are payments for Program service revenue also preparing their Support Schedule in services are not contributions. A includes tuition received by a school; Part IV-A of Schedule A (Form 990 or grant is a payment for services, and not revenue from admissions to a concert 990-EZ). a contribution, when the terms of the or other performing arts event or to a grant provide the grantor with a specific 4. Grants equivalent to museum; royalties received as author service, facility, or product, rather than contributions. Grants made to of an educational publication distributed providing a benefit to the general public encourage an organization receiving by a commercial publisher; payments or that part of the public served by the the grant to carry on programs or received by a section 501(c)(9) grant recipient. The recipient activities that further the grant organization from participants or organization would report such a grant recipient’s exempt purposes are grants employers of participants for health and as income on line 2 (program service that are equivalent to contributions. welfare benefits coverage; and revenue). Report them on line 1. The grantor may registration fees received in connection specify which of the recipient’s activities 2. Donations of services. Do not with a meeting or convention. the grant may be used for, such as an include the value of services donated to 2. Program-related investment adoption program or a disaster relief the organization, or items such as the income. Program service revenue project. free use of materials, equipment, or also includes income from

A grant is still equivalent to a facilities, as contributions on line 1. program-related investments. These However, for the optional reporting of contribution if the grant recipient investments are made primarily to such amounts, see the instruction for performs a service, or produces a work accomplish an exempt purpose of the donated services in Part III. product, that benefits the grantor investing organization rather than to incidentally (but see line 1, instruction Any unreimbursed expenses of produce income. Examples are B1, below). officers, employees, or volunteers do scholarship loans and low-interest

5. Contributions received through not belong on the Form 990 or Form loans to charitable organizations,

other fundraising organizations. 990-EZ. See the instructions for indigents, or victims of a disaster.

Contributions received indirectly from charitable contributions and employee Rental income received from an exempt

the public through solicitation business expenses in Pub. 526 and function is another example of

campaigns conducted by federated 463, respectively. program-related investment income.

fundraising agencies (such as United 3. Section 501(c)(9), (17), and (18) See also the instructions for line 4.

Way) are included on line 1. organizations. These organizations 3. Unrelated trade or business

6. Contributions received from provide participants with life, sickness, activities. Unrelated trade or business

associated organizations. Include on accident, welfare and unemployment activities (not including any special

line 1 amounts contributed by other insurance, pension(s), or similar events or activities) that generate fees

organizations closely associated with benefits, or a combination of these for services may also be program

-56- Specific Instructions for Form 990-EZ
service activities. A social club, for 2. Dues received primarily for the organization rents to an unaffiliated

example, should report as program organization’s support. If a member exempt organization at less than fair

service revenue the fees it charges pays dues primarily to support the rental value for the purpose of helping

both members and nonmembers for the organization’s activities, and not to that unaffiliated organization carry out

use of its tennis courts and golf course. obtain benefits of more than nominal its exempt purpose. Report rental

monetary value, those dues are a income received in these instances on 4. Government fees and contracts. contribution to the organization line 2 and not on line 4. Program service revenue includes

income earned by the organization for includible on line 1. Only for purposes of completing this

providing a government agency with a return, treat income from renting Line 4—Investment Income

service, facility, or product that property to affiliated exempt

benefited that government agency organizations as exempt function A. What is included on line 4 directly rather than benefiting the public income and include such income on

as a whole. See line 1, instruction A8, 1. Interest on savings and temporary line 2 as program service revenue.

for reporting guidelines when payments cash investments. Include the Lines 5a through 5c—Gains (or are received from a government agency amount of interest received from Losses) From Sale of Assets for providing a service, facility, or interest-bearing checking accounts,

product for the primary benefit of the savings, and temporary cash Other Than Inventory

general public. investments, such as money market

funds, commercial paper, certificates of A. What is included on line 5 Line 3—Membership Dues and deposit, and U.S. Treasury bills or other Report on line 5a all sales of securities Assessments governmental obligations that mature in and sales of all other types of Enter members’ and affiliates’ dues and less than 1 year. So-called dividends or investments (such as real estate, assessments that are not contributions. earnings received from mutual savings royalty interests, or partnership See also General Instruction L. banks, money market funds, etc., are interests) as well as sales of all other actually interest and should be included noninventory assets (such as A. What is included on line 3 on this line. program-related investments and fixed

1. Dues and assessments received 2. Dividends and interest from assets used by the organization in its

that compare reasonably with the securities. Include the amount of related and unrelated activities).

benefits of membership. When the dividend and interest income from Total the cost or other basis (less organization receives dues and equity and debt securities (stocks and depreciation) and selling expenses and assessments that compare reasonably bonds) on this line. Include amounts enter the result on line 5b. On line 5c, with membership benefits, report such received from payments on securities enter the net gain or loss. Report dues and assessments on line 3. loans, as defined in section 512(a)(5). capital gains dividends, the

2. Organizations that generally 3. Gross rents. Include gross rental organization’s share of capital gains

match dues and benefits. income received during the year from and losses from a partnership, and

Organizations described in section investment property. capital gains distributions from trusts on

501(c)(5), (6), or (7) generally provide lines 5a and 5c. Indicate the source on 4. Other investment income. Include, benefits with a reasonable relationship the schedule described below. for example, royalty income from to dues, although benefits to members mineral interests owned by the For this return, the organization may may be indirect. organization. use the more convenient way to figure

B. Examples of membership the organization’s gain or loss from B. What is not included on line sales of securities by comparing the benefits 4 sales price with the average-cost basis These include subscriptions to of the particular security sold. However, 1. Capital gains dividends and publications; newsletters (other than generally the average-cost basis is not unrealized gains and losses. Do not one about the organization’s activities include on this line any capital gains used to figure the gain or loss from only); free or reduced-rate admissions dividends. They are reported on line 5. sales of securities reportable on Form to events the organization sponsors; 990-T. Also do not include unrealized gains use of its facilities; and discounts on

articles or services that both members and losses on investments carried at B. What is not included on line

market value. See the instructions for and nonmembers can buy. In figuring 5 line 20. the value of membership benefits, Do not include on line 5 any unrealized disregard such intangible benefits as 2. Exempt function revenue gains or losses on securities that are the right to attend meetings, vote, or (program service). Do not include on carried in the books of account at

hold office in the organization, and the line 4 amounts that represent income market value. See the instructions for

distinction of being a member of the from an exempt function (program line 20.

organization. service). Report these amounts on line

2 as program service revenue. Report C. Attached schedule

C. What is not included on line expenses related to this income on 1. Nonpublicly traded securities and 3 lines 12 through 16. noninventory items. Attach a

1. Dues or assessments received An organization whose exempt schedule to show the sale or exchange

that exceed the value of available purpose is to provide low-rental housing of nonpublicly traded securities and the

membership benefits. Whether or to persons with low income receives sale or exchange of other assets that

not membership benefits are used, exempt function income from such are not inventory items. The schedule

dues received by an organization, to rentals. An organization receives should show security transactions

the extent they exceed the monetary exempt function income if it rents or separately from the sale of other

value of the membership benefits sublets rental space to a tenant whose assets. Show for these assets:

available to the dues payer, are a activities are related to the reporting • Date acquired and how acquired,

contribution that should be reported on organization’s exempt purpose. Exempt • Date sold and to whom sold,

line 1. function income also arises when an • Gross sales price,

Specific Instructions for Form 990-EZ -57-
• Cost, other basis, or if donated, value Seven cards, Nevada Club tickets, contributors and other respondents are

at time acquired (state which), casino nights, Las Vegas nights, and entered in a drawing for prizes.

• Expense of sale and cost of coin-operated gambling devices. When a minimum payment is improvements made after acquisition, Coin-operated gambling devices required for each raffle or lottery entry and include slot machines, electronic video and prizes of only nominal value are • Depreciation since acquisition, if slot or line games, video poker, video awarded, report any amount received depreciable property. blackjack, video keno, video bingo, as a contribution. Report the related

2. Publicly traded securities. For video pull tab games, etc. expenses on lines 12 through 16.

sales of publicly traded securities A. What is included on line 6 3. Activities that generate only through a broker, the organization may contributions are not special events. total the gross sales price, the cost or 1. Gross revenue/contributions. An activity that generates only other basis, and the expenses of sale, When an organization receives contributions, such as a solicitation

and report lump-sum figures in place of payments for goods or services offered campaign by mail, is not a special providing the detailed reporting required through a special event, enter: event. Any amount received should be in the above paragraph. 1. As gross revenue, on line 6a (in included on line 1 as a contribution.

Publicly traded securities include the right-hand column), the retail value Related expenses are reportable on

common and preferred stocks, bonds of the goods or services, lines 12 through 16.

(including governmental obligations), 2. As a contribution, on both line 1 C. Attached schedule and mutual fund shares that are listed and line 6a (within the parentheses), Attach a schedule listing the three and regularly traded in an any amount received that exceeds the largest fundraising events, as over-the-counter market or on an retail value of the goods or services measured by gross receipts. If gaming established exchange and for which given. is conducted, treat different types of market quotations are published or

Example. At a special event, an gaming separately to determine the otherwise readily available. three largest events. For example, treat organization received $100 in gross Lines 6a through 6c—Special bingo and pull tabs as separate receipts for goods valued at $40. The Events and Activities fundraising events. Describe each of organization entered gross revenue of these events by listing the type of event On the appropriate line, enter the gross $40 on line 6a and entered a and the number of occasions that the revenue, expenses, and net income (or contribution of $60 on both line 1 and

within the parentheses on line 6a. The event occurred and show (for each loss) from all special events and event): activities, such as dinners, dances, contribution was the difference between

carnivals, raffles, bingo games, other the gross revenue of $40 and the gross 1. Gross receipts,

gaming activities, and door-to-door receipts of $100. 2. Contributions included in gross

sales of merchandise. receipts (see line 6, instruction A1, 2. Raffles or lotteries. Report as above), These activities only incidentally revenue, on line 6a, any amount 3. Gross revenue (gross receipts accomplish an exempt purpose. Their received from raffles or lotteries that less contributions), sole or primary purpose is to raise require payment of a specified 4. Direct expenses, and funds that are other than contributions minimum amount for each entry, unless 5. Net income or (loss) (gross to finance the organization’s exempt the prizes awarded have only nominal revenue less direct expenses). activities. value. See line 6, instruction B1 and

B2, below. For gaming, direct expenses include: This is done by offering goods or cash and noncash prizes, services that have more than a nominal 3. Direct expenses. Report on line 6b compensation to bingo callers and value (compared to the price charged) only the direct expenses attributable to workers, rental of gaming equipment, for a payment that is more than the the goods or services the buyer cost of bingo supplies such as pull tab direct cost of those goods or services. receives from a special event. If the deals, etc. See line 1 instructions A1 and A2 for a organization includes an expense on

discussion on contributions reportable line 6b, do not report it again on line 7b. Furnish the same information, in

on line 1 and revenue reportable on line Report cost of goods related to the sale total figures, for all other special events

6. See also General Instruction L held that are not among the largest . of inventory on line 7b. Fundraising

expenses attributable to contributions three. Indicate the type and number of Calling any required payment a the events not listed individually (for donation or contribution on tickets, reported on line 6a (within the

parentheses), and also on line 1, are example, three dances and two raffles). advertising, or solicitation materials

does not change how these payments reportable on lines 12 through 16. An example of this schedule of

should be reported on Form 990-EZ. special events might appear in B. What is not included on line columnar form as follows: The gross revenue from gaming 6 Special Events (and the (A) (B) (C) All Total activities and other special events must number of occasions that # # # Other

be reported in the right-hand column on 1. Sales or gifts of goods or services the event occurred):

line 6a without reduction for cash or of only nominal value. If the goods or Gross Receipts $xx $xx $xx $xx $xx

noncash prizes, cost of goods sold, services offered at the special event Less: Contributions xx xx xx xx xx compensation, fees, or other expenses. have only nominal value, include all of Gross Revenue xx xx xx xx xx Be sure to check the box for gaming if the receipts as contributions on line 1

Less: Direct Expenses xx xx xx xx xx the organization conducted directly, or and all of the related expenses on lines

12 through 16. See General Instruction Net Income or (loss) $xx $xx $xx $xx $xx through the promoter, any amount of

gaming during the year. L for a description of nominal or If the organization uses this format, insubstantial benefits. Gaming includes, but is not limited report the total for Contributions on line

to: bingo, pull tabs, instant bingo raffles, 2. Sweepstakes, raffles, and 1 of Form 990-EZ and on line 6a (within

scratch-offs, charitable gaming tickets, lotteries. Report as a contribution, on the parentheses). Report the totals for

break-opens, hard cards, banded line 1, the proceeds of solicitation Gross Revenue, in the right-hand

tickets, jar tickets, pickle cards, Lucky campaigns in which the names of column, on line 6a; Direct Expenses on

-58- Specific Instructions for Form 990-EZ
line 6b; and Net Income or (loss) on assistance by others at the expense of identify payments to affiliates;

line 6c. the filing organization. payments for nursing services;

fellowships; or payments for food, 2. Payments, voluntary awards, or Lines 7a through 7c—Gross grants to affiliates. shelter, or medical services for Include on line 10 Sales of Inventory indigents or disaster victims. For certain types of payments to payments to indigent families, do not 1. Sales of inventory. Include on line organizations affiliated with (closely identify the individuals. 7a the gross sales (less returns and related to) the reporting organization.

allowances) of inventory items, whether These payments include predetermined If an organization gives property

the sales activity is an exempt function quota support and dues payments by other than cash and measures an

or an unrelated trade or business. local organizations to their state or award or grant by the property’s fair

Include all inventory sales except sales national organizations. market value, also show on this

of goods at special events, which are schedule: If the organization uses Form reportable on line 6. • A description of the property, 990-EZ for state reporting • The book value of the property, 2. Cost of goods sold. On line 7b, CAUTION purposes, be sure to distinguish

! • How the organization determined the report the cost of goods sold related to between payments to affiliates and book value, sales of such inventory. The usual awards and grants. See General • How the organization determined the items included in cost of goods sold are Instruction E. fair market value, and direct and indirect labor, materials and B. What is not included on line • The date of the gift. supplies consumed, freight-in, and a

proportion of overhead expenses. 10 Any difference between a property’s

Marketing and distribution expenses fair market value and book value 1. Administrative expenses. Do not are not includible in cost of goods sold. should be recorded in the include on this line expenses made in Include those expenses on lines 12 organization’s books of account and on selecting recipients or monitoring through 16. line 20. compliance with the terms of a grant or 3. Investments. Do not include on line award. Enter those expenses on lines Colleges, universities, and primary

7 sales of investments on which the 12 through 16. and secondary schools are not required

organization expected to profit by to list the names of individuals who 2. Purchases of goods or services appreciation and sale. Report sales of were provided scholarships or other from affiliates. Do not report the cost these investments on line 5. financial assistance whether they are of goods or services purchased from the recipients of Federal grant money Line 8—Other Revenue affiliates on line 10. Report these as or not. Instead, these organizations expenses on lines 12 through 16. Enter the total income from all sources must (a) group each type of financial not covered by lines 1 through 7. 3. Membership dues paid to another aid provided; (b) indicate the number of Examples of types of income includible organization. Report membership individuals who received the aid; and

on line 8 are interest on notes dues that the organization pays to (c) specify the aggregate dollar amount. another organization for general receivable not held as investments or

as program-related investments membership benefits, such as regular Line 11—Benefits Paid To or

(defined in the line 2 instructions); services, publications, and materials on For Members

line 16, as Other expenses. interest on loans to officers, directors, For an organization that gives benefits trustees, key employees, and other C. Attached schedule to members or dependents (such as employees; and royalties that are not organizations exempt under section Attach a schedule to explain the investment income or program service 501(c)(8), (9), or (17)), enter the amounts reported on line 10. Show on revenue. amounts paid for: (a) death, sickness, this schedule: hospitalization, or disability benefits; (b) Line 10—Grants and Similar • Each class of activity, unemployment compensation benefits; Amounts Paid • The grantee’s name and address, and (c) other benefits. Do not include, • The amount given, and Reporting for line 10 in accordance with on this line, the cost of • The relationship of the grantee (in the SFAS 116 is acceptable for Form employment-related benefits the case of grants to individuals) if the 990-EZ purposes, but not required by organization gives its officers and relationship is by blood, marriage, IRS. However, see General Instruction employees. Report them on line 12. adoption, or employment (including E. employees’ children) to any person or Line 12—Salaries, Other An organization that makes a grant corporation with an interest in the Compensation, and Employee to be paid in future years should, organization, such as a creator, donor, Benefits according to SFAS 116, report the director, trustee, officer, etc. grant’s present value on line 10. Enter the total salaries and wages paid Any grants reported on line 10 that Accruals of present value increments to to all employees and the fees paid to were approved during the year, but not the unpaid grant should also be officers, directors, and trustees. Include

reported on line 10 in future years. paid by the due date for filing Form the total of the employer’s share of the 990-EZ (including extensions), must be contributions the organization paid to A. What is included on line 10 identified and listed separately in the qualified and nonqualified pension

Enter the amount of actual grants and plans and the employer’s share of line 10 schedule.

similar amounts paid to individuals and Give the name and address of each contributions to employee benefit

organizations selected by the filing affiliate that received any payment programs (such as insurance, health,

organization. Include scholarship, reported on line 10. Specify both the and welfare programs) that are not an

fellowship, and research grants to amount and purpose of these incidental part of a pension plan.

individuals. payments. Complete the Form 5500 return if the

organization is required to file it. 1. Specific assistance to individuals. Classify activities on this schedule in

Include on this line the amount of more detail than by using such broad Also include in the total the amount

payments to, or for the benefit of, terms as charitable, educational, of federal, state, and local payroll taxes

particular clients or patients, including religious, or scientific. For example, for the year that are imposed on the

Specific Instructions for Form 990-EZ -59-
organization as an employer. This 5b, 6b, or 7b. Do not include any Line 22—Cash, Savings, and includes the employer’s share of social expenses, such as salaries, for which a Investments

security and Medicare taxes, Federal separate line is provided. Include all interest and non-interest unemployment tax (FUTA), state Line 16—Other Expenses bearing accounts such as petty cash unemployment compensation tax, and funds, checking accounts, savings other state and local payroll taxes. Include here such expenses as accounts, money market funds, Taxes withheld from employees’ penalties, fines, and judgments; commercial paper, certificates of salaries and paid over to the various unrelated business income taxes; deposit, U.S. Treasury bills, and other governmental units (such as Federal insurance and real estate taxes not government obligations. Also include and state income taxes and the attributable to rental property or the book value of securities held as employees’ share of social security and reported as occupancy expenses; investments, and all other investment Medicare taxes) are part of the depreciation on investment property; holdings including land and buildings employees’ salaries included on line 12. travel and transportation costs; interest held for investment. Report the income Report expenses paid or incurred for expense; and expenses for from these investments on line 4. employee events such as a picnic or conferences, conventions, and

holiday party on this line. meetings. Line 23—Land and Buildings

Line 13—Professional Fees and Some states that accept Form Enter the book value (cost or other

990-EZ in satisfaction of their filing basis less accumulated depreciation) of Other Payments to Independent requirements may require that certain all land and buildings owned by the Contractors types of miscellaneous expenses be organization and not held for Enter the total amount of legal, itemized. See General Instruction E. investment.

accounting, auditing, other professional

fees (such as fees for fundraising or Line 18—Excess or (Deficit) for Line 24—Other Assets

investment services) and related the Year Enter the total of other assets along expenses charged by outside firms and Enter the difference between lines 9 with a description of those assets. individuals who are not employees of and 17. If line 17 is more than line 9, Amounts to include here are (among the organization. Do not include any enter the difference in parentheses. others) receivable accounts, penalties, fines, or judgments imposed inventories, and prepaid expenses. against the organization as a result of Line 19—Net Assets or Fund

legal proceedings. Report and identify Balances at Beginning of Year Line 25—Total Assets

those expenses on line 16. Report fees Enter the amount from the prior year’s Enter the amount of total assets. If the

paid to directors and trustees on line balance sheet or from Form 5500 or an end-of-year total assets entered in 12. approved DOL form if General column (B) are $250,000 or more, Form

Instruction F applies. 990 must be filed instead of Form Line 14—Occupancy, Rent, 990-EZ. Utilities, and Maintenance Line 20—Other Changes in Net

Enter the total amount paid or incurred Assets or Fund Balances Line 27—Net Assets or Fund

for the use of office space or other Attach a statement explaining any Balances

facilities, heat, light, power, and other changes in net assets or fund balances Subtract line 26 (total liabilities) from utilities, outside janitorial services, between the beginning and end of the line 25 (total assets) to determine net mortgage interest, real estate taxes and year that are not accounted for by the assets. Enter this net asset amount on

property insurance attributable to rental amount on line 18. Amounts to report line 27. The amount entered in column

property, and similar expenses. Do not here include adjustments of earlier (B) should agree with the net asset or subtract from rental expenses reported years’ activity; unrealized gains and fund balance amount on line 21.

on line 14 any rental income received losses on investments carried at market States that accept Form 990-EZ as from renting or subletting rented space. value; and any difference between fair See the instructions for lines 2 and 4 to their basic report form may require a market value and book value of separate statement of changes in net determine whether such income is property given as an award or grant. assets. See General Instruction E. reportable as exempt function income See General Instruction G regarding or investment income. However, report the reporting of a section 481(a) on line 14 any rental expenses for adjustment to conform to SFAS 116. Part III—Statement of rental income reported on lines 2 and 4.

If the organization records depreciation Program Service

on property it occupies, enter the total Part II—Balance Sheets Accomplishments for the year. All organizations, except those that A program service is a major (usually

For an explanation of acceptable meet one of the exceptions in General ongoing) objective of an organization,

methods for computing depreciation, Instruction F, must complete columns such as adoptions, recreation for the

see Pub. 946. (A) and (B) of Part II of the return and elderly, rehabilitation, or publication of

may not submit a substitute balance journals or newsletters.

Line 15—Printing, Publications, sheet. Failure to complete Part II may

Postage, and Shipping result in penalties for filing an Step Action

incomplete return. If there is no amount Enter the printing and related costs of to report in column (A), Beginning of 1 State the organization’s primary exempt producing the reporting organization’s year, put a zero in that column. See purpose. own newsletters, leaflets, films, and General Instruction K. other informational materials on this 2 All organizations must describe their line. Include the costs of outside Some states require more exempt purpose achievements for each mailing services on this line. Also information. See General Instruction E of their four largest program services (as include the cost of any purchased for more information about completing a measured by total expenses incurred). If

publications as well as postage and Form 990-EZ to be filed with any state there were four or fewer of such activities,

shipping costs not reportable on lines or local government agency. describe each program service activity.

-60- Specific Instructions for Form 990-EZ
For purposes of reporting all director, trustee, or key employee • Describe program service amounts in columns (B) through (E) in (defined above), during the tax year or, accomplishments through measurements

such as clients served, days of care, Part IV, either use the organization’s if using the calendar year, at any time

therapy sessions, or publications issued. tax year, or the calendar year ending during the calendar year or tax year.

within such tax year. • Describe the activity’s objective, for both Column (B) this time period and the longer-term goal, Enter a zero in columns (B), (C), (D), In column (B), a numerical estimate of if the output is intangible, such as in a or (E) if no hours were entered in

research activity. the average hours per week devoted to column (B) and no compensation, the position is required for a complete contributions, expenses, and other • Give reasonable estimates for any answer. Statements such as “as statistical information if exact figures are allowances were paid during the needed” or “as required,” or “40+” are not readily available. Indicate that this reporting year, or deferred for payment unacceptable. information is estimated. to a future accounting period.

• Be clear, concise, and complete in the Aid in the processing of the Column (C)

description. Avoid adding an attachment. organization’s return by grouping For each person listed, report salary, together, preferably at the end of the fees, bonuses, and severance 3 If part of the total expenses of any list, those who received no payments paid. Include current-year program service consists of grants compensation. Be careful not to repeat payments of amounts reported or reported on line 10, enter the amount of names. reportable as deferred compensation in grants in the space provided and include Give the preferred address at which any prior year. the grants in the Expenses column. If the

amount of grants entered includes foreign officers, directors, etc., want the Column (D) grants, check the box to the left of the Internal Revenue Service to contact

entry space for Program Services them. Include in this column all forms of

Expenses. deferred compensation and future Use an attachment if there are more severance payments (whether or not • Section 501(c)(3) and (4) organizations, than four persons to list in Part IV. and section 4947(a)(1) nonexempt funded; whether or not vested; and Show all forms of cash and noncash charitable trusts, must show the amount whether or not the deferred compensation received by each listed of grants and allocations to others and compensation plan is a qualified plan

must enter the total expenses for each officer, director, etc., whether paid under section 401(a)). Include also program service reported. currently or deferred. payments to welfare benefit plans on

• For all other organizations, completing If the organization pays any other behalf of the officers, etc. Such plans

the Program Services Expenses column person, such as a management provide benefits such as medical,

(and the Grants entry) in Part III is services company, for the services dental, life insurance, severance pay,

optional. provided by any of its officers, directors, disability, etc. Reasonable estimates

trustees, or key employees, report the may be used if precise cost figures are 4 Attach a schedule that lists the compensation and other items in Part not readily available. organization’s other program services. IV as if the organization had paid the Unless the amounts were reported in • The detailed information required for the officers, directors, etc., directly. Also, column (C), report, as deferred four largest services is not necessary for see Ann. 2001-33, 2001-17 I.R.B. compensation in column (D), salaries this schedule. 1137. and other compensation earned during • However, section 501(c)(3) and (4) A failure to fully complete Part IV can the period covered by the return, but organizations, and section 4947(a)(1) subject both the organization and the not yet paid by the date the nonexempt charitable trusts must show individuals responsible for such failure organization files its return. the expenses attributable to their program to penalties for filing an incomplete services. return. See General Instruction K. In Column (E)

particular, entering the phrase on Part Enter both taxable and nontaxable 5 The organization may show the amount IV, “Information available upon fringe benefits (other than de minimis of any donated services, or use of request,” or a similar phrase, is not materials, equipment, or facilities it fringe benefits described in section

received or utilized in connection with a acceptable. 132(e)). Include amounts that the

specific program service. The organization may also provide recipients must report as income on

an attachment to explain the entire their separate income tax returns. • Disclose the applicable amounts of any 2007 compensation package for any Examples include amounts for which donated services, etc., on the lines for the

narrative description of the appropriate person listed in Part IV. the recipient did not account to the

program service. Key employee. organization or allowances that were A key employee is more than the payee spent on serving • Do not include these amounts in the any person having responsibilities or the organization. Include payments expense column in Part III. powers similar to those of officers, made under indemnification directors, or trustees. The term includes • See the instructions for line 1, B2. arrangements, the value of the personal the chief management and use of housing, automobiles, or other administrative officials of an assets owned or leased by the organization (such as an executive organization (or provided for the director or chancellor). Part IV—List of Officers, organization’s use without charge), as A chief financial officer and the Directors, Trustees, and Key well as any other taxable and officer in charge of the administration or nontaxable fringe benefits. See Pub. Employees program operations are both key 525 for more information. employees if they have the authority to List each person who was an officer, control the organization’s activities, its Form 941 must be filed to report director, trustee, or key employee income tax withholding and social finances, or both. (defined below) of the organization at security and Medicare taxes. The any time during the year even if they Column (A) organization must also file Form 940 to

did not receive any compensation from Report the name and address of each report Federal unemployment tax,

the organization. person who was a current officer, unless the organization is not subject to

Specific Instructions for Form 990-EZ -61-
these taxes. See Pub. 15 (Circular E) establish that the new legal entity • 501(c)(5) (agricultural and

for more information. See also the Trust qualifies for exemption. horticultural organizations), or

Fund Recovery Penalty discussion in • 501(c)(6) (business leagues) General Instruction D. Line 35—Unrelated Business are subject to (a) the section 6033(e) Income and Lobbying Proxy notice and reporting requirements, and Tax (b) a potential proxy tax. Part V—Other Information

• Section 501(c)(3) organizations and Unrelated Business Income If the organization is not

section 4947(a)(1) nonexempt tax-exempt under sections 501(c)(4), Political organizations described in charitable trusts must also complete (5), or (6), check “No” on line 35a, section 527 are not required to answer and attach a Schedule A (Form 990 or unless there was unrelated business this question. 990-EZ) to their Form 990-EZ. See income.

General Instruction D for information on Check “Yes” on line 35a if the

If the organization meets Exception Schedule A (Form 990 or 990-EZ). organization’s total gross income from 1 or 2 below, it is excluded from the • Answer “Yes,” “No,” or “N/A” to each all of its unrelated trades and

notice, reporting, and proxy tax question. businesses is $1,000 or more for the requirements of section 6033(e), and it • The organization must attach a year. Gross income is gross receipts should check “No” to line 35a, unless statement regarding personal benefit less the cost of goods sold. See Pub. the organization had $1,000 or more of contracts. See General Instruction V. 598 for a description of unrelated unrelated business income. See also business income and the 2007

Line 33—Change in Activities Rev. Proc. 98-19, 1998-1 C.B. 547. Instructions for Form 990-T for the

Attach a statement to explain any Form 990-T filing requirements. Form Exception 1. Section 6033(e)(3) changes during the past 3 years in the 990-T is not a substitute for Form exception for nondeductible dues. activities the organization conducts to 990-EZ. Items of income and expense

reported on Form 990-T must also be 1. All organizations exempt from tax further its exempt purpose, or in the

methods of conducting these activities. reported on Form 990-EZ when the under section 501(a), other than section

organization is required to file both 501(c)(4), (5), and (6) organizations. However, if a change has been forms. 2. Local associations of employees’ reported to the IRS on a previously filed

attachment, do not report the change and veterans’ organizations described

again. An activity previously listed as All tax-exempt organizations in section 501(c)(4), but not section

current or planned in the organization’s must pay estimated taxes with 501(c)(4) social welfare organizations. CAUTION respect to their unrelated

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application for recognition of exemption 3. Labor unions and other labor business income if they expect their tax does not have to be reported unless the organizations described in section

method of conducting such activity has liability to be $500 or more. Use Form 501(c)(5), but not section 501(c)(5) 990-W to compute this tax. changed. Also, include any major agricultural and horticultural

program activities that are being organizations. Section 6033(e) tax for lobbying discontinued. 4. Section 501(c)(4), (5), and (6) expenditures organizations that receive more than Line 34—Changes in If the organization checks “No” to line 90% of their dues from:

Organizing or Governing 35a, it is certifying that the organization a. Section 501(c)(3) organizations, Documents was not subject to the notice and b. State or local governments, reporting requirements of section Attach a conformed copy of any 6033(e) and that the organization had c. Entities whose income is exempt changes to the articles of incorporation, no lobbying and political expenditures from tax under section 115, or or association, constitution, trust potentially subject to the proxy tax. d. Organizations described in 1 instrument, or other organizing through 3, above. document, or to the bylaws or other Section 6033(e) notice and reporting 5. Section 501(c)(4) and (5) governing document. requirements and proxy tax. Section

organizations that receive more than 6033(e) requires certain section A conformed copy is one that agrees 90% of their annual dues from: 501(c)(4), (5), and (6) organizations to with the original document and all tell their members the portion of their a. Persons, amendments to it. If the copies are not membership dues that were allocable to b. Families, or signed, they must be accompanied by a the political or lobbying activities of the c. Entities who each paid annual written declaration signed by an officer organization. If an organization does dues of $95 or less in 2007 (adjusted authorized to sign for the organization, not give its members this information, annually for inflation). See Rev. Proc. certifying that they are complete and then the organization is subject to a 2006-53 which is on page 996 of the accurate copies of the original proxy tax. The tax is reported on Form Internal Revenue Bulletin at www.irs. documents. 990-T. gov/pub/irs-irbs/irb06-48.pdf.

Photocopies of articles of If the organization checks “Yes” on 6. Any organization that receives a incorporation showing the certification line 35a to declare that it had reportable private letter ruling from the IRS stating of an appropriate state official need not section 6033(e) lobbying and political that the organization satisfies the be accompanied by such a declaration. expenses in the 2007 reporting year section 6033(e)(3) exception. See Rev. Proc. 68-14, 1968-1 C.B. (and potential liability for the proxy tax): 7. Any organization that keeps 768, for details. When a number of 1. Complete lines 85a-h, page 7, of records to substantiate that 90% or changes are made, attach a copy of the Form 990 (note instructions), and more of its members cannot deduct entire revised organizing instrument or 2. Attach page 7 to Form 990-EZ. their dues (or similar amounts) as governing document. business expenses whether or not any

However, if the exempt organization Only certain organizations that are part of their dues are used for lobbying

changes its legal structure, such as tax exempt under sections: purposes.

from a trust to a corporation, it must file • 501(c)(4) (social welfare 8. Any organization that is not a

a new exemption application to organizations), membership organization.

-62- Specific Instructions for Form 990-EZ
Special rules treat affiliated • Any dues paid to another All section 501(c) organizations. An

social welfare organizations, organization that are allocable to exempt organization that is not a CAUTION agricultural and horticultural lobbying or political activities. political organization must file Form

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organizations, and business leagues as 1120-POL if it is treated as having Line 36—Liquidation, parts of a single organization for political organization taxable income Dissolution, Termination, or purposes of meeting the nondeductible under section 527(f)(1).

dues exception. See Rev. Proc. 98-19. Substantial Contraction If a section 501(c) organization If there was a liquidation, dissolution, Exception 2. Section 6033(e)(1) establishes and maintains a section termination, or substantial contraction, $2,000 in-house lobbying exception. 527(f)(3) separate segregated fund, see attach a statement explaining what took An organization satisfies the $2,000 the specific instructions for line 81, place. in-house lobbying exception if it: Form 990.

For a complete liquidation of a 1. Did not receive a waiver for proxy corporation or termination of a trust, Section 501(c)(3) organizations. A

tax owed for the prior year, section 501(c)(3) organization will lose check the Termination box in the 2. Did not make any political its tax-exempt status if it engages in heading of the return. On the attached expenditures or foreign lobbying political activity. statement, show whether the assets expenditures during the 2007 reporting

year, have been distributed and the date. A section 501(c)(3) organization

3. Incurred lobbying expenses Also attach a certified copy of any must pay a section 4955 excise tax for

during the 2007 reporting year resolution, or plan of liquidation or any amount paid or incurred on behalf

consisting only of in-house direct termination, etc., with all amendments of, or in opposition to, any candidate for

lobbying expenses totaling $2,000 or or supplements not already filed. In public office. The organization must pay

less, but excluding: addition, attach a schedule listing the an additional excise tax if it fails to

names and addresses of all persons correct the expenditure timely. a. Any allocable overhead who received the assets distributed in expenses, and A manager of a section 501(c)(3) liquidation or termination; the kinds of b. All direct lobbying expenses of assets distributed to each one; and organization who knowingly agrees to a any local council regarding legislation of each asset’s fair market value. political expenditure must pay a section direct interest to the organization or its 4955 excise tax, unless the agreement A substantial contraction is a partial members. is not willful and there is reasonable liquidation or other major disposition of cause. A manager who does not agree assets except transfers for full Definitions. to a correction of the political consideration or distributions from expenditure may have to pay an Grassroots lobbying refers to current income. additional excise tax. attempts to influence any segment of A major disposition of assets is any the general public regarding legislative disposition for the tax year that is: When an organization promotes a

matters or referendums. candidate for public office (or is used or 1. At least 25% of the fair market controlled by a candidate or prospective Direct lobbying includes value of the organization’s net assets at candidate), amounts paid or incurred attempting to influence: the beginning of the tax year; or for the following purposes are political • Legislation through communication 2. One of a series of related expenditures: with legislators and other government dispositions begun in earlier years that • Remuneration to such individual (a officials, and add up to at least 25% of the net assets candidate or prospective candidate) for • The official actions or positions of the organization had at the beginning of speeches or other services; covered executive branch officials the tax year when the first disposition in • Travel expenses of such individual; through direct communication. the series was made. Whether a major • Expenses of conducting polls, disposition of assets took place through Direct lobbying does not include surveys, or other studies, or preparing a series of related dispositions depends attempting to influence: papers or other material for use by on the facts in each case. • Any local council on legislation of such individual;

direct interest to the organization or its See Regulations section 1.6043-3 • Expenses of advertising, publicity,

members, and and fundraising for such individual; and for special rules and exceptions. • The general public regarding • Any other expense that has the Line 37—Expenditures for legislative matters (grassroots primary effect of promoting public

lobbying). Political Purposes recognition or otherwise primarily

Political organizations described in accruing to the benefit of such Other lobbying includes: section 527 are not required to individual. • Grassroots lobbying, answer this question. • Foreign lobbying, An organization is effectively

• Third-party lobbying, and controlled by a candidate or prospective A political expenditure is one

• Dues paid to another organization candidate only if such individual has a intended to influence the selection,

nomination, election, or appointment of that were used to lobby. continuing, substantial involvement in anyone to a federal, state, or local the day-to-day operations or In-house expenditures include: public office, or office in a political management of the organization. • Salaries, and organization, or the election of • Other expenses of the organization’s A determination of whether the Presidential or Vice Presidential

officials and staff (including amounts primary purpose of an organization is electors. It does not matter whether the

paid or incurred for the planning of promoting the candidacy or prospective attempt succeeds. legislative activities). candidacy of an individual for public An expenditure includes a payment, office is made on the basis of all the In-house expenditures do not distribution, loan, advance, deposit, or facts and circumstances. See section include: gift of money, or anything of value. It 4955 and Regulations section 53.4955. • Any payments to other taxpayers also includes a contract, promise, or

engaged in lobbying or political agreement to make an expenditure, Use Form 4720 to figure and report

activities as a trade or business. whether or not legally enforceable. these excise taxes.

Specific Instructions for Form 990-EZ -63-
Line 38—Loans To or From Line 39—Section 501(c)(7) 1. Is an auxiliary of a fraternal

Officers, Directors, Trustees, Organizations beneficiary society exempt under

section 501(c)(8), and and Key Employees Gross receipts test. A section 2. Limits its membership to the Enter the end-of-year unpaid balance of 501(c)(7) organization may receive up members of a particular religion; or the secured and unsecured loans made to to 35% of its gross receipts, including membership limitation is: or received from officers, directors, investment income, from sources a. A good-faith attempt to further the trustees, and key employees. For outside its membership and remain teachings or principles of that religion, example, if the organization borrowed tax-exempt. Part of the 35% (up to 15% and $1,000 from one officer and loaned of gross receipts) may be from public b. Not intended to exclude $500 to another, none of which has use of a social club’s facilities. individuals of a particular race or color. been repaid, report $1,500 on line 38b. Gross receipts are the club’s income For loans outstanding at the end of from its usual activities and include: Line 40a—Section 501(c)(3) the year, attach a schedule as • Charges, described below. Report any interest Organizations: Disclosure of • Admissions, expense on line 16 and any interest Excise Taxes Imposed Under • Membership fees, income on line 2, 4, or 8, depending on • Dues, Section 4911, 4912, or 4955

the nature of the receivable that • Assessments, and Section 501(c)(3) organizations must created the interest income. • Investment income (such as disclose any excise tax imposed during

When loans should be reported dividends, rents, and similar receipts), the year under section 4911 (excess

separately. In the required schedule, and normal recurring capital gains on lobbying expenditures), 4912

report each loan separately, even if investments. (disqualifying lobbying expenditures),

more than one loan was made to or or, unless abated, 4955 (political Gross receipts do not include: received from the same person, or the expenditures). See sections 4962 and • Capital contributions (see same terms apply to all loans made. 6033(b). Regulations section 1.118-1), Salary advances and other advances • Initiation fees, or for the personal use and benefit of the Line 40b—Section 501(c)(3) • Unusual amounts of income (such as recipient, and receivables subject to and 501(c)(4) organizations: the sale of the clubhouse). special terms or arising from nontypical Disclosure of Section 4958

transactions, must be reported as College fraternities or sororities Excess Benefit Transactions separate loans for each officer, director, or other organizations that and Excise Taxes trustee, and key employee. CAUTION charge membership initiation

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Sections 6033(b) and 6033(f) require When loans should be reported as a fees, but not annual dues, do include section 501(c)(3) and (4) organizations single total. In the required schedule, initiation fees in their gross receipts. to report the amount of taxes imposed report receivables that are subject to under section 4958 (excess benefit If the 35% and 15% limits do not the same terms and conditions affect the club’s exempt status, include transactions) involving the organization, (including credit limits and rate of unless abated, as well as any other the income shown on line 39b on the interest) as receivables due from the club’s Form 990-T. information the Secretary may require general public (occurring in the normal concerning those transactions. See course of the organization’s operations) Investment income earned by a General Instruction P for a discussion as a single total for all the officers, section 501(c)(7) organization is not of excess benefit transactions. directors, trustees, and key employees. tax-exempt income unless it is set aside

Report travel advances for official Attach a statement describing any for:

business of the organization as a single excess benefit transaction, the • Religious, total. • Charitable, disqualified person or persons involved,

• Scientific, and whether or not the excess benefit Schedule format. For each • Literary, transaction was corrected. outstanding loan or other receivable • Educational purposes, or that must be reported separately, the • Prevention of cruelty to children or Line 40c—Taxes Imposed on attached schedule should show the

animals. Organization Managers or following information (preferably in

columnar form): Disqualified Persons If the combined amount of an • Borrower’s name and title, organization’s gross investment income For line 40c, enter the amount of taxes • Original amount, and other unrelated business income imposed on organization managers or • Balance due, exceeds $1,000, it must report the disqualified persons under sections • Date of note, 4912, 4955, and 4958, unless abated. investment income and other unrelated • Maturity date, business income on Form 990-T. • Repayment terms, Line 40d—Taxes Reimbursed • Interest rate, Nondiscrimination policy. A section By the Organization • Security provided by the borrower, 501(c)(7) organization is not exempt For line 40d, enter the amount of tax on • Purpose of the loan, and from income tax if any written policy line 40c that was reimbursed by the • Description and fair market value of statement, including the governing organization. Any reimbursement of the the consideration furnished by the instrument and bylaws, allows excise tax liability of a disqualified discrimination on the basis of race, lender (for example, cash—$1,000; or person or organization manager will be 100 shares of XYZ, Inc., common color, or religion. treated as an excess benefit unless (1) stock—$9,000). However, section 501(i) allows social the organization treats the

The above detail is not required for clubs to retain their exemption under reimbursement as compensation during

receivables or travel advances that may section 501(c)(7) even though their the year the reimbursement is made,

be reported as a single total. However, membership is limited (in writing) to and (2) the total compensation to that

report and identify those totals members of a particular religion, if the person, including the reimbursement, is

separately in the attachment. social club: reasonable.

-64- Specific Instructions for Form 990-EZ
Line 40e—Tax on Prohibited or signature or other authority over a Form TD F 90-22.1 is available by

Tax Shelter Transactions financial account in a foreign country calling 1-800-TAX-FORM

(such as a bank account, securities (1-800-829-3676) or by downloading it Answer “Yes” if the organization was a account, or other financial account); from the IRS website at www.irs.gov. party to a prohibited tax shelter and Do not file it with the IRS or attach it to transaction as described in section

a. The combined value of the Form 990-EZ. 4965(e) at any time during the tax year.

See General Instruction W accounts was more than $10,000 at for Line 43—Section 4947(a)(1)

information about prohibited tax shelter any time during the calendar year; and Nonexempt Charitable Trusts transactions. b. The accounts were not with a

U.S. military banking facility operated Section 4947(a)(1) nonexempt If the organization answered “Yes,” it charitable trusts that file Form 990-EZ by a U.S. financial institution. must complete Form 8886-T. instead of Form 1041 and have no 2. The organization“Yes” to item 1 taxable income under Subtitle A may Line 41—List of States above. use Form 990-EZ to meet its Section List each state with which the If the “Yes” box is checked, enter the 6012 filing requirement by checking the organization is filing a copy of this name of the foreign country or box on line 43. Also, enter on line 43 return in full or partial satisfaction of countries. Attach a separate sheet if the total of exempt-interest dividends state filing requirements. more space is needed. File Form TD F received from a mutual fund or other

Line 42b—Foreign Financial 90-22.1 by June 30, 2008, with the regulated investment company as well

Accounts Department of the Treasury at the as tax-exempt interest received directly.

address shown on the form. Check the “Yes” box if either 1 or 2

below applies:

1. At any time during the calendar

year, the organization had an interest in

Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal

Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying

with these laws. Section 6109 requires return preparers to provide their identifying numbers on the return.

The organization is not required to provide the information requested on a form that is subject to the Paperwork Reduction

Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be

retained as long as their contents may become material in the administration of any Internal Revenue law. The rules

governing the confidentiality of the Form 990, and Form 990-EZ, are covered in Code section 6104.

The time needed to complete and file this form and related schedules will vary depending on individual circumstances. The

estimated average times are:

Form Recordkeeping Learning about the law or Preparing Copying, assembling,

the form the and sending the form

form to the IRS

990 112 hr., 52 min. 16 hr., 4 min. 22 hr., 20 min. 1 hr., 4 min.

990-EZ 29 hr., 10 min. 11 hr., 33 min. 14 hr., 24 min. 32 min.

Schedule A (Form 990 or 990-EZ) 75 hr., 19 min. 11 hr., 37 min. 13 hr., 21 min. -0-

Schedule B (Form 990, 990-EZ, or 4 hr., 46 min. 1 hr., 23 min. 1 hr., 31 min. -0-

990-PF)

We welcome comments on forms. If you have comments concerning the accuracy of these time estimates or

suggestions for making these forms simpler, we would be happy to hear from you. You can write to the Internal Revenue

Service, Tax Products Coordinating Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6526, Washington,

DC 20224.

Do not send the form to this address. Instead, see When, Where, and How To File in General Instruction H.

Specific Instructions for Form 990-EZ -65-
Index

A Compensation ...... 17, 34, 59 Disregarded entities . . . . . . 3, 24, Postage . . . . . . . . . . . . . . . . . . 35

Accounting: Certain disqualified 52 Printing . . . . . . . . . . . . . . . . . . . 35

Fees . . . . . . . . . . . . . . . . . . . . . 35 persons . . . . . . . . . . . . . . . . 34 Dissolution .............. 43, 63 Program service ...... 31, 32

Method . . . . . . . . . . . . . . . . . . . 54 Current officers . . . . . . . . . . . 34 Distributions: Shipping . . . . . . . . . . . . . . . . . . 35

Period ..................... 7 Disqualified persons . . . . . . 34 Disqualified persons . . . . . . 34 Supplies . . . . . . . . . . . . . . . . . . 35

Accounting fees . . . . . . . . . . . . . 60 Former officers . . . . . . . . . . . 34 Dividends Telephone . . . . . . . . . . . . . . . . 35 ............... 29, 51

Accounting method . . . . . 7, 8, 25 Other persons . . . . . . . . . . . . 34 Documents, changes in Extension of time to file ....... 8

Accounting period Completing the header . . . . . 24, ....... 24, 54 organizing ............ 43, 62

Accounts payable . . . . . . . . . . . 39 54 Donations . . . . . . . . . . . . 7, 44, 56 F

Accounts receivable Completing the return: . . . . . . . . . 37 Donor advised funds .... 16, 27 Fair market value . . . . . . . . . . . 16

Activities, change in ..... 43, 62 Rounding off to whole Disqualified person . . . . . . . 50 Federated fundraising

Address and name . . . . . . . . . . 54 dollars . . . . . . . . . . . . . . . . . 22 Exception . . . . . . . . . . . . . . . . . 27 agencies . . . . . . . . . . . . . . . . . 31

Address, change ........ 24, 54 Contemporaneous . . . . . . . . . . 11 Excess benefit Fees . . . . . . . . . . . . . . . . . . . . . . . 60

Address, Website . . . . . . . . . . . 55 Contracts, initial . . . . . . . . . . . . . 18 transaction . . . . . . . . . . . . . 17 Accounting . . . . . . . . . . . . . . . 35

Administrative expenses Contributions . . . . 9, 25, 26, 27, Excess business Copies . . . . . . . . . . . . . . . . . . . 14 . . . . . 59 28, 30, 45, 55, 56, 58 holdings . . . . . . . . . . . . . . . . 50 Fundraising . . . . . . . . . . . . . . . 35 Affiliated organizations . . . . . . 16 Acknowledgment . . . . . . . . . 10 Grants . . . . . . . . . . . . . . . . . . . . 33 Government agencies . . . . . 51 Affiliates . . . . . . . . . . . . . . . . . . . . 59 Co-venture . . . . . . . . . . . . . . . 56 Sponsoring Legal . . . . . . . . . . . . . . . . . . . . . 35 Expenses . . . . . . . . . . . . . . . . . 31 Definitions . . . . . . . . . . . . . . . . 11 organization . . . . . . . . . . . . 27 Figuring gross receipts . . . . . . 4, Payments . . . . . . . . . . . . . . . . 31 Direct public support Dues .... 28, 45, 46, 47, 51, 56, . . . . . . 27 25 Purchases . . . . . . . . . . . . . . . . 31 Disclosure statement . . . . . . 10 57 State or national Filing tests ................... 2

Donation of services . . . . . . 26 Membership ...... 56, 57, 59 organizations . . . . . . . . . . . 31 Final return . . . . . . . 8, 43, 54, 63 Donor advised funds . . . . . . 27 Notices . . . . . . . . . . . . . . . . . . . 45 Voluntary awards or Fixed payment . . . . . . . . . . . . . . 18 Fundraising records ........ 9 grants . . . . . . . . . . . . . . . . . . 31 Foreign accounts . . . . . . . . . . . 50 Government . . . . . . . . . . . . . . 56 Allocations . . . . . . . . . . . . . . . . . . 33 E Foreign organizations . . . . . . . 20 Government grants . . . . . . . 27 Grants, and . . . . . . . . . . . . . . . 33 Electronic filing ............... 8 Form 1041 ................... 5 Grants ................ 26, 56 Alternate test ................ 2 Employee benefit plans (section Form 1098 ................... 5 Indirect . . . . . . . . . . . . . . . . . . . 56 Amended returns . . . . . . 7, 8, 54 501(c)(9), (17), or (18)) ..... 7 Form 1099 series ............ 5 Indirect public support . . . . . 27 Analysis of Income-Producing Insubstantial value . . . . . . . . 10 Employee benefits . . . . . . . . . . 34 Form 1120-POL .............. 6

Activities . . . . . . . . . . . . . . . . . 50 Membership dues Employees, key . . . . . . . . . . . . . 61 Form 990 header: . . . . . . . . . 56

Anti-abuse rule ............... 3 Noncash . . . . . . . . . . . . . . . . . 10 Employer identification number Amended returns . . . . . . . . . 24

Applicable insurance Nondeductible ............. 9 (EIN): Application pending . . . . . . . 24

contract . . . . . . . . . . . . . . . . . . 49 Quid pro quo ..... 10, 11, 44 Disregarded entities . . . . . . . 24 Final return . . . . . . . . . . . . . . . 24

Applicable exempt Special events Section 501(c)(9) Name and address . . . . . . . . 24 . . . . . . . . . . . . 30 organization . . . . . . . . . . . . 49 Sponsoring organizations ....... 24, 54 Form 990-T .................. 5

Application pending . . . . . . 3, 54 organization . . . . . . . . . . . . 27 Equipment . . . . . . . . . . . . . . . . . . 38 Form LM-2 and LM-3, Labor

Assembling and completing Substantiation and Erroneous backup Organization Annual

Form 990 or Form disclosure . . . . . . . . . . . . . . 10 withholding . . . . . . . . . . . . . . . 20 Report ..................... 7

990-EZ ................ 22-24 Sweepstakes, raffles, and Excess benefit Former officers, directors,

Assessments ....... 28, 47, 51 lotteries . . . . . . . . . . . . . . . . 30 transaction .... 15-20, 17, 49 trustees, and key employees,

Assets ........... 29, 38, 57, 60 Use of property . . . . . . . . . . . 26 Churches . . . . . . . . . . . . . . . . . 19 list of . . . . . . . . . . . . . . . . . . . . . 42

Assets, net ............. 39, 60 Contributors, schedule of . . . . 9, Correction . . . . . . . . . . . . . . . . 19 Forms and publications ....... 5

Donor advised funds . . . . . 17, Assistance to individuals . . . . 34 56 Functional expenses . . . . . . . . 32

Attachments . . . . . . . . . . . . . . . . 23 Controlled entities . . . . . . . . . . . 52 19 Allocating indirect . . . . . . . . . 32 Excess payment . . . . . . . . . . 19 Audit guides Fundraising . . . . . . . . . . . . . . . 32 ................. 7 Excise tax . . . . . . . . . . . . . . . . 64 Management and

D Insufficient payment . . . . . . . 19 general . . . . . . . . . . . . . . . . . 32

B Deferred charges . . . . . . . . . . . 38 Revenue sharing Program service . . . . . . . . . . 32 transactions . . . . . . . . . . . . 19 Backup withholding . . . . . . . . . 20 Deferred revenue . . . . . . . . . . . 39 Fund balances ...... 31, 40, 60 Revocation of Balance sheets ......... 36, 60 Definition, key employee . . . . 40 Fundraising . . . . . . . . . . . . . . . . . 32 exemption . . . . . . . . . . . . . . 19 Benefits: Depletion expense . . . . . . . . . . 35 Expenses . . . . . . . . . . . . . . . . . 31 Section 4958 . . . . . . . . . . . . . 64 Disregarded . . . . . . . . . . . . . . 17 Depreciation expense Fees . . . . . . . . . . . . . . . . . . . . . 35 . . . . . . . 35 Excess business Employee . . . . . . . . . . . . . . . . 59 Records for tax deductible Direct expenses . . . . . . . . . . . . . 58 holdings . . . . . . . . . . . . . . . . . . 49 Members ............. 34, 59 contributions ............ 9 Direct public support . . . . . . . . 27 Excise taxes ........ 18, 49, 64 Bonds, tax-exempt . . . . . . . . . . 39 Funds, current . . . . . . . . . . . . . . 40 Disclosure: Exempt function: Bonus, discretionary . . . . . . . . 18 Contributions . . . . . . . . . . . . . 10 Political organization . . . . . . 20

Excess business Exempt organizations, types G

C holdings . . . . . . . . . . . . . . . . 49 of . . . . . . . . . . . . . . . . . . . . . . . . . 4 Gaming ................. 30, 58

Capital stock accounts Federal government material, Exempt purposes: GEN (Group exemption . . . . . . 40 sale . . . . . . . . . . . . . . . . . . . . 15 Activities . . . . . . . . . . . . . . . . . 51 number) .............. 25, 54 Capital surplus . . . . . . . . . . . . . . 40 Prohibited tax shelter Expenses ....... 29, 31, 32, 35, Gifts ................ 25, 27, 55 Cash ................... 37, 60 transactions . . . . . . . . . . . . 21 36, 38, 39, 47, 48, 58, 59, 60, Government: Change of address ...... 24, 54 Section 501(c)(3) 63 Contracts . . . . . . . . . . . . . . . . . 51 Change of name ........ 24, 54 organizations . . . . . . . . . . . 15 Allocating indirect . . . . . . . . . 32 Contributions ......... 27, 56 Changes in net assets . . . . . . . 60 Services furnished . . . . . . . . 15 Equipment rental and Fees . . . . . . . . . . . . . . . . . . . . . 51

Checklist for a properly Statement . . . . . . . . . . . . . . . . 11 maintenance . . . . . . . . . . . 35 Grants ................ 27, 56 completed return ...... 23, 24 Transactions and Fundraising ........... 31, 32 Grants ...... 25, 27, 33, 55, 56, Children, photographs of relationships . . . . . . . . . . . . 15 Management and 59 missing .................... 2 Disqualified persons .... 16, 49, general ............. 31, 32 Allocations, and . . . . . . . . . . . 33

Colleges and universities . . . . 28 64 Occupancy . . . . . . . . . . . . . . . 35 Contributions . . . . . . . . . . . . . 56

Commercial co-venture . . . . . . 27 Disregarded benefits . . . . . . . . 17 Political ............... 44, 63 Donor advised funds . . . . . . 33

-66- Index
Grants (Cont.) Loans: Political: Revenue ............ 31, 39, 51

Equivalent to Officers, directors, et Expenses ............. 44, 47 Special events . . . . . . . . . . . . 30

contributions ....... 26, 56 al . . . . . . . . . . . . . . . . . . 39, 64 Political organization . . . . . 3, 20 Sweepstakes, raffles, and

Government Receivable . . . . . . . . . . . . . . . 37 Penalties . . . . . . . . . . . . . . . . . 12 lotteries . . . . . . . . . . . . . . . . 30

contributions . . . . . . . . . . . 27 Lobbying: Public inspection . . . . . . . . . . 12 Revenue, Expenses, and

Payable . . . . . . . . . . . . . . . . . . 39 Cost allocation . . . . . . . . . . . . 45 Postage expense . . . . . . . . . . . 60 Changes in Net Assets or

Receivable . . . . . . . . . . . . . . . 37 Direct . . . . . . . . . . . . . . . . . . . . 63 Premiums ................... 3 Fund Balances . . . . . . . . . . . 55

Gross receipts . . . . 2, 48, 55, 64 Expenses ............. 46, 47 Prepaid expenses . . . . . . . . . . . 38 Revenue, program

$25,000 or less . . . . . . . . . . . 25 Grassroots . . . . . . . . . . . . . . . 63 Printing expense service ............... 56, 57 . . . . . . . . . . . . 60

Acting as agent ............ 4 In-house expenditures . . . . 63 Private delivery services Revenue, special ...... 8 Figuring . . . . . . . . . . . . . . . . . . 25 Lobbying expenses .... 48, 62, events ............ 30, 55, 58 Program service Gross receipts test ........... 4 63 Revocation of exemption . . . . 19 accomplishments, statement $25,000 ................... 4 Lotteries . . . . . . . . . . . . . . . . . . . . 58 of . . . . . . . . . . . . . . . . . . . . . . . . 60

$5,000 .................... 4 Program service Gross rents . . . . . . . . . . . . . . . . . 29 S

M expenses ............. 31, 32

Group exemption Salaries of employees . . . . . . . 34

Maintenance expense Program service number ............... 25, 54 . . . . . . . 60 Sales of inventory ....... 28, 30 revenue ....... 28, 51, 56, 57

Group return ............ 20, 25 Management and general Government fees and Savings . . . . . . . . . . . . . . . . . . . . . 60

expenses ............. 31, 32 contracts ........... 28, 56 Schedule A . . . . . . . . 2, 5, 26, 56 Medicare and Medicaid Insurance premiums . . . . . . 28 Schedule B . . . . 5, 9, 25, 28, 54,

H payments . . . . . . . . . . . . . . . . . 51 Investment . . . . . . . . . . . . . . . 56 56

Header . . . . . . . . . . . . . . . . . . . . . 24 Meetings, expense of . . . . . . . 35 Investments . . . . . . . . . . . . . . 28 Schedule of contributors . . . . . 9,

Help by phone ............... 1 Membership ............ 31, 59 Medicaid ............. 28, 56 25, 28, 56

Hospitals . . . . . . . . . . . . . . . . . . . 28 Assessments ......... 28, 57 Medicare ............. 28, 56 Section 4911, 4912, or Benefits .............. 34, 59 Section 501(c)(15) 4955 ................. 49, 64 Dues .......... 27, 28, 45, 57 organization . . . . . . . . . . . . 28 Section 4947(a)(1) trusts . . . . 3, I Miscellaneous expenses, Unrelated trade or business 50, 65

Income: reporting for state . . . . . . . . . 36 activities . . . . . . . . . . . . . . . . 28 Section 4958 ......... 15-20, 49 Investment . . . . . . . . . . . . . . . 57 Mortgages payable . . . . . . . . . . 39 Prohibited tax shelter Section 4958, excise taxes: Unrelated business . . . . . . 43, transactions . . . . . . . . . . . . . . 21 Disqualified persons . . . . . . 18

62 Entity managers . . . . . . . . . . 21 Organization Income-Producing Activities: N Entity managers excise managers . . . . . . . . . . . . . . 18

Analysis . . . . . . . . . . . . . . . . . . 50 Name and address . . . . . . . . . . 54 tax . . . . . . . . . . . . . . . . . . . . . 22 Section 501(a), (e), (f), (k), and Name change ........... 24, 54 Entity-level excise tax . . . . . 22 Indirect public support . . . . . . . 27 (n) organizations ........... 2 Net assets ....... 31, 39, 40, 60 Required disclosure . . . . . . . 22 Information Regarding Taxable Section 501(c)(12) Nondeductible dues .... 45, 46, Tax-exempt entities . . . . . . . 21 Subsidiaries and Disregarded organizations . . . . . . . . . . . . . 48 47 Proxy tax ............... 45, 47 Entities . . . . . . . . . . . . . . . . . . . 52 Section 501(c)(15) Nondiscrimination policy . . . . 48, Public inspection ......... 12-15 Information Regarding Transfers organizations .............. 2

Associated With Personal 64 Public interest law firms . . . . . 20 Section 501(c)(3) ...... 26, 44, Benefit Contracts . . . . . . . . . 52 Nonexempt charitable Publication 78, Cumulative list of 56, 63 trusts . . . . . . . . . . . . . . . . . . . . . 50 section 170(c) Initial contracts . . . . . . . . . . . . . . 18 Applicable Notes payable . . . . . . . . . . . . . . 39 organizations .............. 3 Initial return ............. 24, 54 organization . . . . . . . . . . . . 16

Notes receivable . . . . . . . . . . . . 37 Publications and forms ....... 5 Interest ............. 29, 35, 51 Disclosure of transactions and

Intermediate Sanction Number of employees . . . . . . . 50 Publicly traded securities . . . . 38 relationships . . . . . . . . . . . . 15

Regulations ............ 15-20 Purchases from affiliates . . . . 31 Excess benefit

Inventory . . . . . . . . . . . . . . . . . . . 59 Purpose of form .............. 1 transaction . . . . . . . . . . . . . 64

O Section 501(c)(4): Investment .......... 29, 38, 60

Dividend . . . . . . . . . . . . . . . . . . 57 Occupancy expense . . . . . . . . 60 Applicable

Interest . . . . . . . . . . . . . . . . . . . 57 Officers, directors, trustees, and Q organization . . . . . . . . . . . . 16

Program- related key employees, list of . . . . 40, Qualified state or local political Excess benefit . . . . . . . . . . 56

Rents 61 organizations .............. 3 transaction . . . . . . . . . . . . . 64 . . . . . . . . . . . . . . . . . . . . 57

Savings and temporary Organization(s): Quid pro quo Lobbying expenses . . . . . . 45,

Affiliated . . . . . . . . . . . . . . . . . . 16 contribution . . . . . . . . . . . . . . . 11 62 cash . . . . . . . . . . . . . . . . . . . 37 Foreign countries, in . . . . . . 20 Membership dues ..... 45, 62

Managers ............ 49, 64 Political expenses ..... 45, 62 Not required to file ......... 3 R J Section 501(c)(5): Relation to other . . . . . . . . . . 44 Raffles . . . . . . . . . . . . . . . . . . . . . . 58 Joint costs . . . . . . . . . . . . . . . . . . 36 Lobbying expenses . . . . . . 45, Type ................. 25, 55 Reasonableness, presumption 62 U.S. possessions, in . . . . . . 20 of . . . . . . . . . . . . . . . . . . . . . . . . 18 Membership dues ..... 45, 62

K Rebuttable presumption . . . . . 18 Political expenses ..... 45, 62

Key employee . . . . . . . . . . . . . . 40 Receivable . . . . . . . . . . . . . . . . . 64 Section 501(c)(6): P Account . . . . . . . . . . . . . . . . . . 37 Lobbying expenses . . . . . . 45, Paid preparer . . . . . . . . . . . . . . . 22 Grants . . . . . . . . . . . . . . . . . . . . 37 62

L Paid-in capital . . . . . . . . . . . . . . . 40 Pledges . . . . . . . . . . . . . . . . . . 37 Membership dues ..... 45, 62

Labor organizations (section Reconciliation Paperwork reduction act Political expenses ..... 45, 62

501(c)(5)).................. 7 notice . . . . . . . . . . . . . . . . . . . . 65 statements . . . . . . . . . . . . . . . 40 Section 501(c)(7) Land, buildings and Recordkeeping Payables ............... 39, 64 . . . . . . . . . . . . . . 22 organizations ......... 48, 64

equipment ............ 38, 60 Payments to affiliates . . . . . . . 31 Relationship of Activities to the Section 501(c)(9) Land, buildings, and Accomplishment of Exempt Payroll taxes . . . . . . . . . . . . . . . . 34 organizations ......... 24, 54

equipment . . . . . . . . . . . . . . . . 40 Penalties . . . . . . . . . . . . . . 5, 9, 12 Purposes . . . . . . . . . . . . . . . . . 51 Section 501(c)(9), (17), (18) Legal fees .............. 35, 60 Pension plan Rent expense ........... 29, 60 organizations ......... 26, 56

Liquidation .............. 43, 63 Rental income (loss) contributions . . . . . . . . . . . . . . 34 . . . . . . . . 51 Section 6033(e):

List of Officers, Directors, Requirements for a properly Personal benefit Exceptions, in-house

Trustees, and Key completed Form 990 or Form contracts ......... 20, 52, 62 lobbying . . . . . . . . . . . . . . . . 63

Employees ........... 40, 61 Phone help .................. 1 990-EZ ................ 22-24 Exceptions, nondeductible

List of states . . . . . . . . . . . . . . . . 50 Pledges receivable . . . . . . . . . . 37 Retained earnings . . . . . . . . . . . 40 dues . . . . . . . . . . . . . . . . . . . 62

Index -67-
Section 6033(e): (Cont.) Sponsoring organization . . . . . 27 T Trusts, section

Reporting requirements and State filing requirement ....... 6 Tax Forms Committee . . . . . . . 65 4947(a)(1) . . . . . . . . . . . . . 3, 65

proxy tax . . . . . . . . . . . . . . . 62 State, reporting to . . . . . . 6, 8, 36 Taxable subsidiaries . . . . . . . . 52

Securities ............... 29, 57 Statement of Functional Taxes, reimbursement of . . . . 64 U

SFAS 116 .......... 31, 33, 55 Expenses . . . . . . . . . . . . . . . . . 32 Tax-exempt bond Unrelated business

SFAS 117 . . . . . . . . . . . . . . . . . . 39 Statement of Position liabilities . . . . . . . . . . . . . . . . . . 39 income ............... 43, 62

Shipping expense . . . . . . . . . . . 60 98-2 . . . . . . . . . . . . . . . . . . . . . . 36 Tax-exempt organization, public Unrelated trade or business

Signature . . . . . . . . . . . . . . . . . . . 22 Statement of program service inspection rules . . . . . . . . . . . 12 activities .............. 28, 56

Solicitations of TE/GE EO accomplishments ..... 36, 60 Utilities expense . . . . . . . . . . . . 60

contributions . . . . . . . . . . . . . . 45 Substantial contributor . . . . . . 16 Determinations ............ 2

Solicitations of nondeductible Substantial influence . . . . . . . . 16 Telephone number ...... 24, 54 W contributions ............... 9 Substantiation . . . . . . . . . . . . . . 11 Termination ............. 43, 63 Wages of employees . . . . . . . . 34 Special events ...... 26, 27, 30, Substitute forms for Form 990 or Test, facts and Website address ........ 25, 55 55, 58 Form 990-EZ .............. 7 circumstances . . . . . . . . . . . . 16 Who must file ................ 2 Sales . . . . . . . . . . . . . . . . . . . . . 30 Supporting organization . . . . 16, Transfers: Withholding: Specific instructions for Form 17 Controlled entities . . . . . . . . . 52 Backup . . . . . . . . . . . . . . . . . . . 20 990 (See also Table of Excess business Personal benefit

Contents for these specific holdings . . . . . . . . . . . . . . . . 50 contracts . . . . . . . . . . . . . . . 20

instructions.) . . . . . . . . . . . . . . 24 ■ Sweepstakes, raffles, and Travel expense . . . . . . . . . . . . . 35

Specific Instructions for Form lotteries .............. 30, 58 Trust fund recovery 990-EZ (See also Table of penalty .................... 5

Contents for these specific Trust principal account . . . . . . 40 instructions.) . . . . . . . . . . . . . . 54

-68- Index