Department of the Treasury 2008 Internal Revenue Service

Instructions for Form 990

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)

Contents Page Contents Page

What’s New ....................................1 Appendix I. Use of Form 990 or 990-EZ To Satisfy

Purpose of Form ................................3 State Reporting Requirements . . . . . . . . . . . . . . . . . . . 69

Phone Help ....................................3 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Email Subscription ...............................3

Photographs of Missing Children Section references are to the Internal Revenue Code unless .....................3

General Instructions otherwise noted. ..............................3

A. Who Must File ..............................3

B. Organizations Not Required To File Form 990 . . .....4

C. Sequencing List To Complete the Form ............5 What’s New

D. Accounting Periods and Methods ................5 Redesigned Form 990 and Instructions for 2008 E. When, Where, and How To File ..................6

F. Extension of Time To File ......................6 Overview and major changes. The Form 990 has been

G. Amended Return/Final Return redesigned for 2008. The new form consists of an 11-page, ...................6

H. Failure To File Penalties 11-part core form that is required to be completed by all .......................6 organizations that file Form 990 and schedules to be completed I. Group Return ...............................7 by those organizations that satisfy the applicable requirements J. Requirements for a Properly Completed Form for each schedule. 990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Specific Instructions The following provides a brief summary of some major ..............................8

changes and features of the new form and an outline of the new Entity Section .................................8 core form and schedules. This summary does not describe all Part I. Summary ...............................9 of the new features or changes. Some of the information Part II. Signature Block ..........................9 previously required by the 2007 Form 990 has been eliminated Part III. Statement of Program Service or revised, and the new 2008 Form 990 requires information not Accomplishments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 previously required. Some information previously required of Part IV. Checklist of Required Schedules . . . . . . . . . . . . 11 only certain types of organizations now is required of all types Part V. Statements Regarding Other IRS Filings and of organizations completing the form. The organization should Tax Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 carefully review the new form and instructions in order to make

Part VI. Governance, Management, and Disclosure . . . . 15 sure it satisfies the new form’s reporting requirements. See the

Part VII. Compensation of Officers, Directors, IRS website at www.irs.gov and click on the Charities &

Trustees, Key Employees, Highest Compensated Non-Profits tab for more information.

Employees, and Independent Contractors . . . . . . . . . . . 20 Some areas of major changes in reporting requirements Part VIII. Statement of Revenue . . . . . . . . . . . . . . . . . . . 28 include governance and compensation of officers, directors,

Part IX. Statement of Functional Expenses . . . . . . . . . . . 33 trustees, key employees, and highest compensated employees.

Part X. Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . 37 For example, Part VI. Governance, Management, and

Part XI. Financial Statements and Reporting . . . . . . . . . . 39 Disclosure, is a new section that asks questions about the

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 organization’s governance structure, policies, and disclosure

Appendix of Special Instructions practices. Part VII. Compensation of Officers, Directors, . . . . . . . . . . . . . . . . . . . . 56 Trustees, Key Employees, Highest Compensated Employees, Appendix A. Exempt Organizations Reference Chart . . . . 56 and Independent Contractors, also contains important changes, Appendix B. How To Determine Whether an including new definitions of officer and key employee applicable Organization’s Gross Receipts Are Normally to all organizations, and the extension of reporting $25,000 (or $5,000) or Less . . . . . . . . . . . . . . . . . . . . . 57 compensation paid to the top five highest compensated Appendix C. Special Gross Receipts Test For employees from organizations described in sections 501(c)(3) Determining Exempt Status of Section 501(c)(7) or 4947(a)(1), as was previously the case, to all organizations and Section 501(c)(15) Organizations . . . . . . . . . . . . . . 57 filing the Form 990, such as social welfare organizations, Appendix D. Public Inspection of Returns . . . . . . . . . . . . 58 business leagues, trade associations, and social clubs.

Appendix E. Group Returns—Reporting Information Other areas of significant change include determination of on Behalf of the Group. . . . . . . . . . . . . . . . . . . . . . . . . 61 public charity status and public support; supplemental financial Appendix F. Disregarded Entities and Joint statement reporting; and fundraising, special events, and Ventures—Inclusion of Activities and Items. . . . . . . . . . 62 gaming. For organizations described in sections 501(c)(3) or Appendix G. Section 4958 Excess Benefit 4947(a)(1), Schedule A has been revised to emphasize

Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 reporting of public charity status and public support. Schedule D

Appendix H. Forms and Publications To File or Use . . . . 68 contains new reporting requirements for conservation

Cat. No. 11283J
organizations; museums and other organizations maintaining maintaining endowments or donor advised funds and similar

collections of works of art and other items; credit counseling funds or accounts.

organizations and others holding funds in escrow or custodial • Schedule E. Schools is the private school questionnaire

arrangements; and organizations maintaining endowments. previously contained in former Schedule A.

Schedule G requires reporting of certain information regarding • Schedule F. Statement of Activities Outside the United States

arrangements with professional fundraisers, fundraising events, is used to report the organization’s activities conducted outside

and gaming activities. Other new schedules include those for the United States.

reporting foreign activities (Schedule F); hospitals (Schedule H); • Schedule G. Supplemental Information Regarding tax-exempt bonds (Schedule K); non-cash contributions Fundraising or Gaming Activities requires reporting by (Schedule M); and related organizations (Schedule R). organizations that reported certain amounts of professional

fundraising expenses, revenue from special events, and The following is an outline of the parts of the core form and revenue from gaming activities. the new schedules. • Schedule H. Hospitals is completed by organizations that Core form. The core form required to be completed by all operate one or more facilities licensed or registered as a organizations consists of the following eleven parts. hospital under state law. • Part I. Summary provides certain important information • Schedule I. Grants and Other Assistance to Organizations, regarding the organization’s mission, activities, and current and Governments and Individuals in the U.S. is used to report prior years’ financial results. grants and other assistance provided by the organization to • Part II. Signature Block contains the signature of an others within the United States. organization’s officer, and, if applicable, paid preparer. • Schedule J. Compensation Information is completed by • Part III. Statement of Program Service Accomplishments organizations to provide detailed compensation information for requires reporting of the organization’s new, ongoing, and certain current or former officers, directors, trustees, key discontinued exempt purpose achievements and related employees, and highest compensated employees, and certain revenue and expenses. information regarding the organization’s compensation • Part IV. Checklist of Required Schedules is used by the practices and arrangements. organization to determine which schedules it must complete • Schedule K. Supplemental Information for Tax-Exempt and file with the IRS as part of the Form 990. Bonds is completed by organizations with outstanding • Part V. Statements Regarding Other IRS Filings and Tax tax-exempt bond liabilities. Compliance is used by the organization to report its compliance • Schedule L. Transactions with Interested Persons is with other federal tax reporting and substantiation requirements. completed by organizations that engage in certain types of • Part VI. Governance, Management, and Disclosure requires relationships or transactions with interested persons, including information regarding the organization’s governing body and excess benefit transactions, loans, grants or other financial management, policies, and disclosure practices. assistance, and other financial or business transactions or • Part VII. Compensation of Officers, Directors, Trustees, Key arrangements. Employees, Highest Compensated Employees, and • Schedule M. Non-Cash Contributions is used to report Independent Contractors is used to report compensation paid to contributions other than cash received by the organization. such persons by the organization and its related organizations • Schedule N. Liquidation, Termination, Dissolution, or reported on Forms W-2, Forms 1099-MISC, and as certain Significant Disposition of Assets is used to report major other compensation. dispositions of assets by the organization. • Part VIII. Statement of Revenue, Part IX. Statement of • Schedule O. Supplemental Information to Form 990 is used Functional Expenses, and Part X. Balance Sheet, comprise the by organizations to provide supplemental information to financial statements of the organization for federal tax reporting describe or explain the organization’s responses to questions purposes. contained in the core form or schedules. • Part XI. Financial Statements and Reporting is used to report • Schedule R. Related Organizations and Unrelated information regarding the organization’s accounting methods Partnerships is used to provide information regarding the and its compiled, reviewed, or audited financial statements. organization’s relationships with other exempt and taxable Schedules. The 2008 Form 990 contains 16 schedules. Each organizations. organization must complete Part IV. Checklist of Required

Schedules, to determine those schedules it must complete. Instructions, glossary, and appendices. The 2008

These schedules replace the prior schedules and most required Instructions for Form 990 contain a sequencing list to help

attachments previously constructed and completed by the filing organizations determine the order in which to complete various

organization. All filers will be required to provide certain portions of the form (see Sequencing List To Complete the

narrative responses on Schedule O (Form 990). The following Form); revised general and specific instructions for the core

is a list and brief description of the new schedules. form and schedules; a glossary of key terms; and a

• Schedule A. Public Charity Status and Public Support is compensation table to help organizations determine where and

completed by organizations described in sections 501(c)(3) and how to report types of compensation paid to officers, directors,

4947(a)(1) to provide information relevant to status as a public trustees, key employees, and highest compensated employees

charity, including satisfaction of applicable public support tests (see Specific Instructions for Part VII). The new instructions

on an ongoing basis. also contain new appendices for reporting requirements and

• Schedule B. Schedule of Contributors guidance regarding group returns (see Appendix E), and for is completed by

organizations to provide information regarding contributions organizations to report activities conducted indirectly through

joint ventures and disregarded entities (see Appendix F). they report as revenues.

• Schedule C. Political Campaign and Lobbying Activities is

completed by organizations that conduct political campaign Form 990-EZ Filing Amounts for 2008–2010

activities, organizations described in sections 501(c)(3) and Form 990-EZ, Short Form Return of Organization Exempt From

4947(a)(1) that conduct lobbying activities, and organizations Income Tax, may be filed by most organizations with gross

subject to section 6033(e) notice and reporting requirements receipts and total assets below certain amounts. For calendar

and potential proxy tax on certain membership dues, or fiscal years beginning in 2008, most organizations with gross

assessments, and similar amounts. receipts less than $1,000,000 and total assets less than

• Schedule D. Supplemental Financial Statements is $2,500,000 may choose to file Form 990 or Form 990-EZ. (For

completed by organizations to supplement certain balance 2007, these amounts were less than $100,000 gross receipts

sheet information, as well as conservation organizations, and $250,000 total assets.) For 2009, most organizations with

museums and other organizations maintaining collections, gross receipts less than $500,000 and total assets less than

credit counseling organizations and others holding funds in $1,250,000 may choose to file Form 990 or Form 990-EZ.

escrow or custodial arrangements, and organizations Beginning in 2010, most organizations with gross receipts less

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File Form 990-EZ for ................. If gross receipts are less than .......... And if total assets are less than ........

2008 (generally filed in 2009) $1,000,000 $2,500,000

2009 (generally filed in 2010) $500,000 $1,250,000

2010 and later $200,000 $500,000

than $200,000 and total assets less than $500,000 may file photographs and calling 1-800-THE-LOST (1-800-843-5678) if

either Form 990 or Form 990-EZ. you recognize a child.

Although Form 990-EZ was not redesigned for 2008, some

changes have been made. Organizations that file the 2008 General Instructions

Form 990-EZ must review the instructions for Schedules A, B,

C, E, G, L, and N to determine whether they must now report Overview of Form 990 any of their activities or information on those schedules. Form

990-EZ filers will not be required to complete any of the other

2008 Form 990 schedules.

The General Instructions apply to Form 990. See also the New annual electronic filing requirement for Specific Instructions for this form.

small tax-exempt organizations Note. Terms in bold are defined in the Glossary of the

Many small tax-exempt organizations now must file new Form Instructions for Form 990.

990-N, Electronic Notice (e-Postcard) for Tax-Exempt

Organizations Not Required to File Form 990 or 990-EZ, if they Certain Form 990 filers must file electronically. See E.

choose not to file Form 990 or Form 990-EZ. See the IRS When, Where, and How To File for who must file

website at www.irs.gov and click on the Form 990-N CAUTION electronically.

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(e-Postcard) tab for more information. Form 990 is an annual information return required to be filed

with the IRS by most organizations exempt from income tax Purpose of Form under Internal Revenue Code section 501(a), and certain Form 990 and Form 990-EZ are used by tax-exempt political organizations and nonexempt charitable trusts. Parts

organizations, nonexempt charitable trusts, and section 527 I through XI of the form must be completed by all filing political organizations to provide the IRS with the information organizations and require reporting on the organization’s required by section 6033. exempt and other activities, finances, governance, compliance

An organization’s completed Form 990, Form 990-EZ, and with certain federal tax filings and requirements, and

Form 990-T, Exempt Organization Business Income Tax compensation paid to certain persons. Additional schedules are

Return, of 501(c)(3) organizations, are available for public required to be completed depending upon the activities and

inspection as required by section 6104. Schedule B (Form 990, type of the organization. By completing Part IV, the organization

990-EZ, or 990-PF), Schedule of Contributors, is available for determines which schedules are required. The entire completed

public inspection for section 527 organizations filing Form 990 Form 990 filed with the IRS, except for certain contributor

or 990-EZ. For other organizations that file Form 990 or Form information on Schedule B (Form 990, 990-EZ, or 990-PF), is

990-EZ, parts of Schedule B (Form 990, 990-EZ, or 990-PF), required to be made available to the public by the IRS and the

may be open to public inspection. See the instructions for filing organization, and may be required to be filed with state

Schedule B (Form 990, 990-EZ, or 990-PF) for more details. governments to satisfy state reporting requirements.

Some members of the public rely on Form 990 or Form Helpful Hints. The following hints may help you more

990-EZ as their primary or sole source of information about a efficiently review these instructions and complete the form.

particular organization. How the public perceives an • See C. Sequencing List To Complete the Form that provides

organization in such cases may be determined by information guidance on the recommended order for completing the form

presented on its return. Therefore, the return must be complete, and applicable schedules.

accurate, and fully describe the organization’s programs and • Throughout these instructions, terms that are highlighted in

accomplishments. bold are defined in the Glossary.

Use Form 990 or Form 990-EZ to send a required election to • Throughout these instructions, “the organization” and the

the IRS, such as the election to capitalize costs under section “filing organization” both refer to the organization filing Form

990. 266. • The examples appearing throughout the instructions to Form

Phone Help 990 are illustrative only. They are for the purpose of completing

this form and are not all-inclusive. If you have questions and/or need help completing Form 990, • Instructions to the Form 990 schedules are published please call 1-877-829-5500. This toll-free telephone service is separately from these instructions. available Monday through Friday.

Organizations that have total gross income from

Email Subscription unrelated trades or businesses of at least $1,000 also CAUTION are required to file Form 990-T, Exempt Organization

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The IRS has established a new subscription-based email

service for tax professionals and representatives of tax-exempt Business Income Tax Return, in addition to any required Form

990, 990-EZ, or 990-N. organizations. Subscribers will receive periodic updates from

the IRS regarding exempt organization tax law and regulations,

available services, and other information. To subscribe, visit A. Who Must File

www.irs.gov/eo. Most organizations exempt from income tax under section

501(a) must file an annual information return (Form 990 or

Form 990-EZ) or an annual electronic notice (Form 990-N),

Photographs of Missing Children depending upon the organization’s gross receipts and total

assets. The Internal Revenue Service is a proud partner with the

National Center for Missing and Exploited Children. For 2008, Form 990 must be filed by an organization exempt

Photographs of missing children selected by the Center may from income tax under section 501(a) (including an organization

appear in instructions on pages that would otherwise be blank. that has not applied for recognition of exemption) if it has either

You can help bring these children home by looking at the (1) gross receipts greater than or equal to $1,000,000 or (2)

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total assets greater than or equal to $2,500,000 at the end of 5. A charitable organization supported partly by funds

the tax year. This includes: contributed by Federal, state, or local governmental units, or

• Organizations described in section 501(c)(3) (other than primarily by contributions of the general public, whose gross

private foundations), and receipts are normally not more than $5,000.

• Organizations described in other 501(c) subsections (other If the organization is described in (3), (4), or (5), then it must file than black lung benefit trusts). Form 990-N unless it voluntarily files Form 990 or Form 990-EZ. Gross receipts are the total amounts the organization

received from all sources during its annual accounting period, Section 501(c)(7) and section 501(c)(15) organizations. A

without subtracting any costs or expenses. See Appendix B for section 501(c)(7) or section 501(c)(15) organization applies the

a discussion of gross receipts. same gross receipts test as other organizations to determine

whether it must file Form 990, but uses a different definition of For purposes of Form 990 reporting, the term section gross receipts to determine whether it qualifies as tax-exempt 501(c)(3) includes organizations exempt under sections 501(e) for the tax year. See Appendix C for more information and (f) (cooperative service organizations), 501(k) (child care

organizations), and 501(n) (charitable risk pools). In addition, Section 527 political organizations. Tax-exempt political any organization described in one of these sections is also organizations must file Form 990 or Form 990-EZ unless subject to section 4958 if it obtains a determination letter from excepted under B. Organizations Not Required To File Form the IRS stating that it is described in section 501(c)(3). 990. A qualified state or local political organization must file

Form 990-N. If an organization normally has gross receipts of Form 990 or Form 990-EZ only if it has gross receipts of

$25,000 or less, it must submit Form 990-N, Electronic Notice $100,000 or more. Political organizations are not required to file

(e-Postcard) for Tax-Exempt Organizations Not Required To Form 990-N.

File Form 990 or 990-EZ, if it chooses not to file Form 990 or Section 4947(a)(1) nonexempt charitable trusts. A Form 990-EZ (with exceptions described below for certain nonexempt charitable trust described under section section 509(a)(3) supporting organizations and for certain 4947(a)(1) (if it is not treated as a private foundation) is required organizations described in B. Organizations Not Required To to file Form 990 or Form 990-EZ, unless excepted under B. File Form 990). See Appendix B for a discussion of gross Organizations Not Required To File Form 990. Such a trust is receipts. treated like an exempt section 501(c)(3) organization for Form 990-EZ. For tax years beginning in 2008, if an purposes of completing the form. All references to a section organization has gross receipts less than $1,000,000 and 501(c)(3) organization shall include a section 4947(a)(1) trust total assets at the end of the year less than $2,500,000, it may (for instance, such a trust must complete Schedule A (Form 990 choose to file Form 990-EZ, Short Form Return of Organization or 990-EZ), Public Charity Status and Public Support), unless Exempt From Income Tax, instead of Form 990. See the otherwise specified. If such a trust does not have any taxable instructions for Form 990-EZ for more information. See the income under Subtitle A of the Code, it can file Form 990 or special rules described later regarding controlling Form 990-EZ to meet its section 6012 filing requirement and organizations under section 512(b)(13) and sponsoring does not have to file Form 1041, U.S. Income Tax Return for organizations of donor advised funds. Estates and Trusts.

The IRS has provided transitional relief to small and Returns when exempt status not yet established. An mid-size organizations, allowing many to file Form organization is required to file Form 990 in accordance with 990-EZ for 2008 and 2009 instead of Form 990, and

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these instructions if the organization claims exempt status providing them additional time to become familiar with the new under section 501(a) but has not yet established such exempt Form 990 and its requirements. The table at the top of page 3 status by filing Form 1023, Application for Recognition of of these instructions describes the modified thresholds for filing Exemption Under Section 501(c)(3) of the Internal Revenue Form 990-EZ (instead of Form 990) during this transition period. Code, or Form 1024, Application for Recognition of Exemption

Foreign and U.S. possession organizations. Foreign Under Section 501(a) or for Determination Under Section 120,

organizations and U.S. Possession as well as domestic and receiving an IRS letter recognizing tax-exempt status. In

organizations must file Form 990 or 990-EZ unless specifically such a case, the organization must check the “Application

excepted under B. Organizations Not Required To File Form pending” checkbox in item B on Form 990, page 1 (whether or

990. Report amounts in U.S. dollars and state what conversion not a Form 1023 or 1024 has been filed) to indicate that Form

990 is being filed in the belief that the organization is exempt rate the organization uses. Combine amounts from within and

outside the U.S. and report the total for each item. All under section 501(a), but that the IRS has not yet recognized

such exemption. information must be written in English.

Sponsoring organizations of donor advised funds.

Sponsoring organizations of donor advised funds, if B. Organizations Not Required To File

required to file an annual information return for the year, must Form 990 file Form 990 and not Form 990-EZ.

An organization does not have to file Form 990 or 990-EZ even Controlling organizations described in section 512(b)(13). if it has at least $1,000,000 of gross receipts or $2,500,000 of A controlling organization of one or more controlled entities, total assets if it is described below (except for section as described in section 512(b)(13), must file Form 990 and not 509(a)(3) supporting organizations, which are described Form 990-EZ if it is required to file an annual information return earlier). See A. Who Must File for determining whether the for the year and if there was any transfer of funds between the organization may file Form 990-EZ instead of Form 990. An controlling organization and any controlled entity during the organization described in items 10, 11, or 13 below is required year. to file Form 990-N unless it voluntarily files Form 990, 990-EZ, Section 509(a)(3) supporting organizations. A section or 990-BL. 509(a)(3) supporting organization must file Form 990 or

990-EZ, even if its gross receipts are normally $25,000 or less, Certain religious organizations.

unless it qualifies as one of the following. 1. A church, an interchurch organization of local units of a

1. An integrated auxiliary of a church. church, a convention or association of churches, or an

2. The exclusively religious activities of a religious order. integrated auxiliary of a church as described in Regulations

3. A religious organization whose gross receipts are section 1.6033-2(h) (such as a men’s or women’s organization,

normally not more than $5,000. religious school, mission society, or youth group).

4. An organization whose gross receipts are normally not 2. A church-affiliated organization that is exclusively

more than $5,000 that supports a section 501(c)(3) religious engaged in managing funds or maintaining retirement programs

organization. and is described in Rev. Proc. 96-10, 1996-1 C.B. 577.

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3. A school below college level affiliated with a church or 3. Determine the organization’s officers, directors, trustees,

operated by a religious order described in Regulations section key employees, and five highest compensated employees

1.6033-2(g)(1)(vii). required to be listed on Form 990, Part VII, Section A.

4. A mission society sponsored by, or affiliated with, one or 4. Complete Parts VIII, IX, and X of Form 990.

more churches or church denominations, if more than half of 5. Complete line G in the Entity section of Form 990, on

the society’s activities are conducted in, or directed at, persons page 1.

in foreign countries. 6. Complete Parts III, V, VII, and XI of Form 990.

5. An exclusively religious activity of any religious order 7. See the instructions for Schedule L (Form 990) and

described in Rev. Proc. 91-20, 1991-1 C.B. 524. complete Schedule L (Form 990) (if required).

Certain governmental organizations. 8. Complete Part VI of Form 990. Transactions reported on

Schedule L (Form 990) are relevant to determining 6. A state institution whose income is excluded from gross independence of members of the governing body under income under section 115. Form 990, Part VI, line 1b. 7. A governmental unit or affiliate of a governmental unit 9. Complete Part I of Form 990 based on information described in Rev. Proc. 95-48, 1995-2 C.B. 418. derived from other parts of the form. 8. An organization described in section 501(c)(1). A section 10. Complete Part IV of Form 990 to determine which 501(c)(1) organization is a corporation organized under an Act schedules must be completed by the organization. of Congress that is an instrumentality of the United States, and 11. Complete applicable schedules (for “Yes” boxes that exempt from federal income taxes. were checked in Part IV). Use Schedule O (Form 990), to Certain political organizations. provide required supplemental information and other narrative 9. A political organization that is: explanations. • A state or local committee of a political party; 12. Complete Part II, Signature Block, of Form 990. • A political committee of a state or local candidate;

• A caucus or association of state or local officials; or A public charity described in section 170(b)(1)(A)(iv) or • Required to report under the Federal Election Campaign (vi) or section 509(a)(2) that is not within its initial five Act of 1971 as a political committee (as defined in section years of existence should first complete Part II or III of

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301(4) of such Act). Schedule A, Public Charity Status & Public Support, (Form 990 Certain organizations with limited gross receipts. or 990-EZ) to ensure that it continues to qualify as a public 10. An organization whose gross receipts are normally charity for the tax year. If it fails to qualify as a public charity, $25,000 or less. To determine what an organization’s gross then it must file Form 990-PF rather than Form 990 or Form receipts “normally” are, see Appendix B, How to Determine 990-EZ. Whether an Organization’s Gross Receipts Are Normally

$25,000 (or $5,000) or Less.

11. A foreign organization, including organizations located D. Accounting Periods and Methods

in U.S. possessions, whose gross receipts from sources

within the U.S. are normally $25,000 or less. See IRS Pub. 538, Accounting Periods and Methods,

about reporting changes to accounting periods and Certain organizations that file different kinds of annual methods.

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information returns.

12. A private foundation (including a private operating

foundation) exempt under section 501(c)(3) and described in Accounting Periods

section 509(a). Use Form 990-PF, Return of Private Calendar year. Use the 2008 Form 990 to report on the 2008 Foundation. Also use Form 990-PF for a taxable private calendar year accounting period. A calendar year accounting foundation, a section 4947(a)(1) nonexempt charitable trust period begins on January 1 and ends on December 31. treated as a private foundation, and a private foundation

terminating its status by becoming a public charity under Fiscal year. If the organization has established a fiscal year

section 507(b)(1)(B) (for tax years within its 60-month accounting period, use the 2008 Form 990 to report on the

termination period). If the organization successfully terminates, organization’s fiscal year that began in 2008 and ended 12

then it files Form 990 or Form 990-EZ in its final year of months later. A fiscal year accounting period should normally

termination. coincide with the natural operating cycle of the organization. Be

13. A black lung benefit trust described in section 501(c)(21). certain to indicate in item A of the Entity section of Form 990

Use Form 990-BL, Information and Initial Excise Tax Return for the date the organization’s fiscal year began in 2008 and the

Black Lung Benefit Trusts and Certain Related Persons. date the fiscal year ended in 2009.

14. A religious or apostolic organization described in section Short period. A short accounting period is a period of less 501(d). Use Form 1065, U.S. Return of Partnership Income. than 12 months, which exists when an organization first 15. A stock bonus, pension, or profit-sharing trust that commences operations, changes its accounting period, or qualifies under section 401. Use Form 5500, Annual Return/ terminates. If the organization’s short year ended prior to Report of Employee Benefit Plan. December 31, 2008 (not on or after December 31, 2008), it may

use 2007 Form 990 to file for the short year.

C. Sequencing List To Complete the Accounting period change. If the organization changes its

accounting period, it must file a Form 990 for the short period Form and Schedules resulting from the change. Write “Change of Accounting Period”

You may find the following chart helpful. It limits jumping from at the top of this short-period return.

one part of the form to another to make a calculation or If the organization previously changed its accounting period determination needed to complete an earlier part. Certain later within the 10-calendar-year period that includes the beginning parts of the form must first be completed in order to complete of the short period, and it had a Form 990 filing requirement at earlier parts. In general, first complete the core form, and then any time during that 10-year period, it must also attach a Form complete alphabetically Schedules A–N and Schedule R, 1128 to the short-period return. See Rev. Proc. 85-58, 1985-2 except as provided below. Schedule O should be completed as C.B. 740.

the core form and schedules are completed.

1. Complete lines A through F and H(a) through M in the Accounting methods

Entity section of Form 990, on page 1. Unless instructed otherwise, the organization should generally

2. See the instructions for Schedule R and determine the use the same accounting method on the return to report

organization’s related organizations required to be listed in revenue and expenses that it regularly uses to keep its books

Schedule R. and records. To be acceptable for Form 990 reporting

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purposes, however, the method of accounting must clearly • Federal Express (FedEx): FedEx Priority Overnight, FedEx

reflect income. Standard Overnight, FedEx 2Day, FedEx International Priority,

FedEx International First. Accounting method change. Generally, the organization • United Parcel Service (UPS): UPS Next Day Air, UPS Next must file Form 3115 to change its accounting method. An Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air AM, UPS exception applies where a section 501(c) organization changes Worldwide Express Plus, and UPS Worldwide Express. its accounting method to comply with SFAS 116, Accounting for

Contributions Received and Contributions Made. See Notice The private delivery service can tell you how to get written

96-30, 1996-1 C.B. 378. An organization that makes a change proof of the mailing date.

in accounting method, regardless of whether it files Form 3115, Electronic filing. The organization can file Form 990 and

and that has audited financial statements, must report any related forms, schedules, and attachments electronically.

adjustment required by section 481(a) on Schedule D, However, if an organization files at least 250 returns of any type

Supplemental Financial Statements (Form 990), Parts XI during the calendar year and has total assets of $10 million or

through XIV. more at the end of the tax year, it must file Form 990

electronically. “Returns” for this purpose include information State reporting. Most states that accept Form 990 in place of returns (for example, Forms W-2 and Forms 1099), income tax their own forms require that all amounts be reported based on returns, employment tax returns (including quarterly Forms the accrual method of accounting. If the organization prepares 941), and excise tax returns. Form 990 for state reporting purposes, it may file an identical

return with the IRS even though the return does not agree with If an organization is required to file a return electronically but

the books of account, unless the way one or more items are does not, the organization is considered not to have filed its

reported on the state return conflicts with the instructions for return, even if a paper return is submitted. See Regulations

preparing Form 990 for filing with the IRS. section 301.6033-4 for more information.

Example 1. The organization maintains its books on the For additional information on the electronic filing

cash receipts and disbursements method of accounting but requirement, visit www.irs.gov/efile.

prepares a Form 990 return for the state based on the accrual The IRS may waive the requirements to file electronically in method. It could use that return for reporting to the IRS. cases of undue hardship. For information on filing a waiver, see

Example 2. A state reporting requirement requires the Notice 2005-88, 2005-48 I.R.B. 1060.

organization to report certain revenue, expense, or balance

sheet items differently from the way it normally accounts for F. Extension of Time To File

them on its books. A Form 990 prepared for that state is Use Form 8868 to request an automatic 3-month extension of acceptable for the IRS reporting purposes if the state reporting time to file. Use Form 8868 also to apply for an additional (not requirement does not conflict with the instructions for Form 990. automatic) 3-month extension if the original 3 months was not

enough time. To obtain this additional extension of time to file, An organization should keep a reconciliation of any the organization must show reasonable cause for the additional differences between its books of account and the Form 990 that time requested. See the Instructions for Form 8868. is filed. Organizations with audited financial statements are

required to provide such reconciliations on Schedule D (Form

990), Parts XI through XIII. G. Amended Return/Final Return

To change the organization’s return for any year, file a new

E. When, Where, and How to File return including any required schedules. Use the version of

Form 990 applicable to the year being amended. The amended File Form 990 by the 15th day of the 5th month after the return must provide all the information called for by the form organization’s accounting period ends (May 15th for a and instructions, not just the new or corrected information. calendar-year filer). If the regular due date falls on a Saturday, Check the “Amended return” box in item B of the Entity section Sunday, or legal holiday, file on the next business day. A of the return. Also, state in Schedule O (Form 990) which parts business day is any day that is not a Saturday, Sunday, or legal and schedules of the Form 990 were amended and describe holiday. the amendments.

If the organization is liquidated, dissolved, or terminated, file The organization may file an amended return at any time to the return by the 15th day of the 5th month after liquidation, change or add to the information reported on a previously filed dissolution, or termination. return for the same period. It must make the amended return

If the return is not filed by the due date (including any available for inspection for 3 years from the date of filing or 3

extension granted), explain in Schedule O (Form 990), giving years from the date the original return was due, whichever is

later. the reasons for not filing on time.

Send the return to: Use Form 4506, Request for Copy of Tax Return, to obtain a

copy of the filing organization’s previously filed return. See Department of the Treasury www.irs.gov for information on getting blank tax forms. Internal Revenue Service Center If the return is a final return, see the instructions for Ogden, UT 84201-0027 Schedule N (Form 990 or 990-EZ), for further details.

If the organization’s principal business, office, or agency is Amended returns and state filing considerations. State law located in a foreign country or U.S. possession, send the may require that the organization send a copy of an amended return to: Form 990 return (or information provided to the IRS

Department of the Treasury supplementing the return) to the state with which it filed a copy

Internal Revenue Service Center of Form 990 originally to meet that state’s reporting

P.O. Box 409101 requirement. A state may require an organization to file an

Ogden, UT 84409 amended Form 990 to satisfy state reporting requirements,

even if the original return was accepted by the IRS. Private delivery services. The organization can use certain

private delivery services designated by the IRS to meet the H. Failure To File Penalties “timely mailing as timely filing/paying” rule for tax return

payments. These private delivery services include only the Against the organization. Under section 6652(c)(1)(A), a

following: penalty of $20 a day, not to exceed the smaller of $10,000 or

• DHL Express (DHL): DHL “Same Day” Service, DHL Next 5% of the gross receipts of the organization for the year, may

Day 10:30 AM, DHL Next Day 12:00 PM, DHL Next Day 3:00 be charged when a return is filed late, unless the organization

PM, and DHL 2nd Day Service. can show that the late filing was due to reasonable cause.

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Organizations with annual gross receipts exceeding $1 million Department of the Treasury

are subject to a penalty of $100 for each day failure continues Internal Revenue Service Center

(with a maximum penalty with respect to any one return of Ogden, UT 84201-0027

$50,000). The penalty begins on the due date for filing the Form For special instructions regarding answering certain Form 990. 990 questions about parts or schedules in the context of a

Tax exempt organizations that are required to file group return, see Appendix E.

electronically but do not are deemed to have failed to file the

return. This is true even if a paper return is submitted. J. Requirements for a Properly

The penalty may also be charged if the organization files an Completed Form 990 incomplete return, such as by failing to complete a required line All organizations must complete Parts I through XI of the Form item or a required part of a schedule. To avoid penalties and 990, Schedule O, and any schedules for which a “Yes” having to supply missing information later: response is indicated in Part IV. If an organization is not • Complete all applicable line items, required to file Form 990 but chooses to do so, it must file a • Unless instructed to skip a line, answer each question on the complete return and provide all of the information requested, return, including the required schedules. • Make an entry (including a zero when appropriate) on all Public inspection. In general, all information the organization lines requiring an amount or other information to be reported, reports on or with its Form 990, including schedules and and attachments, will be available for public inspection. Note, • Provide required explanations as instructed. however, the special rules for Schedule B (Form 990, 990-EZ, Also, this penalty may be imposed if the organization’s return or 990-PF), a required schedule for certain organizations that contains incorrect information. For example, an organization file Form 990. Make sure the forms and schedules are clear

that reports contributions net of related fundraising expenses enough to photocopy legibly. For more information on public may be subject to this penalty. inspection requirements, see Appendix D, Public Inspection of

Returns, and Pub. 557, Tax-Exempt Status for Your Use of a paid preparer does not relieve the organization of Organization. its responsibility to file a complete return.

Signature. A Form 990 is not complete without a proper Against Responsible Person(s). If the organization does not signature. For details, see the instructions to Part II, Signature file a complete return or does not furnish correct information, Block. the IRS will send the organization a letter that includes a fixed

time to fulfill these requirements. After that period expires, the Recordkeeping. The organization’s records should be kept for

person failing to comply will be charged a penalty of $10 a day. as long as they may be needed for the administration of any

The maximum penalty on all persons for failures with respect to provision of the Internal Revenue Code. Usually, records that

any one return shall not exceed $5,000. support an item of income, deduction, or credit must be kept for

a minimum of 3 years from the date the return is due or filed, There are also penalties (fines and imprisonment) for willfully whichever is later. Keep records that verify the organization’s not filing returns and for filing fraudulent returns and statements basis in property for as long as they are needed to figure the with the IRS (see sections 7203, 7206, and 7207). States may basis of the original or replacement property. Applicable law impose additional penalties for failure to meet their separate and an organization’s policies may require that the organization filing requirements. retain records longer than 3 years. Form 990, Part VI, line 14,

asks whether the organization has a document retention and I. Group Return destruction policy.

A central, parent, or like organization can file a group return on The organization should also keep copies of any returns it Form 990 for two or more subordinate or local organizations has filed. They help in preparing future returns and in making that are: computations when filing an amended return. • Affiliated with the central organization at the time its annual Rounding off to whole dollars. The organization must round accounting period ends, off cents to whole dollars on the returns and schedules, unless • Subject to the central organization’s general supervision or otherwise noted for particular questions. To round, drop control, amounts under 50 cents and increase amounts from 50 to 99 • Exempt from tax under a group exemption letter that is still cents to the next dollar. For example, $1.49 becomes $1 and in effect, and $2.50 becomes $3. If the organization has to add two or more • Using the same accounting period as the central amounts to figure the amount to enter on a line, include cents organization. when adding the amounts and round off only the total.

The central organization cannot use a Form 990-EZ for the Completing all lines. Make an entry (including a zero when group return. appropriate) on all lines requiring an amount or other

A subordinate organization covered by a group information to be reported. Do not leave any applicable lines

exemption ruling may file a separate return instead of being blank, unless expressly instructed to skip that line. If answering

included in the group return. If a subordinate organization is a line is predicated on a “Yes” answer to the preceding line, and

not required to file a return, it need not be included in the group if the organization’s answer to the preceding line was “No,” then

leave the “If Yes” line blank. return or file a separate return.

All filers must file Schedule O (Form 990). Certain questions If the central organization is required to file a return for

itself, it must file a separate return and may not be included in require all filers to provide an explanation in Schedule O (Form

990). In general, answers may be explained or supplemented in the group return. See B. Organizations Not Required To File Schedule O (Form 990) if the allotted space in the form or other Form 990 for a list of organizations not required to file. schedule is insufficient, or if a “Yes” or “No” answer is required Every year, each subordinate organization must authorize but the organization wishes to explain its answer. the central organization in writing to include it in the group Reporting proper amounts. Some lines request information return and must declare, under penalties of perjury, that the reported on other forms filed by the organization (such as Form authorization and the information it submits to be included in the W-2 or Form 990-T). If the organization is aware that the group return are true and complete. amount actually reported on the other form is incorrect, it must

The central organization should send the annual information report on Form 990 the information that should have been

update required to maintain a group exemption ruling (a reported on the other form (in addition to filing an amended

separate requirement from the annual return) to: form with the proper amount).

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Inclusion of activities and items of disregarded entities and Termination. Check this box if the organization has

joint ventures. An organization must report in its Form 990 all terminated its existence or ceased to be a section 501(a) or

of the revenues, expenses, assets, liabilities, and net assets or section 527 organization and is filing its final return as an

funds of a disregarded entity of which it is the sole member, exempt organization or section 4947(a)(1) trust. For example,

and must report in its Form 990 its share of all such items of a an organization should check this box when it has ceased

joint venture or other investment or arrangement treated as a operations and dissolved or has had its exemption revoked by

partnership for federal income tax purposes. This includes the IRS. An organization that checks this box must also attach

passive investments. In addition, the organization generally Schedule N (Form 990 or 990-EZ).

must report activities of a disregarded entity or a joint venture Amended Return. Check this box if the organization in the appropriate parts of schedules of Form 990. For special previously filed a return with the IRS for the same tax year and instructions regarding the treatment of disregarded entities and is now filing another return for the same tax year to amend the joint ventures for various parts of the form, see Appendix F, previously filed return. State in Schedule O (Form 990) which Disregarded Entities and Joint Ventures-Inclusion of Activities parts and schedules of the Form 990 were amended and and Items. describe the amendments. See G. Amended Return/Final

Assembling Form 990, schedules, and Return, for more information.

Application pending. Check this box if the organization has attachments. not yet filed either a Form 1023 or Form 1024 with the IRS, or Before filing Form 990, assemble the package of forms, has filed one and is awaiting a response. If this box is checked, schedules, and attachments in the following order. the organization must complete all parts of Form 990 and any 1. Core form with Parts I through XI completed, filed in required schedules. numerical order. Item C. Name and address. Enter the organization’s legal 2. Schedules, completed as applicable, filed in alphabetical name on the “Name of organization” line. If the organization order (see Form 990, Part IV for required schedules). operates under a name different from its legal name, enter the 3. Attachments, completed as applicable (including name alternate name on the “Doing Business As” (DBA) line. If change amendment to organizing document required by item B multiple DBA names will not fit on the line, list one on the line in the Entity section; list of subordinate organizations and list the others on Schedule O (Form 990). included in group return required for the instructions to item H If the organization receives its mail in care of a third party in the Entity section; request letter and determination letter (such as an accountant or an attorney), enter on the street regarding termination of exempt status required for Schedule N address line “C/O” followed by the third party’s name and street (Form 990 or 990-EZ); and articles of merger or dissolution, address or P.O. box. resolutions, and plans of liquidation or merger required for

Schedule N (Form 990 or 990-EZ). Include the suite, room, or other unit number after the street

address. If the Post Office does not deliver mail to the street Do not attach materials not authorized in the instructions. address and the organization has a P.O. box, show the box

number instead of the street address.

For foreign addresses, enter the information in the following Specific Instructions order: City, province or state, and the name of the country.

Follow the country’s practice in placing the postal code in the

address. Do not abbreviate the country name.

Entity Section. Items A–M If a change in address occurs after the return is filed, use

Form 8822, Change of Address, to notify the IRS of the new

address. Complete items A through M. Item D. Employer identification number (EIN). Use the EIN

provided to the organization for filing its Form 990 and federal Item A. tax returns. The organization must have only one EIN. If it has

Accounting period. File the 2008 return for calendar year more than one and has not been advised which to use, notify

2008 and fiscal years that began in 2008 and ended in 2009. the:

For a fiscal year return, fill in the tax year space at the top of Department of the Treasury page 1. See D. Accounting Periods and Methods for additional Internal Revenue Service Center information about accounting periods. Ogden, UT 84201-0027

State the numbers the organization has, the name and Item B. address to which each EIN was assigned, and the address of

 Address change, name change, and initial return. Check the organization’s principal office. The IRS will advise the the appropriate box if the organization changed its address or organization which number to use. legal name (not its “doing business as” name) since it filed its A subordinate organization in a group exemption previous return, or if this is the first time the organization is filing that is filing an individual Form 990 return must use its either a Form 990 or Form 990-EZ. own EIN, not that of the central organization or of the

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If the organization changed its name, attach the following group return. documents.

A section 501(c)(9) voluntary employees’ beneficiary

IF the organization is . . . THEN attach . . . association must use its own EIN and not the EIN of its

sponsor.

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A corporation Amendments to the articles of

incorporation with proof of filing Item E. Telephone number. Enter a telephone number of the

with the state of incorporation. organization that members of the public and government

personnel may use during normal business hours to obtain A trust Amendments to the trust information about the organization’s finances and activities. If agreement signed by the trustee. the organization does not have a telephone number, enter the

telephone number of an organization official who can provide An unincorporated association Amendments to the articles of such information. association, constitution, bylaws,

or other organizing documents, Item F. Name and address of principal officer. The address

with the signatures of at least two provided must be a complete mailing address to enable the IRS

officers/members. to communicate with the officer if necessary. If the officer

prefers to be contacted at the organization’s address listed in

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item C, state “same as C above.” For purposes of this item, Line 6. Provide the number of volunteers, full-time and

“principal officer” means a person who, regardless of title, has part-time, who provided volunteer services to the organization

ultimate responsibility for implementing the decisions of the during the reporting year. Organizations that do not keep track

organization’s governing body, or for supervising the of this information in their books and records or report this

management, administration, or operation of the organization. information elsewhere (such as in annual reports or grant

proposals) may provide a reasonable estimate, and may use Item G. Gross receipts. On Form 990, Part VIII, Column A, any reasonable basis for determining this estimate. add line 6b (both columns (i) and (ii)), line 7b (both columns (i) Organizations may, but are not required to, provide an and (ii)), line 8b, line 9b, line 10b, and line 12, and enter the explanation on Schedule O (Form 990) of how this number was total here. See the exceptions from filing Form 990 based on

gross receipts determined, and the types of services or benefits provided by and total assets as described in A. Who Must

File the organization’s volunteers. ; B. Organizations Not Required To File Form 990;

Appendix B. How To Determine Whether an Organization’s Line 7b. If the organization is not required to file a Form 990-T Gross Receipts Are Normally $25,000 (or $5,000) or Less; and for the tax year, enter “0”. If the organization has not yet filed Appendix C. Special Gross Receipts Test For Determining Form 990-T for the tax year, provide an estimate of the amount Exempt Status of Section 501(c)(7) and 501(c)(15) it expects to report on Form 990-T, line 34, when it is filed. Organizations. Lines 8–19. If this is an initial return, or if the organization Item H. Group returns. If the organization answers “Yes” to filed Form 990-EZ or Form 990-PF in the prior year, leave the line H(a) but “No” to line H(b), attach a list (not on Schedule O “Prior Year” column blank. Use the following lines from the 2007 (Form 990)) showing the name, address, and EIN of each Form 990 to determine what to report for prior year revenue and affiliated organization included in the group return. A central or expense amounts. subordinate organization filing an individual return should not

attach such a list. Enter on line H(c) the four-digit group Prior Year Revenue and Expense Amounts exemption number (GEN) if the organization is filing a group

return, or if the organization is a central or subordinate To report the Prior Year Amount Use 2007 Form 990 amount from organization in a group exemption and is filing a separate on ...................... return. Do not confuse the four-digit GEN number with the

nine-digit EIN number reported on item D of the form’s Entity Line 8, Contributions and grants Part I, line 1e

section. A central organization filing a group return must not Line 9, Program service revenue Part I, lines 2 and 3 report its own EIN in item D, but report the special EIN issued

for use with the group return. Line 10, Investment income Part I, lines 4, 5, 7 (less any

royalties reported on line 7) and 8d If attaching a list:

• Show the form number (“Form 990”) and tax year, Line 11, Other revenue Part I, lines 6c, 9c, 10c, and 11 • Show the group exemption name and EIN, (plus any royalties reported in line • Enter the four-digit group exemption number (GEN), and 7)

• Use the same size paper as the form. Line 12, Total revenue Part I, line 12 Item I. Tax-exempt status. Check the applicable box. If the

organization is exempt under section 501(c), check the first box Line 13, Grants and similar Part II, lines 22a–23, column (A)

and insert the appropriate subsection number within the amounts paid

parentheses (for example, “3” for a 501(c)(3) organization). Line 14, Benefits paid to or for Part II, line 24, column (A) Item J. Website. Enter the organization’s website address. If members

the organization does not maintain a website, enter “N/A” (not

applicable). Line 15, Salaries, other Part II, lines 25a–28, column (A)

compensation, employee benefits Item K. Type of organization. Check the box describing the

organization’s legal entity form or status under state law in its Line 16, Professional fundraising Part II, line 30, column (A)

state of legal domicile. These include corporations, trusts, expenses

unincorporated associations, and other entities (for example, Line 17, Other expenses Part II, lines 29 and 31–43g, partnerships and limited liability companies). column (A) Item L. Year of formation. State the year in which the

organization was legally created under state or foreign law. If a Line 18, Total expenses Part II, line 44, column (A)

corporation, enter the year of incorporation. Line 19, Revenue less expenses Part I, line 18

Item M. State of legal domicile. For a corporation, enter the

state of incorporation (country of incorporation for a foreign

corporation formed outside the United States). For a trust or Part II. Signature Block

other entity, enter the state whose law governs the To make the return complete, an officer of the organization organization’s internal affairs (or the foreign country whose law authorized to sign it must sign in the space provided. For a governs for a foreign organization other than a corporation). corporation or association, this officer may be the president,

vice president, treasurer, assistant treasurer, chief accounting Part I. Summary officer, or other corporate or association officer, such as a tax

officer. A receiver, trustee, or assignee must sign any return he Because Part I generally reports information reported or she files for a corporation or association. For a trust, the elsewhere on the form, completion of Part I should be authorized trustee(s) must sign. deferred until after the other parts of the form are

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completed. See C. Sequencing Chart To Complete the Form, Paid Preparer

earlier. Generally, anyone who is paid to prepare the return must sign

Complete lines 3–5 and 7–22 by using applicable the return and fill in the other blanks in the Paid Preparer’s Use

references made in Part I to other items. Only area. An employee of the filing organization is not a paid

preparer. Line 1. Describe the organization’s mission or its most

significant activities for the year, whichever the organization The paid preparer must: wishes to highlight, on the summary page. • Sign the return in the space provided for the preparer’s

Line 2. Check this box if the organization answered “Yes,” to signature,

Part IV, lines 31 or 32, and complete Schedule N, (Form 990), • Enter the preparer information, and

Part I or Part II. • Give a copy of the return to the organization.

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ceased conducting significant program services that had been

The paid preparer must enter the preparer’s identifying number conducted in a prior year. Describe these items on Schedule O

and the firm’s EIN only if filing Form 990 for a section (Form 990).

4947(a)(1) nonexempt charitable trust that is not filing Form Lines 4a–4c. All organizations must describe their 1041, U.S. Income Tax Return for Estates and Trusts. The achievements for each of their three largest program services, preparer’s identifying number is the preparer’s taxpayer as measured by total expenses incurred. If there were three or identification number (PTIN), if obtained, or the preparer’s fewer of such activities, describe each program service activity. social security number (SSN). The organization may report on Schedule O (Form 990)

The IRS is not authorized to redact the paid preparer’s additional activities that it considers of comparable or greater

SSN if such SSN is entered on the paid preparer’s importance, although smaller in terms of expenses incurred

CAUTION block. Because Form 990 is a publicly disclosable (such as activities conducted with volunteer labor). !

document, any information entered on this block will be publicly Code. For the 2008 tax year, leave this blank. disclosed (see Appendix D). Accordingly, any paid preparer Expenses and grants. For each program service reported, whose identifying number must be listed on Form 990 may wish section 501(c)(3) and section 501(c)(4) organizations and to apply for and obtain a PTIN using Form W-7P, Application for section 4947(a)(1) trusts must enter total expenses included in Preparer Tax Identification Number. Part IX, line 25, column (B), and total grants and allocations (if Paid Preparer Authorization any) included within such total expenses that were reported in

On the last line of Part II, check “Yes” if the IRS may contact the Part IX, on lines 1–3, column (B). For all other organizations,

paid preparer who signed the return to discuss the return. This entering these amounts is optional.

authorization applies only to the individual whose signature Revenue. For each program service activity, section appears in the Paid Preparer’s Use Only section of Form 990. It 501(c)(3) and 501(c)(4) organizations must report any revenue does not apply to the firm, if any, shown in that section. derived directly from the activity, such as fees for services or

By checking “Yes,” to this box, the organization is from the sale of goods that directly relate to the listed activity.

authorizing the IRS to contact the paid preparer to answer any This revenue includes program service revenue reported in Part

questions that may arise during the processing of the return. VIII, line 2, column (A), and includes other amounts reported on

The organization is also authorizing the paid preparer to: lines 3–11, as related or exempt function revenue. Also include

• Give the IRS any information missing from the return, unrelated business income from a business that exploits an

• Call the IRS for information about processing the return, and exempt function, such as advertising in a journal. For this

• Respond to certain IRS notices about math errors, offsets, purpose, charitable contributions and grants (including the

and return preparation. charitable contribution portion, if any, of membership dues)

reported in Part VIII, line 1, are not considered revenue derived The organization is not authorizing the paid preparer to bind from program services. the organization to anything or otherwise represent the

organization before the IRS. Description of program services. For the program

The authorization will automatically end no later than the due services reported:

date (excluding extensions) for filing of the organization’s 2009 • Describe program service accomplishments through specific

Form 990. If the organization wants to expand the paid measurements such as clients served, days of care provided,

preparer’s authorization or revoke it before it ends, see Pub. number of sessions or events held, or publications issued;

947, Practice Before the IRS and Power of Attorney. • Describe the activity’s objective, for both this time period and

the longer-term goal, if the output is intangible, such as in a Check “No” if the IRS is to contact the organization or its research activity; principal officer listed in item F of the Entity section rather than • Give reasonable estimates for any statistical information if the paid preparer. exact figures are not readily available. Indicate that this

information is estimated; and Part III. Statement of Program Service • Be clear, concise, and complete in the description. Use

Accomplishments Schedule O (Form 990) if additional space is needed.

Part III requires reporting regarding the organization’s program Donated services. The organization may report the

services and exempt purpose achievements. A program service amount of any donated services, or use of materials,

is an activity of an organization that accomplishes its exempt equipment, or facilities it received or used in connection with a

purpose. Examples of exempt purpose achievements may specific program service, on the lines for the narrative

include providing charity care under a hospital’s charity care description of the appropriate program service. However, do not

policy, providing higher education to students under a college’s include these amounts in revenue, expenses, or grants reported

degree program, making grants or providing assistance to on lines 4a–4e, even if prepared in accordance with generally

individuals who were victims of a natural disaster, and providing accepted accounting principles.

rehabilitation services to residents of a long-term care facility. Public interest law firm. A public interest law firm exempt Do not report a fundraising activity as an exempt purpose under section 501(c)(3) or section 501(c)(4) must include a list achievement unless it is substantially related to the of all the cases in litigation or that have been litigated during the accomplishment of the organization’s exempt purposes (other year. For each case: than by raising funds). • Describe the matter in dispute,

Line 1. Describe the organization’s mission as articulated in its • Explain how the litigation will benefit the public generally, and

mission statement or as otherwise adopted by the • State the fees sought and recovered.

organization’s governing body, if applicable. If the organization See Rev. Proc. 92-59, 1992-2 C.B. 411.

does not have a mission that has been adopted by its Other program services. List on Schedule O (Form 990) governing body, state “None.” the organization’s other program services. The detailed Line 2. Answer “Yes” if the organization undertook any new information required for the three largest program services need significant program service activities during the tax year not not be provided for these other program services. Section described in the prior year’s Form 990 or Form 990-EZ. 501(c)(3) and section 501(c)(4) organizations, and section Describe these items in Schedule O (Form 990). If any are 4947(a)(1) trusts, must report on line 4d their total revenues among the activities described on Form 990, Part III, line 4, the reported in Part VIII, line 2, column (A) and their total expenses organization may reference the detailed description on line 4. (including grants) reported in Part IX, column (B) that are

Line 3. Answer “Yes” if the organization made any significant attributable to these other program services, and must report on

changes during the year in how it conducts its program service line 4e their total program service expenses from lines 4a-4d.

activities to further its exempt purposes, or if the organization The line 4e amount must equal the amount reported on Form

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990, Part IX, line 25, column (B). For all other organizations, Line 8. Answer “Yes,” if at any time during the year the

entering these amounts is optional. organization maintained collections of works of art, historical

treasures, or other similar assets as described within SFAS

Part IV. Checklist of Required Schedules 116, regardless of whether the organization reported revenue

and assets related to such collections in its financial For each “Yes” answer to a question on Form 990, Part IV, statements. Organizations that answer “Yes” to this question complete the applicable schedule (or part or line of the often will answer “Yes” to Part IV, line 30, which addresses schedule). See the Glossary and instructions for the pertinent current-year contributions of such items. schedules for definitions of terms and explanations that are

relevant to questions in this part. Line 9. Answer “Yes,” if at any time during the organization’s

tax year the organization (1) had an escrow or custodial The organization is not required to answer “Yes” to a account or (2) provided credit counseling services and/or question on Form 990, Part IV, or complete the schedule (or debt management plan services, such as credit repair or debt part of a schedule) to which the question is directed if the negotiations. organization is not required to provide any information in the Line 10. Answer “Yes,” if the organization, a related schedule (or part of the schedule). Thus, a minimum dollar organization, or an organization formed and maintained threshold for reporting information on a schedule may be exclusively to further one or more exempt purposes of the relevant in determining whether the organization must answer organization (such as a foundation formed and maintained “Yes” to a question on Form 990, Part IV. exclusively to hold endowment funds to provide scholarships Line 1. Answer “Yes” if the organization is a section 501(c)(3) and other funds for a college or university described within or a section 4947(a)(1) organization that is not a private section 501(c)(3)), held assets in term endowment, foundation. Answer “Yes” if the organization claims section permanent endowment, or quasi endowment funds at any 501(c)(3) status but has not yet filed a Form 1023 application or time during the year, regardless of whether the organization received a determination letter recognizing its section 501(c)(3) follows SFAS 117 or reports endowments in Part X, line 32. status. All other organizations answer “No.” See the instructions for Schedule D, (Form 990), Part V, for the

Line 2. Answer “Yes” if any of the following are satisfied. definitions of these types of endowments.

• A section 501(c)(3) organization met the 331/3% support test Line 11. Answer “Yes,” if the organization reported an amount of the regulations under sections 509(a)(1)/170(b)(1)(A)(vi) (in for land, buildings, and equipment or other liabilities in Part X, such case, the organization must check “Yes” on Schedule A lines 10 and 25. Also, answer “Yes” if the organization reported (Form 990 or 990-EZ), Part II, line 16a or 16b), and received in Part X an amount for investments-other securities, from any one contributor, during the year, contributions of the investments-program related, or other assets, in any of lines greater of $5,000 (in money or property) or 2% of the amount 12,13, or 15, that is 5% or more of the total assets reported on on Form 990, Part VIII, line 1h. Part X, line 16. • A section 501(c)(3) organization did not meet the 331

/3% Line 12. Answer “Yes,” if the organization received an audited support test of the regulations under sections 509(a)(1)/ financial statement prepared in accordance with generally 170(b)(1)(A)(vi), and received during the year contributions of accepted accounting principles for the year for which it is $5,000 or more from any one contributor. completing this return. All other organizations answer “No.” Do • A section 501(c)(7), 501(c)(8), or 501(c)(10) organization not answer “Yes,” if the organization was included in a received, during the year, contributions of any amount for use consolidated audited financial statement unless the exclusively for religious, charitable, scientific, literary, or organization also received a separate audited financial educational purposes, or the prevention of cruelty to children or statement. animals, or contributions of $5,000 or more not exclusively for An accountant’s compilation or review of financial such purposes from any one contributor.

• Any other organization that received, during the year, statements is not considered to be an audit and does not

contributions of $5,000 or more from any one contributor. produce an audited financial statement. If the organization

answers “No,” but has prepared, for the year for which it is Line 3. All organizations must answer this question, even if completing this return, a financial statement that was not they are not subject to a prohibition against political campaign audited, the organization may (but is not required to) provide activities. Answer “Yes,” whether the activity was conducted the reconciliations contained on Schedule D, (Form 990), Parts directly or indirectly through a disregarded entity or a joint XI–XIII. venture or other arrangement treated as a partnership for Line 13. Answer “Yes,” if the organization checked the box on federal income tax purposes and in which the organization is an Schedule A, (Form 990 or 990-EZ), Part I, line 2, indicating that owner. it is a school. Line 4. Complete only if the organization is a section 501(c)(3) Lines 14–16. Answer “Yes,” to line 14a if the organization organization. Other organizations leave this line blank. maintained an office, or had employees or agents, outside the Line 5. Complete only if a section 501(c)(4), 501(c)(5), or United States. Answer “Yes,” to line 14b if the organization had 501(c)(6) organization that receives membership dues, aggregate revenue or expenses of more than $10,000 from or assessments, or similar amounts as defined in Rev. Proc. attributable to grantmaking, fundraising, business, and program 98–19, 1998-1 C.B. 547. Other organizations leave this line service activities outside the United States. An organization blank. that answers “Yes,” to line 14a should only complete Schedule

Line 6. Answer “Yes,” if the organization maintained at any F (Form 990) if it satisfies one or more of the dollar thresholds

time during the organization’s tax year a donor advised fund described on line 14b, 15, or 16 and answers “Yes” to any of

or another similar fund or account (that is, any account over those questions.

which the donor or a person appointed by the donor had Lines 17–19. Answer “Yes,” to line 18 if the sum of the

advisory privileges with respect to the use or investment of any amounts reported on lines 1c and 8a of Form 990, Part VIII,

portion of the account, but which does not constitute a donor exceeds $15,000. An organization that answers “No,” should advised fund). Examples of other similar funds or accounts consider whether to complete Schedule G (Form 990 or

include, but are not limited to, the types of funds or accounts 990-EZ) in order to report its fundraising activities or gaming

described as exceptions to the Glossary definition of a donor activities for state or other reporting purposes. advised fund. Line 20. Answer “Yes,” if the organization, directly or indirectly

Line 7. Answer “Yes,” if the organization received or held any through a disregarded entity or joint venture treated as a

conservation easement at any time during the year, partnership for federal income tax purposes, operated any

regardless of how the organization acquired the easement or facility that at any time during the year was, or was required to

whether a charitable deduction was claimed by a donor of the be, licensed, registered, or similarly recognized by a state as a

easement. hospital. Except in the case of a group return, do not include

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facilities operated by another organization that is treated as a An excess benefit transaction may have serious

separate taxable or tax-exempt corporation for federal income implications for the disqualified person that entered

tax purposes. For group returns, answer “Yes” if any affiliate into the transaction with the organization, any

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included within the group return operated such a facility. organization managers that knowingly approved of the

transaction, and the organization itself. A section 501(c)(3) or Lines 21–22. Answer “Yes,” if the organization reported more section 501(c)(4) organization that becomes aware that it may than $5,000 on Part IX, line 1, or more than $5,000 on Part IX, have engaged in an excess benefit transaction should obtain line 2. competent advice regarding section 4958, consider pursuing

correction of any excess benefit, and take other appropriate Organizations that answer “No,” to lines 21 and 22 steps to protect its interests with regard to such transaction and should consider whether to complete Schedule I (Form the potential impact it could have on the organization’s 990) in order to report the provision of grants and other

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continued exempt status. See Appendix G, Section 4958 assistance in the United States for state or other reporting Excess Benefit Transactions, for a discussion of section 4958, purposes. and Schedule L (Form 990), Part I, regarding reporting of

Line 23. Answer “Yes,” if the organization listed in Part VII a excess benefit transactions. • former officer, director, trustee, key employee, or highest Lines 26-28. Lines 26 through 28 ask questions about loans compensated employee; from the organization to certain interested persons (or • or reported for any person listed in Part VII more than vice-versa), grants and other financial assistance provided by $150,000 of reportable compensation and other the organization to certain interested persons, and certain direct compensation. and indirect business transactions involving current or former Also answer “Yes,” if, under the circumstances described in the governance and management officials of the organization or instructions to Part VII, Section A, line 5, the filing organization their associated businesses or family members. All had knowledge that any person listed in Part VII, Section A, organizations must answer these questions. The organization received or accrued compensation from an unrelated should review carefully the instructions to Schedule L, (Form organization for services rendered to the filing organization. 990), Parts II–IV, before answering these questions and

Line 24. Lines 24a–24d involve questions regarding completing Schedule L (Form 990).

tax-exempt bonds. All organizations must answer “Yes,” or Line 29. The organization is required to answer “Yes” to the “No,” on line 24a. Those organizations that answer “Yes,” on question in line 29 if it received during the year more than line 24a must also answer lines 24b through 24d and complete $25,000 in value of donations, gifts, grants or other Schedule K (Form 990) . Those that answer “No,” to line 24a contributions of property other than cash, regardless of the may skip to line 25. manner received (such as for use in a charity auction). Do not

include contributions of services or use of facilities. Line 24a. Answer “Yes,” and complete Schedule K (Form

990) for each tax-exempt bond issued after December 31, Line 30. The organization is required to answer “Yes” to the

2002 (including refunding bonds) with an outstanding principal question in line 30 if during the year it received as a donation,

amount of more than $100,000 as of the last day of the gift, grant or other contribution:

organization’s tax year. • any work of art, historical treasure, historical artifact,

scientific specimen, archeological artifact, or similar asset, Line 24b. For purposes of line 24b, the organization need including a fractional interest, regardless of amount or whether not include the following as investments of proceeds. the organization maintains collections of such items; or • Any investment of proceeds relating to a reasonably • any conservation easements regardless of whether the required reserve or replacement fund as described in section contributor claimed a charitable contribution deduction for such 148(d). contribution. • Any investment of proceeds properly characterized as See the Instructions for Schedule M (Form 990) for definitions replacement proceeds as defined in section 1.148-1(c). of these terms. • Any investment of net proceeds relating to a refunding Lines 31–32. The organization must answer “Yes” if it escrow as defined in section 1.148-1(b). liquidated, terminated, dissolved, ceased operations, or

engaged in a significant disposition of net assets during the Temporary period exceptions are described in sections 148(c) year. See the Instructions to Schedule N (Form 990 or 990-EZ) and 1.148-2(e). For example, there is a 3-year temporary period for definitions and explanations of these terms and transactions applicable to proceeds spent on expenditures for capital or events. Organizations that answer “Yes” to either of these projects and a 13-month temporary period applicable to questions must also check the box in Part I, line 2 and complete proceeds spent on working capital expenditures. Schedule N, (Form 990 or 990-EZ), Part I or Part II. Line 24c. For purposes of line 24c, the organization is Lines 33–35. The organization is required to report on treated as maintaining an escrow account if such account is Schedule R (Form 990) certain information regarding ownership maintained by a trustee with respect to tax-exempt bonds or control of, and transactions with, its disregarded entities issued for the benefit of the organization. and tax-exempt and taxable related organizations. Any

Line 24d. Answer “Yes,” if the organization has received an organization that answers “Yes” to line 33 or 34 must list its

advance ruling that its obligations were issued on behalf of a disregarded entities and related organizations on Schedule

state or local governmental unit (see Rev. Proc. 82-26, 1982-1 R (Form 990) and provide specified information regarding such

C.B. 476); meets the conditions for issuing tax-exempt bonds organizations. Any organization that is a controlling

as set forth in Rev. Rul. 63-20, 1963-1 C.B. 24; or is a organization under section 512(b)(13) with respect to a

constituted authority organized by a state or local controlled entity must answer “Yes” to line 35 and report

governmental unit specifically to issue tax-exempt bonds in transfers to or from the controlled entity. See the Glossary

order to further public purposes (see Rev. Proc. 57-187, 1957-1 and the Instructions for Schedule R (Form 990) for definitions of

C.B. 65). Also answer “Yes,” if the organization has outstanding these terms.

qualified scholarship funding bonds under section 150(d) or Line 36. Section 501(c)(3) organizations and section bonds of a qualified volunteer fire department under section 4947(a)(1) trusts must answer “Yes” or “No” to the question on 150(e). line 36. All other organizations are to leave this line blank and

go to line 37. See the Glossary and the Instructions to Schedule Lines 25a–25b. Organizations not described in section R (Form 990) for the types of transfers required to be reported 501(c)(3) or section 501(c)(4) should skip lines 25a and 25b on Schedule R, (Form 990), Part V, line 2. and leave them blank. All section 501(c)(3) and 501(c)(4)

organizations are required to complete lines 25a and 25b by Line 37. Answer “Yes” if at any time during the year the

answering “Yes,” or “No.” organization conducted more than 5 percent of its activities,

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measured by total gross revenue or total assets of the All tax-exempt organizations must pay estimated taxes

organization, through an unrelated organization that is treated with respect to their unrelated business income if they

as a partnership for federal income tax purposes. The CAUTION expect their tax liability to be $500 or more. Use Form

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organization must answer “Yes” if either the 5 percent gross 990-W, Estimated Tax on Unrelated Business Taxable Income

revenue test or the 5 percent total assets test is satisfied. The For Tax-Exempt Organizations, to compute these amounts.

5 percent test is applied on a partnership by partnership basis, Line 4a. Answer “Yes” if either item (1) or (2) below applies. although direct ownership by the organization and indirect 1. At any time during the calendar year ending with or ownership through disregarded or tiered entities is aggregated within the organization’s tax year, the organization had an for this purpose. The organization need not report on Schedule interest in, or signature or other authority over, a financial R (Form 990) Part VI, either (1) the conduct of activities through account in a foreign country (such as a bank account, securities an organization treated as a taxable or tax-exempt corporation account, or other financial account); and for federal income tax purposes, or (2) unrelated partnerships

that meet both of the following conditions. a. The combined value of all such accounts was more than

• 95% or more of the filing organization’s gross revenue from $10,000 at any time during the calendar year; and

b. The accounts were not with a U.S. military banking facility the partnership for the partnership’s tax year ending with or

within the organization’s tax year is described in sections operated by a U.S. financial institution.

512(b)(1), 512(b)(2), 512(b)(3), and 512(b)(5), such as interest, 2. The organization owns more than 50% of the stock in any

dividends, royalties, rents, and capital gains (including corporation that would answer “Yes” to item 1 above.

unrelated debt-financed income); and If “Yes,” file Form TD F 90-22.1, Report of Foreign Bank and • The primary purpose of the filing organization’s investment in Financial Accounts, by June 30 after the end of the calendar the partnership is the production of income or appreciation of year with the Department of the Treasury at the address shown property and not the conduct of a section 501(c)(3) charitable on the form.

activity such as program-related investing. Form TD F 90-22.1 is available by calling 1-800-TAX-FORM

(1-800-829-3676) or by downloading it from the IRS website at Part V. Statements Regarding Other IRS www.irs.gov. Do not file Form TD F 90-22.1 with the IRS or

Filings and Tax Compliance attach it to Form 990.

Line 4b. Enter the name of each foreign country in which a

See Glossary for definition of terms used in the foreign account described on line 4a is located.

questions in this section. TIP Line 5. Answer “Yes” on line 5a if the organization was party

to a prohibited tax shelter transaction as described in section

4965(e) at any time during the organization’s tax year. A Some questions below pertain to other IRS forms. prohibited tax shelter transaction is any listed transaction, within Forms are available by calling 1-800-TAX-FORM the meaning of section 6707A(c)(2), and any prohibited (1-800-829-3676) or by downloading from the IRS

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reportable transaction. A prohibited reportable transaction is a Website at www.irs.gov. Most forms and publications are also confidential transaction within the meaning of Regulations available at your local IRS office. See also Appendix H, Forms section 1.6011-4(b)(3), and a transaction with contractual and Publications To File or Use. protection within the meaning of Regulations section

Line 1a. The organization must use Form 1096 to transmit 1.6011-4(b)(4).

paper Forms 1099, 1098, 5498, and W-2G to the IRS, which An organization that files Form 990 (other than a section 527 are information returns reporting certain amounts paid or political organization or a section 4947(a)(1) trust) and that is a received by the organization. If the organization transmits any party to a prohibited tax shelter transaction must file Form of these forms electronically, add this number to the total 8886-T, Disclosure by Tax-Exempt Entity Regarding Prohibited reported. Examples of payments requiring Form 1099 reporting Tax Shelter Transaction, and may also have to file Form 4720, include certain payments to independent contractors for Return of Certain Excise Taxes on Charities and Other Persons services rendered. Under Chapters 41 and 42 of the IRC, and pay an excise tax

Line 1b. Form W-2G pertains to certain gambling winnings. imposed by section 4965. For more information, see the

Line 1c. For more information on backup withholding for instructions to Forms 8886-T and 4720.

missing or incorrect names or taxpayer identification numbers, Line 6. Any fundraising solicitation by or on behalf of any

see Pub. 1281, Backup Withholding for Missing and Incorrect section 501(c) or 527 organization that is not eligible to receive

Name/TIN(s). contributions deductible as charitable contributions for federal

income tax purposes must include an explicit statement that Line 2b. If the organization reported at least one employee on contributions or gifts to it are not deductible as charitable line 2a, answer whether it filed all required federal employment contributions. The statement must be in an easily recognizable tax returns (which may include Form 940, Employer’s Federal

Unemployment (FUTA) Tax Return, and Form 941, Employer’s format whether the solicitation is made in written or printed

Quarterly Federal Tax Return) relating to such employees. For form, by television or radio, or by telephone. Organizations

more information, see the discussion of employment taxes in whose annual gross receipts are normally not more than

$100,000 may answer “No” on line 6a. Pub. 557, Tax-Exempt Status For Your Organization.

Failure to disclose that contributions are not deductible could Line 3a. Check “Yes” on line 3a if the organization’s total result in a penalty of $1,000 for each day on which a failure gross income from all of its unrelated trades or businesses is occurs. The maximum penalty for failures by any organization, $1,000 or more for the year. Gross income is the amount of during any calendar year, shall not exceed $10,000. In cases gross receipts less the cost of goods sold. See Pub. 598, Tax where the failure to make the disclosure is due to intentional on Unrelated Business Income of Exempt Organizations, for a disregard of the law, more severe penalties apply. No penalty description of unrelated business income and the Form 990-T will be imposed if the failure is due to reasonable cause. filing requirements for organizations having such income.

All organizations that qualify under section 170(c) to receive Neither Form 990-T nor Form 990 is a substitute for the contributions that are deductible as charitable contributions for

other. Report on Form 990 items of income and federal income tax purposes should answer “No” on line 6a. CAUTION expense that are also required to be reported on Form

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990-T when the organization is required to file both forms. See Pub. 1771, Charitable Contributions: Substantiation

and Disclosure Requirements. Line 3b. Answer “Yes” if the organization filed Form 990-T by TIP

the time this Form 990 is filed. Check “No” if the organization

has filed an extension but has not filed the Form 990-T. If “No,” Line 7. Line 7 is directed only to organizations that may

provide an explanation on Schedule O, (Form 990). receive deductible charitable contributions under section

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170(c). See Publication 526, Charitable Contributions, for a organization is subject to the excess business holdings tax

description of such organizations. All other organizations should under section 4943 and is required to file Form 4720.

leave lines 7a through 7h blank and go to line 8. Donor advised funds. For purposes of the excise tax on

Lines 7a and 7b. If a donor makes a payment in excess of excess business holdings under section 4943, a donor advised

$75 partly as a contribution and partly in consideration for fund is treated as a private foundation.

goods or services provided by the organization, the Supporting organizations. Only certain supporting

organization generally must notify the donor of the value of organizations are subject to the excess business holdings tax

goods and services provided. under section 4943. These include:

• Type III supporting organizations that are not functionally Example. A donor gives a charity $100 in consideration for integrated; and a concert ticket valued at $40 (a quid pro quo contribution). In • Type II supporting organizations that accept any gift or this example, $60 would be deductible. Because the donor’s contribution from a person who, by himself or in connection payment exceeds $75, the organization must furnish a with a related party, controls a supported organization of such disclosure statement even though the taxpayer’s deductible Type II supporting organization. amount does not exceed $75. Separate payments of $75 or To determine whether the organization is a supporting less made at different times of the year for separate fundraising organization and if so, what type of supporting organization it is, events will not be aggregated for purposes of the $75 threshold. see the Instructions for Schedule A, (Form 990 or 990-EZ), Part

See Pub. 1771, Charitable Contributions-Substantiation I, Line 11.

and Disclosure Requirements. Line 9. Line 9 is required to be completed by sponsoring

organizations maintaining a donor advised fund. All other

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organizations may leave this line blank and go to line 10. Lines 7c and 7d. The organization must answer “Yes” and

indicate the number of forms filed if it filed Form 8282, Donee Line 9a. Answer “Yes” if the organization made any taxable

Information Return, to report information to the IRS and to distributions under section 4966 during the organization’s tax

donors about disposition of certain donated property made year.

within three years after the donor contributed the property. Under section 4966, a taxable distribution includes a

distribution from a donor advised fund to an individual. A Lines 7e and 7f. If, in connection with a transfer of funds to taxable distribution also includes a distribution from a donor the organization, the organization directly or indirectly pays advised fund to an estate, partnership, association, company, premiums on any personal benefit contract, or there is an or corporation unless: understanding or expectation that any person will directly or • The distribution is for a charitable purpose (for example, a indirectly pay such premiums, the organization must report on purpose described in section 170(c)(2)(B)), and Form 8870, Information Return for Transfers Associated with • The organization exercises expenditure responsibility with Certain Personal Benefit Contracts, the premiums it paid, and respect to the distribution. the premiums paid by others but treated as paid by the

organization. The organization must report and pay an excise The above does not apply to distributions to any organization

tax, equal to premiums paid, on Form 4720. A personal benefit described in section 170(b)(1)(A) (other than a disqualified

contract is generally any life insurance, annuity, or endowment supporting organization, defined in section 4966(d)(4)), to the

contract that benefits, directly or indirectly, the transferor, a sponsoring organization of such donor advised fund, or to any

member of the transferor’s family, or any other person other donor advised fund.

designated by the transferor (other than an organization Line 9b. Answer “Yes” if the organization made a described in section 170(c)). distribution from a donor advised fund to a donor, donor

Line 7g. Form 8899, Notice of Income from Donated advisor, or related person during the organization’s tax year.

Intellectual Property, must be filed by certain organizations that For purposes of this question, a related person is any family

received a charitable gift of qualified intellectual property that member of the donor or donor advisor and any 35% controlled

produces net income. The organization should check “Yes” if it entity (as defined in section 4958(f)) of the donor or donor

provided all required Forms 8899 for the year for net income advisor.

produced by donated qualified intellectual property. Qualified If an organization makes a distribution from a donor intellectual property is any patent, copyright (other than certain advised fund resulting from the advice of a donor, self-created copyrights), trademark, trade name, trade secret, CAUTION donor advisor, family member, or a 35% controlled

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know-how, software (other than certain “canned” or entity of any of these persons, which distribution directly “off-the-shelf” software or self-created software), or similar or indirectly benefits one of such persons, section 4967 property, or applications or registrations of such property. imposes a tax on (1) the person upon whose advice the

Line 7h. A donor of a (1) motor vehicle for use on public distribution was made, (2) the beneficiary of the

roads, (2) a boat, or an (3) airplane cannot claim a charitable distribution, and a (3) fund manager for knowingly agreeing

contribution deduction in excess of $500 unless the donee to make the distribution. The persons liable for the section

organization provides the donor with a Form 1098-C, 4967 tax must file Form 4720 to pay the tax.

Contributions of Motor Vehicles, Boats, and Airplanes, with Line 10. Answer lines 10a and 10b only if the organization is respect to the donation (or a written acknowledgment with the exempt under section 501(c)(7). same information). See the instructions for Form 1098-C for

more information. A section 501(c)(7) organization is not exempt from

income tax if any written policy statement, including the Line 8. Line 8 is required to be answered by sponsoring governing instrument and bylaws, allows discrimination

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organizations maintaining donor advised funds and certain on the basis of race, color, or religion. section 509(a)(3) supporting organizations. Such However, section 501(i) allows social clubs to retain their organizations must answer “Yes” if the organization is the exemption under section 501(c)(7) even though their sponsoring organization of a donor advised fund that had membership is limited (in writing) to members of a particular excess business holdings at any time during the organization’s religion if the social club: tax year, or if the organization is a section 509(a)(3) supporting

organization of the type described below that had excess 1. Is an auxiliary of a fraternal beneficiary society exempt

business holdings at any time during the organization’s tax under section 501(c)(8), and

year 2. Limits its membership to the members of a particular . All other organizations should leave this line blank and go religion; or the membership limitation is: to line 9. If “Yes,” see the instructions for Schedule C (Form

4720, Return of Certain Excise Taxes Under Chapters 41 and a. A good-faith attempt to further the teachings or principles

42 of the Internal Revenue Code), to determine whether the of that religion, and

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b. Not intended to exclude individuals of a particular race or Line 12. All organizations that are not section 4947(a)(1) trusts

color. are to leave line 12 blank.

Line 10a. Enter the amount of initiation fees, capital If a section 4947(a)(1) nonexempt charitable trust has no

contributions, and unusual amounts of income included in Part taxable income under Subtitle A, its filing of Form 990 may be

VIII. Statement of Revenue, line 12, Total Revenue, but not used to meet its income tax return filing requirement under

included in the definition of gross receipts for section 501(c)(7) section 6012. Such a trust must, if it answers “Yes” on line 12a,

exemption purposes as discussed in Appendix C. However, if report its tax-exempt interest received or accrued (if reporting

the organization is a college fraternity or sorority that charges under the accrual method) during the tax year on line 12b.

membership initiation fees but not annual dues, do not include

such initiation fees. Part VI. Governance, Management, and

Line 10b. Enter the amount of gross receipts included in Disclosure

Part VIII. Statement of Revenue, line 12, Total Revenue, All organizations must complete Part VI. Use Schedule O (Form derived from the general public for use of the organization’s 990) to provide required supplemental information as described facilities, that is, from persons other than members or their below, and to provide any additional information that the spouses, dependents, or guests. organization considers relevant to this part.

Include the income shown on line 10b on the club’s Part VI requests information regarding an organization’s

Form 990-T if required to be filed. Investment income governing body and management, governance policies, and

earned by a section 501(c)(7) organization is not disclosure practices. Although federal tax law generally does

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tax-exempt income unless set aside for the following purposes: not mandate particular management structures, operational

religious, charitable, scientific, literary, educational, or policies, or administrative practices, every organization is

prevention of cruelty to children or animals. required to answer each question in Part VI. For example, all

organizations must answer line 10, which asks about the If the combined amount of an organization’s gross organization’s process, if any, it uses to review Form 990, even investment income and other unrelated business income though the governing body is not required by federal tax law to exceeds $1,000, it must report the investment income and other review Form 990. unrelated business income on Form 990-T. Even though governance, management, and disclosure Line 11. Answer lines 11a and 11b only if the organization is policies and procedures generally are not required under the exempt under section 501(c)(12). Internal Revenue Code, the IRS considers such policies and

One of the requirements that an organization must meet to procedures to generally improve tax compliance. The absence

qualify under section 501(c)(12) is that at least 85% of its gross of appropriate policies and procedures may lead to

opportunities for excess benefit transactions, inurement, income consists of amounts collected from members for the

sole purpose of meeting losses and expenses. For purposes of operation for non-exempt purposes, or other activities

section 501(c)(12), the term gross income inconsistent with exempt status. Whether a particular policy, means gross

receipts without reduction for any cost of goods sold. procedure, or practice should be adopted by an organization

may depend on the organization’s size, type, and culture. Gross income for mutual or cooperative electric companies Accordingly, it is important that each organization consider the is figured by excluding any income received or accrued from the governance policies and practices that are most appropriate for following. that organization in assuring sound operations and compliance 1. Qualified pole rentals. with tax law. For more governance information relating to 2. Any provision or sale of electric energy transmission charities, see www.irs.gov/eo and click on life cycle. services or ancillary services if the services are provided on a

nondiscriminatory open access basis under an open access Section A. Governing Body and Management

transmission tariff; approved or accepted by the Federal Energy Line 1a. The governing body is the group of persons Regulatory Commission (FERC) or under an independent authorized under state law to make governance decisions on transmission provider agreement approved or accepted by behalf of the organization and its shareholders or members, if FERC (other than income received or accrued directly or applicable. The governing body is, generally speaking, the indirectly from a member). board of directors (sometimes referred to as board of 3. The provision or sale of electric energy distribution trustees) of a corporation or association, or the board of services or ancillary services, if the services are provided on a trustees of a trust (sometimes referred to simply as the trustees, nondiscriminatory, open-access basis to distribute electric or trustee, if only one trustee). energy not owned by the mutual or electric cooperative State the number, as of the end of the organization’s tax company: year, of members of the governing body of the organization a. To end-users who are served by distribution facilities not with power to vote on all matters that may come before the owned by the company or any of its members (other than governing body (other than when a conflict of interest income received or accrued directly or indirectly from a disqualifies the member from voting). If members of the member), or governing body do not all have the same voting rights, explain b. Generated by a generation facility not owned or leased material differences on Schedule O (Form 990). by the company or any of its members and which is directly If the organization’s governing body delegated authority to connected to distribution facilities owned by such company or act on its behalf to an executive committee or similar committee any of its members (other than income received or accrued with broad authority to act on behalf of the governing body, and directly or indirectly from a member). the committee held such authority at any time during the 4. From any nuclear decommissioning transaction. organization’s tax year, describe on Schedule O (Form 990) the 5. From any asset exchange or conversion transaction. composition of the committee, whether any of the committee’s

members are not on the governing body, and the scope of the For a mutual or cooperative telephone company, gross committee’s authority. The organization need not describe on income does not include amounts received or accrued either Schedule O (Form 990) delegations of authority that are limited from another telephone company for completing long distance in scope to particular areas or matters, such as delegations to calls to or from or between the telephone company’s members, an audit committee, investment committee, or compensation from qualified pole rentals, from the sale of display listings in a committee of the governing body. directory furnished to the telephone company’s members, or

from prepayment of a loan under section 306A, section 306B, Line 1b. State the number of independent voting members of

or section 311 of the Rural Electrification Act of 1936 (as in the organization’s governing body as of the end of the

effect on January 1, 1987). organization’s tax year. A member of the governing body is

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considered “independent” only if all three of the following 990-EZ) if the related organization, C, were required to file

circumstances applied at all times during the organization’s tax Schedule L (Form 990 or 990-EZ).

year. See also Examples 2 and 3 in the Instructions for Form 990, 1. The member was not compensated as an officer or other Part VII, Section A, line 5, later. employee of the organization or of a related organization (see Reasonable effort. The organization need not engage in the instructions for Schedule R (Form 990)) except as provided more than a reasonable effort to obtain the necessary in the religious exception discussed below. information to determine the independence of members of the 2. The member did not receive total compensation or other governing body and may rely on information provided by such payments exceeding $10,000 during the organization’s tax year members. For instance, the organization may rely on from the organization or from related organizations as an information it obtains in response to a questionnaire sent independent contractor, other than reimbursement of annually to each member of the governing body that includes expenses under an accountable plan or reasonable the name, title, date, and signature of each person reporting compensation for services provided in the capacity as a

member of the governing body. For example, a person who information, and containing the pertinent instructions and

definitions for line 1b, to determine whether the member is or is receives reasonable expense reimbursements and reasonable not independent. compensation as a director of the organization does not cease

to be independent merely because he or she also receives Line 2. Answer “Yes” if any of the organization’s officers, payments of $7,500 from the organization for other directors, trustees, or key employees, as reported in Part VII,

arrangements. Section A, had a family relationship or business relationship

3. Neither the member, nor any family member of the with another of the organization’s officers, directors, trustees, or

member, was involved in a transaction with the organization key employees, as reported in Part VII, Section A, at any time

(whether directly or indirectly through affiliation with another during the organization’s tax year. For each family and business

organization) that is required to be reported on Schedule L relationship, identify the persons and describe their relationship

(Form 990 or 990-EZ) for the organization’s tax year, or in a on Schedule O (Form 990). It is sufficient to state “family

transaction with a related organization of a type and amount relationship” or “business relationship” without greater detail.

that would be reportable on Schedule L (Form 990 or 990-EZ) if Business relationship. Business relationships between required to be filed by the related organization. two persons include any of the following.

A member of the governing body is not considered to lack 1. One person is employed by the other in a sole

independence merely because of the following circumstances. proprietorship or by an organization with which the other is

associated as a trustee, director, officer, key employee, or 1. The member is a donor to the organization, regardless of greater-than-35% owner. the amount of the contribution.

2. One person is transacting business with the other (other 2. Religious exception: The member has taken a bona fide

than in the ordinary course of either party’s business on the vow of poverty and either (a) receives compensation as an

same terms as are generally offered to the public), directly or agent of a religious order or a section 501(d) religious or indirectly, in one or more contracts of sale, lease, license, loan, apostolic organization, but only under circumstances in which performance of services, or other transaction involving transfers the member does not receive taxable income (see Rev. Rul. of cash or property valued in excess of $10,000 in the 77-290, 1977-2 C.B. 26 and Rev. Rul. 80-332, 1980-2 C.B. 34) aggregate during the organization’s tax year. (Indirect or (b) belongs to a religious order that receives sponsorship or transactions are transactions with an organization with which payments from the organization which do not constitute taxable the one person is associated as a trustee, director, officer, key income to the member.

employee, or greater-than-35% owner). 3. The member receives financial benefits from the

3. The two persons are each a director, trustee, officer, or organization solely in the capacity of being a member of the greater than 10% owner in the same business or investment charitable or other class served by the organization in the entity. exercise of its exempt function, such as being a member of a

section 501(c)(6) organization, so long as the financial benefits Ownership is measured by stock ownership (either voting comply with the organization’s terms of membership. power or value) of a corporation, profits or capital interest in a

Example 1. B is a voting member of the organization’s partnership or limited liability company, membership interest in

board of directors. B is also a partner with a profits and capital a nonprofit organization, or beneficial interest in a trust.

interest greater than 5% in a law firm, C, that charged $120,000 Ownership includes indirect ownership (for example, ownership

to the organization for legal services in a court case. The in an entity that has ownership in the entity in question); there

transaction between C and the organization must be reported may be ownership through multiple tiers of entities.

on Schedule L (Form 990 or 990-EZ) because it is a transaction Privileged relationship exception. For purposes of line 2, between the organization and an entity of which B is a more a “business relationship” does not include a relationship than 5% owner, and because the payment to C from the between an attorney and client, a medical professional organization exceeded $100,000 (see the instructions to (including psychologist) and patient, or a priest/clergy and Schedule L (Form 990 or 990-EZ), Part IV, regarding both penitent/communicant. factors). Accordingly, B is not an independent member of the

governing body because the $120,000 payment must be Example 1. B is an officer of the organization, and C is a

reported on Schedule L (Form 990 or 990-EZ) as an indirect member of the organization’s governing body. B is C’s

business transaction with B. If B were an associate attorney (an brother-in-law. The organization must report that B and C have

employee) but not an officer, director, trustee, key employee, or a family relationship.

owner of the law firm, the transaction would not affect B’s status Example 2. D and E are officers of the organization. D is as an independent member of the organization’s governing also a partner in an accounting firm with 300 partners (with a body. 1

/300 interest in the firm’s profits and capital) but is not an officer,

Example 2. D is a voting member of both the organization’s director, trustee, or key employee of the accounting firm. D’s

governing body and the governing body of C, a related accounting firm provides services to E in the ordinary course of

organization. D’s daughter, E, received $40,000 in taxable the accounting firm’s business, on terms generally offered to

compensation as a part-time employee of C. D is not an the public, and receives $100,000 in fees during the year. The

independent member of the governing body, because E relationship between D and E is not a reportable business

received compensation from C, a related organization to D, and relationship, either because (1) it is in the ordinary course of

the compensation was of a type (compensation to a family business on terms generally offered to the public, or because

member of a member of C’s governing body) and amount (over (2) D does not hold a greater-than-35% interest in the

$10,000) that would be reportable on Schedule L (Form 990 or accounting firm’s profits or capital.

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Example 3. F and G are trustees of the organization. F is directors, trustees, or key employees, conflicts of interest,

the owner and CEO of an automobile dealership. G purchased whistleblowers, or document retention and destruction; and

a $45,000 car from the dealership during the organization’s tax • The composition or procedures contained within the

year in the ordinary course of the dealership’s business, on organizing document or bylaws of an audit committee.

terms generally offered to the public. The relationship between Example. Organization X has a written conflicts of interest F and G is not a reportable business relationship because the policy that is not contained within the organizing document or transaction was in the ordinary course of business on terms bylaws. The policy is changed by board resolution. The policy generally offered to the public. change does not need to be reported on line 4.

Example 4. H and J are members of the organization’s Examples of insignificant changes made to organizing or board of directors. Both are CEOs of publicly traded enabling documents or bylaws that are not required to be corporations and serve on each other’s boards. The relationship reported here include changes to the organization’s registered between H and J is a reportable business relationship because agent with the state and to the required or permitted number or each is a director or officer in the same business entity. frequency of governing body or member meetings. Example 5. K is a key employee of the organization, and L Describe significant changes on Schedule O (Form 990), but is on its board of directors. L is a greater-than-35% partner of a do not attach a copy of the amendments or amended document law firm that charged $60,000 during the organization’s tax year to Form 990 (or recite the entire amended document verbatim), for legal services provided to K that were worth $600,000 at the unless such amended documents reflect a change in the law firm’s ordinary rates. Thus, the ordinary course of business organization’s name. See the instructions for Item B under exception does not apply. However, the relationship between K Entity section. Items A–M, regarding attachments required in and L is not a reportable business relationship, because of the the event of a change in the organization’s name. privileged relationship of attorney and client.

Reasonable effort. The organization is not required to If an exempt organization changes its legal structure,

provide information about a family or business relationship such as from a trust to a corporation, then a new

between two officers, directors, trustees, or key employees exemption application is required to establish that the

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if it is unable to secure the information after making a new legal entity qualifies for exemption.

reasonable effort to obtain it. An example of a reasonable effort Line 5. Answer “Yes” if the organization became aware during would be for the organization to distribute a questionnaire the organization’s tax year of a material diversion of its assets, annually to each such person that includes the name, title, date, whether or not the diversion occurred during the year. If “Yes,” and signature of each person reporting information and explain the nature of the diversion, amounts or property contains the pertinent instructions and definitions for line 2. involved, corrective actions taken to address the matter, and

Line 3. Answer “Yes” if at any time during the organization’s pertinent circumstances on Schedule O (Form 990), although

tax year the organization used a management company or the person or persons who diverted the assets should not be

other person to perform any management duties customarily identified by name.

performed by or under the direct supervision of officers, A diversion of assets includes any unauthorized conversion directors, trustees, or key employees. Such management or use of the organization’s assets other than for the duties include, but are not limited to, hiring, firing, and organization’s authorized purposes, including but not limited to supervising personnel, planning or executing budgets or embezzlement or theft. Report diversions by the organization’s financial operations, or supervising exempt operations or officers, directors, trustees, employees, volunteers, unrelated trades or businesses of the organization. independent contractors, grantees (diverting grant funds), or Management duties do not include administrative services any other person, even if not associated with the organization (such as payroll processing) that do not involve significant other than by the diversion. A diversion of assets does not managerial decision-making. Management duties also do not include an authorized transfer of assets for fair market value include investment management unless the filing organization consideration, such as to a joint venture or for-profit subsidiary conducts investment management services for others. in exchange for an interest in the joint venture or subsidiary. For Line 4. The organization must report significant changes to its this purpose, a diversion is considered material if the gross organizing or enabling document by which it was created dollar amount (not taking into account restitution, insurance, or (articles of incorporation, association, or organization; trust similar recoveries) exceeds the lesser of (1) $250,000 or (2) 5% instrument; constitution; or similar document), and to its rules of the organization’s gross receipts for its tax year or total

governing its affairs commonly known as bylaws (or regulations, assets as of the end of its tax year. operating agreement, or similar document). Report changes

made since the prior Form 990 was filed, or that were not Note. A diversion of assets may in some cases constitute

inurement of the organization’s net earnings. In the case of reported on any prior Form 990. Do not report changes to section 501(c)(3) and section 501(c)(4) organizations, it also policies described or established outside of the organizing or may be an excess benefit transaction taxable under section enabling document and bylaws (or similar documents), such as 4958 and reportable on Schedule L (Form 990 or 990-EZ). adoption of, or change to, a policy adopted by resolution of the

governing body that does not entail a change to the organizing Line 6. Answer “Yes” if the organization is organized as a document or bylaws. stock corporation, a joint-stock company, a partnership, a joint

Examples of significant changes to the organizing or venture, or a limited liability company. Also answer “Yes” if the

enabling document or bylaws include changes to: organization is organized as a non-stock, nonprofit, or

• The organization’s exempt purposes or mission; not-for-profit corporation or association with members. For

• The number, composition, qualifications, authority, or duties purposes of Form 990, Part VI, member means (without regard

of the governing body’s voting members; to what a person is called in the governing documents) any

• The number, composition, qualifications, authority, or duties person who, pursuant to a provision of the organization’s

of the organization’s officers or key employees; governing documents or applicable state law, has the right to

• The role of the stockholders or membership in governance; participate in the organization’s governance or to receive

• The distribution of assets upon dissolution; distributions of income or assets from the organization. For

• The provisions to amend the organizing or enabling instance, for purposes of Part VI, a membership organization

document or bylaws; includes members with the following kinds of rights.

• The quorum, voting rights, or voting approval requirements of 1. The members elect the members of the governing body

the governing body members or the organization’s stockholders (but not if the persons on the governing body are the

or membership; organization’s only members) or their delegates.

• The policies or procedures contained within the organizing 2. The members approve significant decisions of the

documents or bylaws regarding compensation of officers, governing body.

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3. The members may receive a share of the organization’s was or will be conducted, state “No review was or will be

profits or excess dues or a share of the organization’s net conducted.”

assets upon the organization’s dissolution. Example. The return preparer emails a copy of the final

Answer “No” if the organization is a trust for federal tax version of Form 990 to each board member before it was filed.

purposes. Describe on Schedule O (Form 990) the classes of However, no board member undertakes any review of the form

members or stockholders with the rights described above. either before or after filing. Because a copy of the final version

Line 7a. Answer “Yes” on line 7a if at any time during the of the form was provided to each voting member of the

organization’s tax year there were one or more persons (other organization’s governing body before it was filed, the

than the organization’s governing body itself, acting in such organization may answer “Yes” even though no review took

capacity) that had the right to elect or appoint one or more place. The organization must describe its Form 990 review

members of the organization’s governing body, whether process (or lack thereof) on Schedule O (Form 990).

periodically, or as vacancies arise, or otherwise. If “Yes,” Line 11. The IRS needs a mailing address to contact the describe on Schedule O (Form 990) the class or classes of organization’s officers, directors, trustees, and key such persons and the nature of their rights. employees. The organization may use its official mailing

Line 7b. Answer “Yes” on line 7b if at any time during the address stated on the first page of Form 990 as the mailing

organization’s tax year there were one or more persons address for such persons. Otherwise, state on Schedule O

(whether members, stockholders, or otherwise) who had the (Form 990) the mailing addresses for such persons that are to

right to approve or ratify decisions of the organization’s be contacted at a different address. Such information will be

governing body, such as approval of the governing body’s available to the public.

election or removal of members of the governing body, or Section B. Policies approval of the governing body’s decision to dissolve the

organization. If “Yes,” describe on Schedule O (Form 990) the Line 12a. State whether, as of the end of the organization’s

class or classes of such persons, the decisions that require tax year, the organization had a written conflict of interest

their approval, and the nature of their voting rights. policy. A conflict of interest policy defines conflicts of interest,

Line 8. Answer “Yes” on lines 8a and 8b if the organization identifies the classes of individuals within the organization

contemporaneously documented by any means permitted by covered by the policy, facilitates disclosure of information that

state law every meeting held and written action taken during the may help identify conflicts of interest, and specifies procedures

organization’s tax year by its governing body to be followed in managing conflicts of interest. A conflict of and committees

with authority to act on behalf of the governing body (which interest arises when a person in a position of authority over an

ordinarily do not include advisory boards). Documentation organization, such as an officer, director, or manager, may

permitted by state law may include approved minutes, strings of benefit financially from a decision he or she could make in such

emails, or similar writings that explain the action taken, when it capacity, including indirect benefits such as to family members

was taken, and who made the decision. For this purpose, or businesses with which the person is closely associated. For

contemporaneous means by the later of (1) the next meeting of this purpose, a conflict of interest does not include questions

the governing body or committee (such as approving the involving a person’s competing or respective duties to the

minutes of the prior meeting), or (2) 60 days after the date of organization and to another organization, such as by serving on

the boards of both organizations, that do not involve a material the meeting or written action. If “No,” explain on Schedule O financial interest of, or benefit to, such person. (Form 990) the organization’s practices or policies, if any,

regarding documentation of meetings and written actions of its Example. B is a member of the governing body of X governing body and committees with authority to act on its Charity and of Y Charity, both of which are section 501(c)(3) behalf. public charities with different charitable purposes. X Charity has

Line 9a. Answer “Yes” if the organization had during its tax taken a public stand in opposition to a specific legislative

year any local chapters, branches, lodges, units, or similar proposal. At an upcoming board meeting, Y Charity will

affiliates. These terms include organizations over which the consider whether to publicly endorse the same specific

organization has the legal authority to exercise supervision and legislative proposal. While B may have a conflict of interest in

control (whether or not in a group exemption) and local units this decision, the conflict does not involve a material financial

that are not separate legal entities under state law over which interest of B’s merely as a result of Y Charity’s position on the

the organization has such authority. legislation.

Line 9b. Written policies and procedures governing the Line 12b. Answer “Yes” if the organization’s officers,

activities of chapters, branches, and affiliates to ensure their directors, trustees, and key employees, and those of family

consistency with activities of the organization are documents members, are required to disclose or update annually (or more

used by the organization and its local units to address the frequently) their interests that could give rise to conflicts of

policies, practices, and activities of the local unit. Such policies interest, such as a list of family members, substantial business

and procedures may include required provisions in the or investment holdings, and other transactions or affiliations

chapter’s articles of organization or bylaws, a manual provided with businesses and other organizations and those of family

to chapters, a constitution, or similar documents. If “No,” explain members.

on Schedule O (Form 990) how the organization ensures that Line 12c. If “Yes,” describe on Schedule O (Form 990) the the local unit’s activities are consistent with its own. organization’s practices for monitoring proposed or ongoing

Note. The central organization (parent organization) of a transactions for conflicts of interest and dealing with potential or

group exemption ruling is required to exercise oversight over actual conflicts, whether discovered before or after the

its subordinate organizations as a condition of the group transaction has occurred. The description should include an

exemption. explanation of which persons are covered under the policy, the

level at which determinations of whether a conflict exists are Line 10. Answer “Yes” only if a copy of the organization’s final made, and the level at which actual conflicts are reviewed. Also Form 990 (including required schedules), as ultimately filed with explain any restrictions imposed on persons with a conflict, the IRS, was provided to each voting member of the such as prohibiting them from participating in the governing organization’s governing body, whether in paper or electronic body’s deliberations and decisions in the transaction. form, prior to its filing with the IRS. Also describe on Schedule

O (Form 990) the process, if any, by which any of the Lines 13 and 14. A whistleblower policy encourages staff and

organization’s officers, directors, trustees, board committee volunteers to come forward with credible information on illegal

members, or management reviewed the prepared Form 990, practices or violations of adopted policies of the organization,

whether before or after it was filed with the IRS, including specifies that the organization will protect the individual from

specifics regarding who conducted the review, when they retaliation, and identifies those staff or board members or

conducted it, and the extent of any such review. If no review outside parties to whom such information can be reported. A

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document retention and destruction policy identifies the record with other members of the venture or arrangement, such terms

retention responsibilities of staff, volunteers, board members, and safeguards as are adequate to ensure that the

and outsiders for maintaining and documenting the storage and organization’s exempt status is protected, and

destruction of the organization’s documents and records. 2. taken steps to safeguard the organization’s exempt

Answer “Yes” if the organization had these policies in place as status with respect to the venture or arrangement.

of the last day of the organization’s tax year.

Certain federal or state laws may provide protection Some examples of safeguards include the following:

against whistleblower retaliation and prohibit destruction • Control over the venture or arrangement sufficient to ensure

of certain documents. For instance, while the federal that the venture furthers the exempt purpose of the

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Sarbanes-Oxley legislation generally does not pertain to organization.

tax-exempt organizations, it does impose criminal liability on • Requirements that the venture or arrangement give priority to

exempt purposes over maximizing profits for the other tax-exempt as well as other organizations for (1) retaliation

against whistleblowers that report federal offenses, and (2) for participants.

destruction of records with the intent to obstruct a federal • The venture or arrangement not engage in activities that

investigation. See 18 U.S.C. sections 1513(e) and 1519. Also would jeopardize the organization’s exemption (such as political

note that an organization is required to keep books and records intervention or substantial lobbying for a section 501(c)(3)

relevant to its tax exemption and its filings with the IRS. Some organization).

states provide additional protection for whistleblowers. • All contracts entered into with the organization be on terms

that are at arm’s length or more favorable to the organization. Line 15. Answer “Yes” on line 15a if the organization used a

process for determining compensation (reported in Part VII or

Schedule J (Form 990)) of the CEO, executive director, or other Section C. Disclosure

person who is the top management official, that included all of Line 17. Use Schedule O (Form 990) if additional space is the following elements. necessary. • Review and approval by a governing body or compensation

committee, provided that persons with a conflict of interest with Some states require or permit the filing of Form 990 to respect to the compensation arrangement at issue were not fulfill state exempt organization or charitable solicitation involved. For purposes of this question, use the definition of reporting requirements.

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“conflict of interest” set forth in Regulations section

53.4958-6(c)(1)(iii). Line 18. Explain on Schedule O (Form 990) if the organization • Use of data as to comparable compensation for similarly does not make publicly available upon request any of Forms qualified persons in functionally comparable positions at 1023, 1024, 990, or 990-T, if such disclosure is required by law. similarly situated organizations. Exempt organizations must make publicly available their Form • Contemporaneous documentation and recordkeeping with 1023 or 1024 application for recognition of exemption. respect to deliberations and decisions regarding the Applications filed before July 15, 1987, need not be made compensation arrangement. publicly available unless the organization had a copy on July

Answer “Yes” on line 15b if the process for determining 15, 1987. Organizations that file Form 990 must make it publicly

compensation of one or more officers or key employees other available for a period of three years from the date it is required

than the top management official included all of the elements to be filed (including extensions) or, if later, is actually filed.

listed above. Organizations are not required to make publicly available the

names and addresses of contributors (as set forth on Schedule If the answer was “Yes” on line 15a or 15b, describe the B (Form 990, 990-EZ, or 990-PF), and on Form 1023 or 1024). process on Schedule O (Form 990), identify the offices or Section 501(c)(3) organizations that file Form 990-T also are positions for which the process was used to establish required to make their Form 990-T publicly available for the compensation of the persons who served in those offices or corresponding three-year period, for forms filed after August 17, positions, and state the year in which this process was last 2006 (unless the form was filed solely to request a refund of undertaken for each such person. telephone excise taxes). See Appendix D for more information

Line 16. Answer “Yes” on line 16a if at any time during its tax on public inspection requirements.

year the organization invested in, contributed assets to, or

otherwise participated in a joint venture or similar arrangement Line 19. Explain on Schedule O (Form 990) whether the

with one or more taxable persons. For purposes of line 16, a organization makes its governing documents, conflict of

interest policy, and financial statements (whether or not joint venture or similar arrangement (or a “venture or

arrangement”) means any joint ownership or contractual audited) available to the general public, and if so, how it makes

arrangement through which there is an agreement to jointly them available to the public (for example, posting on the

undertake a specific business enterprise, investment, or organization’s website, posting on another website, providing

exempt-purpose activity without regard to (1) whether the copies on request, inspection at an office of the organization,

organization controls the venture or arrangement, (2) the legal etc.). If the organization does not make any of these documents

structure of the venture or arrangement, or (3) whether the available to the public, state “No documents available to the

venture or arrangement is treated as a partnership for federal public.”

income tax purposes, or as an association, or corporation for Federal tax law does not require that such documents be federal income tax purposes. Disregard ventures or

arrangements that meet both of the following conditions. made publicly available unless they were included on a form

that is publicly available (such as Form 1023 or 1024). 1. 95% or more of the venture’s or arrangement’s income

for its tax year ending with or within the organization’s tax year Line 20. Provide the name of the person who possesses the is described in sections 512(b)(1)–(5) (including unrelated organization’s books and records, and the business address debt-financed income). and telephone number of such person (or of the organization if 2. The primary purpose of the organization’s contribution to, the books and records are kept by such person at a personal or investment or participation in, the venture or arrangement is residence). If the books and records are kept at more than one the production of income or appreciation of property. location, provide the name, business address, and telephone

number of the person responsible for coordinating the Answer “Yes” on line 16b if, as of the end of the maintenance of the books and records. The organization is not organization’s tax year, the organization had both: required to provide the address or telephone number of a

1. adopted a written policy or procedure that requires the personal residence of an individual. If provided, however, such

organization to negotiate, in its transactions and arrangements information will be available to the public.

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• Current five highest compensated employees other than Part VII. Compensation of Officers, officers, directors, trustees, or listed key employees (over

Directors, Trustees, Key Employees, $100,000 of reportable compensation).

• Former officers, key employees, and highest compensated Highest Compensated Employees, and employees (over $100,000 of reportable compensation, with

special rules for former highest compensated employees). Independent Contractors • Former directors and trustees (over $10,000 of reportable Overview. Form 990, Part VII requires the listing of the compensation in the capacity as a former director or trustee). organization’s current or former officers, directors, trustees, Special rules described below apply for disregarded key employees and highest compensated employees, and entities of which the organization is the sole member. current independent contractors, and reporting of certain

compensation information relating to such persons. To determine which persons are current or former officers,

All organizations are required to complete Part VII, and when directors, trustees, key employees, or highest compensated

applicable, Schedule J (Form 990), for certain persons. employees, see the instructions to Part VII, Section A, column

Compensation must be reported for the calendar year ending (C) below.

with or within the organization’s tax year. In some cases, Fiscal year filers. To determine which persons are listed in persons are reported in Part VII or Schedule J (Form 990) only Part VII, Section A, the organization must use the calendar year if their reportable compensation (as explained below) or total ending with or within the organization’s fiscal year for some

compensation (as explained below) from the organization and (those whose compensation must exceed minimum thresholds

related organizations (as explained in the instructions for in order to be reported) and the fiscal year for others. Report Schedule R (Form 990)) exceeds certain thresholds. In some officers, directors, and trustees that served at any time during cases, compensation from an unrelated organization must be the fiscal year (such as “current” officers, directors, and reported on Form 990. See the instructions for Part VII, Section trustees). Report the following persons based on reportable A, line 5, later. The amount of compensation reported on Form compensation and status for the calendar year ending within 990, Part VII, for a listed person may differ from the amount the fiscal year. reported on Form 990, Part IX, line 5, for such person due to • Current key employees (over $150,000 of reportable factors such as a different reporting period (calendar vs. fiscal compensation from the organization and related

year) or a different reporting method. organizations).

Form 990, Part VII relies on definitions of reportable • Current five highest compensated employees (over

compensation and other compensation. Reportable $100,000 of reportable compensation from the organization and

compensation related organizations). generally refers to compensation reported on

Form W-2, box 5, and Form 1099-MISC, box 7. Organizations • Former officers, key employees, and five highest

must report other compensation in Part VII as well, as compensated employees (over $100,000 of reportable

discussed further below. compensation from the organization and related organizations,

with special rules for former highest compensated employees). Organizations must report compensation for both current • Former directors and trustees (over $10,000 of reportable and former officers, directors, trustees, key employees, and compensation for services in the capacity as director or trustee highest compensated employees. The distinction between of the organization, from the organization and related current and former such persons is discussed below. The organizations). determination of “former” uses a 5-year look-back period.

Organizations must report compensation from themselves Report compensation on Form 990, Part VII, for the calendar

and from related organizations, which generally consist of year ending within the organization’s fiscal year, including that

parents, subsidiaries, brother/sister organizations, supporting of current officers, directors, and trustees, even if the fiscal year

organizations, and supported organizations. See the is used to determine which such persons must be listed in Part

instructions for Schedule R (Form 990) for a fuller discussion of VII.

related organizations. Director or trustee. A “director or trustee” is a member of the

Part VII, Section A requires reporting of officers, directors, organization’s governing body, but only if the member has

trustees, key employees, and up to five of the organization’s voting rights. A director or trustee that served at any time during highest compensated employees. Compensation from related the organization’s tax year is deemed a current director or

organizations must also be taken into account in determining a trustee. Members of advisory boards that do not exercise any

person’s compensation and reported separately in Part VII, governance authority over the organization are not considered Section A, columns (E) and (F). Part VII, Section A provides directors or trustees.

space for listing up to 34 different persons. An “institutional trustee” is a trustee that is not an individual

Use Schedule J-2, (Form 990), Continuation Sheet, if more or natural person but an organization. For instance, a bank or space is needed to list additional persons. Use as many trust company serving as the trustee of a trust is an institutional Schedules J-2 (Form 990) as needed. trustee.

Section B requires reporting of the five highest compensated Officer. An “officer” is a person elected or appointed to independent contractors. Section B does not require reporting manage the organization’s daily operations, such as a of compensation from related organizations. president, vice-president, secretary, or treasurer. An officer that

served at any time during the organization’s tax year is deemed Section A. Officers, Directors, Trustees, Key a current officer. The officers of an organization are determined Employees, and Highest Compensated by reference to its organizing document, bylaws, or resolutions Employees of its governing body, or as otherwise designated consistent

Overview. Organizations are required to list in Part VII, with state law, but, at a minimum, include those officers

Section A, the following officers required by applicable state law. This definition encompasses , directors, trustees, and

employees “officers of the board” and “officers of the corporation.” For of the organization whose reportable

compensation from the organization and related purposes of Form 990, including Part VII, Section A, and

organizations (as explained in the instructions for Schedule R Schedule J (Form 990), treat as an officer the following

persons, regardless of their titles. (Form 990)) exceeded the following thresholds.

• Current officers, directors, and trustees (no minimum 1. Top management official. The person who has ultimate

compensation threshold). responsibility for implementing the decisions of the governing

• Current key employees (over $150,000 of reportable body or for supervising the management, administration, or

compensation). operation of the organization.

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2. Top financial official. The person who has ultimate Example 3. U is a large acute-care section 501(c)(3)

responsibility for managing the organization’s finances. hospital. U employs X as a radiologist. X gives instructions to

staff with respect to the radiology work X conducts, but X does If ultimate responsibility resides with two or more individuals (for not supervise other U employees, manage the radiology example, co-presidents or co-treasurers), who may exercise department, or have or share authority to control or determine such responsibility in concert or individually, then treat all such 10% or more of U’s capital expenditures, operating budget, or individuals as officers. employee compensation. Under these facts and circumstances,

Key employee. For purposes of Form 990, a current key X does not meet the Responsibility Test and is not a key

employee is an employee of the organization (other than an employee of U.

officer, director or trustee) who meets all three of the Example 4. W is a cardiologist and head of the cardiology following tests, applied in the following order: department of the same hospital U described above. The 1. $150,000 Test: Receives reportable compensation cardiology department is a major source of patients admitted to from the organization and all related organizations in excess U and consequently represents more than 10% of U’s income, of $150,000 for the calendar year ending with or within the as compared to U as a whole. As department head, W organization’s tax year. manages the cardiology department. Under these facts and 2. Responsibility Test: circumstances, W meets the Responsibility Test and is a key

a. Has responsibilities, powers, or influence over the employee of U.

organization as a whole that is similar to those of officers, Five highest compensated employees. The organization is directors, or trustees; required to list its current five highest compensated b. Manages a discrete segment or activity of the employees whose reportable compensation combined from

organization that represents 10% or more of the activities, the organization and related organizations is greater than assets, income, or expenses of the organization, as compared $100,000 for the calendar year ending with or within the to the organization as a whole; or organization’s tax year and who are not also an officer, c. Has or shares authority to control or determine 10% or director, trustee, or key employee of the organization. Such more of the organization’s capital expenditures, operating individuals are the “current” five highest compensated budget, or compensation for employees. employees. This may include persons who meet some but not 3. Top 20 Test: Is one of the 20 employees (that satisfy the all of the tests for key employee status. The organization is not $150,000 Test and Responsibility Test) with the highest required to list more than the top five such persons, ranked by reportable compensation from the organization and related amount of reportable compensation. Use the calendar year organizations for the calendar year ending with or within the ending with or within the organization’s tax year for determining organization’s tax year. the organization’s current five highest compensated employees.

If the organization has more than 20 individuals who meet the Example. X is an employee of Y University and is not an

$150,000 Test and Responsibility Test , report as key officer, director, or trustee. X’s reportable compensation for the

employees only the 20 individuals that have the highest calendar year exceeds $150,000, and X meets the

reportable compensation from the organization and related Responsibility Test. X would qualify as a key employee of Y,

organizations. Note that any others, up to five, might be except that 20 employees had higher reportable compensation

reportable as current highest compensated employees, with and otherwise qualify as key employees; therefore, those 20

over $100,000 in reportable compensation. Use the calendar are listed as the organization’s key employees. X has the

year ending with or within the organization’s tax year for highest reportable compensation from the organization and

determining the organization’s current key employees. related organizations of all employees other than the 20 key

employees. X must be listed as one of the organization’s five An individual that is not an employee of the organization (or highest compensated employees. of a disregarded entity of the organization) is nonetheless

treated as a key employee if he or she serves as an officer or $10,000 exceptions for reporting compensation. Report

director of a disregarded entity of the organization and compensation paid or accrued by the filing organization and

otherwise meets the standards of a key employee set forth related organizations. Special rules apply with respect to

above. See Disregarded Entities, later, for treatment of certain reporting reportable compensation and other compensation.

employees of a disregarded entity as a key employee of the All reportable compensation paid by the filing organization organization. must be reported. Reportable compensation paid by a related

Management companies and similar entities that are organization is not required to be reported unless (1) it is

independent contractors should not be reported as key $10,000 or more for the calendar year ending with or within the

employees. The organization’s top management official and organization’s tax year (the “$10,000-per-related-organization

top financial official are deemed officers rather than key exception”), or (2) it is paid for past services to the filing

employees. organization in the person’s capacity as a former director or

trustee. In the examples set forth below, assume the individual A particular item of other compensation (such as described involved is an employee that satisfies the $150,000 Test and in the compensation table below) paid or accrued by the filing Top 20 Test and is not an officer, director, or trustee. organization is not required to be reported unless (1) it is Example 1. T is a large section 501(c)(3) university. L is the $10,000 or more for the calendar year ending with or within the dean of the law school of T, which generates more than 10% of organization’s tax year (the “$10,000-per-item exception”), or the revenue of T, including contributions from alumni and (2) it is one of the five types of compensation (generally foundations. Although L does not have ultimate responsibility constituting deferred compensation and health benefits) that for managing the university as whole, L meets the must be reported regardless of amount (see below). The same Responsibility Test and is reportable as a key employee of T. principles apply with respect to items of other compensation

Example 2. S chairs a small academic department in the paid or accrued by a related organization (applied separately to

College of Arts and Sciences of the same university, T, each related organization).

described above. As department chair, S supervises faculty in The $10,000 exceptions do not apply to reporting the department, approves the course curriculum, and oversees compensation on Schedule J (Form 990), Part II. the operating budget for the department. The department CAUTION

!

represents less than 10% of the university’s activities, assets,

income, expenses, capital expenditures, operating budget, and Reportable compensation. Reportable compensation

employee compensation. Under these facts and circumstances, consists of:

S does not meet the Responsibility Test and is not a key • For officers and other employees, amounts required to be

employee of T. reported on Form W-2, box 5;

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• For directors and individual trustees, amounts required to least 10 percent of the activities, assets, income, or expenses

be reported on Form 1099-MISC, box 7 (plus Form W-2, box 5 of the filing organization as a whole, or has or shares authority

if also compensated as an officer or employee); and to control or determine the disregarded entity’s capital

• For institutional trustees, fees for services paid pursuant to expenditures, operating budget, or compensation for employees

a contractual agreement or statutory entitlement. While the that constitutes at least 10 percent of the filing organization’s

compensation of institutional trustees must be reported on Form respective items as a whole. If an officer or director of a

990, Part VII, it need not be reported on Schedule J (Form 990). disregarded entity also serves as an officer, director, trustee, or

key employee of the organization, report this individual as an If the organization did not file a Form 1099-MISC because officer, director, trustee, or key employee, as applicable, of the the amounts paid were below the threshold reporting organization, and add the compensation, if any, paid by the requirement, then include and report the amount actually paid. disregarded entity to this individual to the compensation, if any, Corporate officers are considered employees for paid directly by the organization to this individual. Report the purposes of Form W-2 reporting, unless they perform no total aggregate amount in Column (D). services as officers, or perform only minor services and

TIP

Management companies. Management companies, as neither receive nor are entitled to receive, directly or indirectly, independent contractors, are reported on Form 990, Part VII any compensation. Corporate directors are considered (if at all) only in Section B. Independent Contractors, and are independent contractors, not employees, and director not reported on Schedule J (Form 990), Part II. If a current compensation, if any, generally is required to be reported on officer, director, trustee, or key employee listed on Form Form 1099-MISC. See Regulations section 31.3401(c)-1(f). 990, Part VII, Section A, has a relationship with a management For certain kinds of employees, such as certain members of company that provides services to the organization, then the the clergy and religious workers who are not subject to social relationship may be reportable on Schedule L (Form 990 or security and Medicare taxes as employees, box 5 of Form W-2 990-EZ), Part IV. The same is true for a former officer, director, may be zero or blank. In such case, the amount required to be trustee, or key employee within the last five years, whether or reported on Form W-2, box 1 must be reported as reportable not listed on Form 990, Part VII, Section A. If a current or compensation. former officer, director, trustee, key employee, or highest

To determine whether an individual received more than compensated employee receives compensation from a

$100,000 (or $150,000) in reportable compensation in the management company that provides services to the

aggregate from the organization and related organizations, organization and is a related organization, then the individual’s

add the following amounts. compensation from the management company must be

• The amount reported on Form W-2, box 5 or Form reported on Form 990, Part VII, Section A, columns (E) and (F).

1099-MISC, box 7, issued to the individual by the organization. Questions pertaining to management companies also appear

• Amounts reported on Form W-2, box 5 or Form 1099-MISC, on Form 990, Part VI, line 3 and Schedule H (Form 990), Part

box 7, issued to the individual by each related organization that IV.

reported $10,000 or more. Column (A). For each person required to be listed, enter the

To determine whether an individual received solely in his or name in the top of each row and the person’s title or position

her capacity as a former trustee or director of the organization with the organization in the bottom of the row. If more than one

more than $10,000 in reportable compensation for the calendar title or position, list all. List persons in the following order:

year ending with or within the organization’s tax year, in the individual trustees or directors, institutional trustees,

aggregate, from the organization and all related organizations officers, key employees, highest compensated employees,

(and thus must be reported on Form 990, Part VII and Schedule and former such persons. Use Schedule J-2 (Form 990) if

J (Form 990), Part II), add the amounts reported on all Forms space is needed for additional persons or titles.

1099-MISC, box 7, and, if relevant, all Forms W-2, box 5, Column (B). For each person listed in column (A), estimate issued to the individual by the organization and all related the average hours per week devoted to the organization during organizations for the calendar year ending with or within the the year. Entry of a specific number is required for a complete organization’s tax year. Report such amounts only to the extent answer. Enter “-0-” if applicable. Do not include statements that such amounts relate to the individual’s past services as a such as “as needed,” “as required,” or “40+”. If the average is trustee or director of the organization, and do not disregard any less than one hour per week, then the organization may report payments from a related organization if below $10,000, for such a decimal rounded to the nearest tenth (for example, 0.2 hours

purpose. per week). For each person listed in column (A), provide an

Other compensation. Other compensation includes estimate of the average hours per week (if any) devoted to

compensation other than reportable compensation, including related organizations on Schedule O (Form 990).

deferred compensation not currently reportable on Form W-2, Column (C). For each person listed in column (A), check all box 5 or Form 1099-MISC, box 7, and certain nontaxable applicable boxes for positions with the organization. For a benefits, as discussed in detail in the instructions for Schedule former officer, director, trustee, key employee, or highest J, (Form 990), Part II. See the instructions for other compensated employee, check only the “Former” box and compensation reported in column (F) below, which includes a indicate the former status in the person’s title. table to show where and how to report certain types of “Current” officers, directors, trustees, key employees, compensation in Part VII, Section A, and Schedule J (Form and highest compensated employees. A “current” officer, 990). director, or trustee is a person that was an officer, director, or Disregarded entities. Disregarded entities (such as a limited trustee at any time during the organization’s tax year. A liability company that is wholly owned by the organization and “current” key employee or highest compensated employee is a not treated as a separate entity for federal tax purposes) are person who was a key employee or highest compensated treated as part of the organization rather than as related employee for the calendar year ending with or within the organizations for purposes of Form 990, including Part VII and organization’s tax year. Schedule J (Form 990). A person is not considered an officer If the organization files Form 990 based on a fiscal year, or director of the organization by virtue of being an officer or use the fiscal year to determine the organization’s “current” director of a disregarded entity, but he or she may qualify as a officers, directors, and trustees. Whether or not the organization key employee or highest compensated employee of the files Form 990 based on a fiscal year, use the calendar year organization. An officer, director, or employee of a disregarded ending with or within the organization’s tax year to determine entity is a key employee of the organization if he or she meets the organization’s “current” key employees and five highest the $150,000 Test and Top 20 Test for the filing organization as compensated employees. a whole, and if, with respect to the Responsibility Test, the

person has responsibilities, powers or influence over a discrete Do not check the “Former” box if the person was a current

segment or activity of the disregarded entity that represents at officer, director or trustee at any time during the organization’s

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tax year, or a current key employee or among the five highest within Y’s tax year. X receives reportable compensation in

compensated employees for the calendar year ending with or excess of $100,000 from Y for past services and would be

within the organization’s tax year. A current employee (other among Y’s five highest compensated employees if X were a

than a current officer, director, trustee, key employee, or current employee. Y must report X as a former highest

highest compensated employee) may be reported on Form 990, compensated employee on Y’s 2008 Form 990, Part VII,

Part VII and Schedule J, (Form 990), Part II: (1) as a former Section A.

director or trustee because he or she formerly served as a Example 2. T was reported as one of Y Charity’s five director or trustee and received more than $10,000 in highest compensated employees of over $50,000 on Y’s 2007 reportable compensation in the capacity as a former director Form 990. For 2008, T is not a current officer, director, trustee, or trustee, or (2) a former officer or key employee (but not as a key employee, or highest compensated employee of Y, former highest compensated employee) because he or she although T is still an employee of Y during the 2008 calendar qualified as an officer or key employee within the last five years year ending with or within Y’s tax year. T receives reportable and received more than $100,000 of reportable compensation. compensation in excess of $100,000 from Y and related In such case indicate the individual’s former position in his or organizations for such calendar year. T is not reportable as a her titles (for example, “former president”). former highest compensated employee on Y’s 2008 Form 990,

“Former” officers, directors, trustees, key employees, Part VII, Section A, because T was an employee of Y during the

and highest compensated employees. Check the “Former” calendar year ending with or within Y’s tax year.

box with respect to former officers, directors, trustees, and key Example 3. Z was reported as one of Y Charity’s key employees only if both conditions below apply. employees on Y’s 2006 Form 990. For 2008, Z is not a current • The organization reported (or should have reported, applying officer, director, trustee, key employee, or highest compensated the instructions in effect for such years) an individual on any of employee of Y. For 2008, Z receives reportable compensation the organization’s Forms 990, 990-EZ or 990-PF, for any one or of $90,000 from Y as an employee (and no reportable more of the five prior years in one or more of the following compensation from related organizations). Because Z receives capacities: officer, director, trustee, or key employee. less than $100,000 reportable compensation in 2008 from Y • The individual received reportable compensation in the and its related organizations, Y is not required to report Z as a calendar year ending with or within the organization’s current former key employee on Y’s 2008 Form 990, Part VII, Section tax year in excess of the threshold amount ($100,000 for A.

former officers and key employees, $10,000 for services in the Columns (D) & (E). Enter the amounts required to be reported capacity as a director or trustee). on Form W-2, box 5 or Form 1099-MISC, box 7, issued to the

person for the calendar year ending with or within the If a person was reported (or should have been reported) as an organization’s tax year. Enter an amount for each person in officer, director, trustee or key employee on any of the each of columns (D) and (E). Enter “-0-” if the person received organization’s prior five Forms 990, 990-EZ or 990-PF, and the no reportable compensation. For institutional trustees that person was still employed at any time during the organization’s do not receive a Form 1099-MISC, enter the amount that the tax year either (1) by the organization in a lesser capacity other organization would have reported in box 7 if a Form 1099-MISC than as an officer, director, trustee, key employee, or highest had been required. compensated employee; or (2) by a related organization in any

capacity, but not by the filing organization, check only the Treat amounts paid by a common paymaster as defined in

Regulations section 31.3121(s)-1(b) for services performed for “Former” box.

the organization as if paid directly by the organization. Similarly, Whether or not the organization files Form 990 based on a treat amounts paid by a common paymaster for services fiscal year, use the calendar year ending within the performed for a related organization as if paid directly by the organization’s tax year to determine all “former” officers, related organization. directors, trustees, key employees, and five highest

compensated employees (because their status depends on $10,000-per-related-organization exception. For

their reportable compensation, which is reported for the purposes of column (E), the organization need not include

calendar year). payments from a single related organization if less than

$10,000 for the calendar year ending with or within the Check the “Former” box with respect to former five highest organization’s tax year, except to the extent paid to a former compensated employees only if all four conditions below apply. director or former trustee of the filing organization for services 1. The individual was not an employee of the organization as a director or trustee of the organization. For example, if an at any time during the calendar year ending with or within the officer of the organization received compensation of $6,000, organization’s tax year. $15,000, and $50,000 from three separate related organizations 2. The individual was reported (or should have been for services provided to those organizations, the organization reported, applying the instructions in effect for such years) on needs to report only $65,000 in column (E) for the officer. any of the organization’s Form 990, 990-EZ, or 990-PF for one Volunteer exception. The organization need not report in or more of the five prior years as one of the five highest column (E) or (F) compensation from a related organization compensated employees. paid to a volunteer officer, director, or trustee of the 3. The individual’s reportable compensation exceeded organization if the related organization is a for-profit $100,000 for the calendar year ending with or within the organization, and is not owned or controlled directly or indirectly organization’s tax year. by the organization or one or more related tax-exempt 4. The amount of the individual’s reportable compensation organizations, and does not provide management services for a for such year would place him or her among the organization’s fee to the organization. current five highest compensated employees if the individual

were an employee during the calendar year ending with or Bank or financial institution trustee exception. If the

within the organization’s tax year. organization is a trust with a bank or financial institution trustee

that is also trustee of another trust, it need not report in column

Transition rule for non-section 501(c)(3) organizations. (E) or (F) compensation from the other trust for services

Organizations other than section 501(c)(3) organizations do not provided as the trustee to the other trust.

report any former highest compensated employees on Form Reasonable effort. The organization is not required to 990. report compensation from a related organization to a person

Example 1. X was reported as one of Y Charity’s five listed on Form 990, Part VII, Section A, if the organization is

highest compensated employees of over $50,000 on Y’s 2006 unable to secure the information on compensation paid by the

Form 990. For 2008, X is not a current officer, director, trustee, related organization after making a reasonable effort to obtain

key employee, or highest compensated employee of Y. X is not it. In such case, the organization shall report the efforts

an employee of Y during the 2008 calendar year ending with or undertaken on Schedule O (Form 990). An example of a

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reasonable effort is for the organization to distribute a $110,000 Reportable compensation (including $5,000 pre-tax

questionnaire annually to each such listed person that includes employee contribution to qualified defined contribution

the name, title, date, and signature of each person reporting retirement plan

information and containing the pertinent instructions and 5,000 Tax-deferred employer contribution to qualified defined

definitions for Form 990, Part VII, Section A, columns (E) and contribution retirement plan

5,000 Nontaxable employer contribution to health benefit plan (F). 4,000 Nontaxable dependent care assistance

500 Nontaxable group life insurance premium Column (F). Other compensation generally includes 8,000 Moving expense (nontaxable as qualified under section compensation not currently reportable on Form W-2, box 5 or 132) Form 1099-MISC, box 7, including nontaxable benefits other Organization Y, a related organization, also provides than disregarded benefits, as discussed in the instructions for compensation to the officer as follows: Schedule J, (Form 990), Part II. Treat amounts paid or accrued

under a deferred compensation plan, or held by a deferred $21,000 Reportable compensation (including $1,000 pre-tax compensation trust, that is established, sponsored, or employee contribution to qualified defined contribution maintained by the organization (or a related organization) as retirement plan) paid, accrued, or held directly by the organization (or the related 1,000 Tax-deferred employer contribution to qualified defined organization). Enter an amount for each person. (Enter “-0-” if contribution retirement plan applicable.) Report a reasonable estimate if actual numbers are 5,000 Nontaxable tuition assistance

not readily available.

The officer receives no compensation in the capacity as a

former director or trustee of X, and no unrelated organization The following items of compensation provided by the filing pays the officer for services provided to X. The organization organization must be reported as “other compensation” in may disregard as other compensation the (a) $4,500 in column (F) in all cases regardless of the amount to the extent dependent care and group life insurance payments from the they are not included in column (D). organization (under the $10,000-per-item exception); (b) the 1. Tax-deferred contributions by the employer to a qualified $8,000 moving expense from the organization (excluded under defined contribution retirement plan. section 132) on both Form 990, Part VII and Schedule J (Form

2. The annual increase in actuarial value of a qualified 990), Part II; and (c) the $5,000 in tuition assistance from the

defined benefit plan, whether or not funded or vested. related organization (under the $10,000-per-item exception) in

3. The value of health benefits provided by the employer determining whether the officer’s total reportable and other

that are not included in reportable compensation. For this compensation from the organization and related organizations

purpose, health benefits provided by the employer include exceeds $150,000. In this case, total reportable compensation

payments of health benefit plan premiums, medical is $131,000, and total other compensation (excluding the

reimbursement and flexible spending programs, and the value excludible items below $10,000) is $11,000. Under these

of health coverage (rather than actual benefits paid) provided circumstances, the officer’s dependent care, group life, moving

by an employer’s self-insured or self-funded arrangement. expenses, and tuition assistance items need not be reported as

Health benefits include dental, optical, drug, and medical other compensation on Form 990, Part VII, Section A, column

equipment benefits. They do not include disability or long-term (F), and the officer’s total reportable and other compensation

care insurance premiums or benefits for this purpose. ($142,000) is not reportable on Schedule J (Form 990). If

instead, the officer’s reportable compensation from Y were 4. Tax-deferred contributions by the employer and $30,000 rather than $21,000, then the officer’s total reportable employee to a nonqualified defined contribution plan, whether and other compensation ($151,000) would be reportable on or not funded, vested, or subject to a substantial risk of Schedule J (Form 990), including the dependent care, group forfeiture. life, and tuition assistance items, even though these items 5. The annual increase in actuarial value of a nonqualified would not have to be reported as other compensation in Form defined benefit plan, whether or not funded, vested, or subject 990, Part VII. to a substantial risk of forfeiture. Compensation table for reporting in Part VII, Section A, or

Schedule J (Form 990), Part II. The following table may be

$10,000-per-item exception. Except for the five items listed useful in determining how and where to report items of

above, neither the organization nor a related organization is compensation on Form 990, Part VII, Section A and on

required to report on Form 990, Part VII, Section A any item of Schedule J, (Form 990), Part II. The list is not comprehensive

but covers most items for most organizations. Many items of “other compensation” (as set forth in the table below) if its total

value is less than $10,000 for the calendar year ending with or compensation may or may not be taxable or currently taxable,

within the organization’s tax year. depending on the plan or arrangement adopted by the

organization and other circumstances. The list attempts to take

into account these varying facts and circumstances. The list is Amounts excluded under the two separate $10,000 merely a guideline to report amounts for those persons required exceptions (the $10,000-per-related-organization and to be listed. In all cases, items included on Form W-2, box 5 $10,000-per-item exceptions) are to be excluded from and Form 1099-MISC, box 7 are required to be reported on Part compensation in determining whether an individual’s total VII, Section A and, for applicable persons, Schedule J, (Form reportable compensation and other compensation exceeds 990), Part II, column B. the thresholds set forth on Form 990, Part VII, Section A, line 4.

If the individual’s total compensation exceeds the relevant

threshold, then the amounts excluded under the $10,000

exceptions are included in the individual’s compensation

reported on Schedule J (Form 990). Thus, the total amount of

compensation reported on Schedule J (Form 990) may be

higher than the amount reported on Form 990, Part VII, Section

A. The $10,000-per-item exception applies separately with

respect to each item of other compensation from the

organization and from each related organization.

Example.

Organization X provides the following compensation to its

current officer:

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Where to Report

Form 990, Part VII, Section A, column (D) or (E) Form 990, Part VII, Section A,

Type of Compensation column (F)

Schedule J (Form Schedule J (Form Schedule J (Form Schedule J (Form Schedule J

990), Part II, 990), Part II, 990), Part II, 990), Part II, (Form 990), Part

column B(i) column B(ii) column B(iii) column C II, column D

Base salary/wages/fees paid x

Base salary/wages/fees deferred (taxable) x

Base salary/wages/fees deferred (nontaxable) x

Bonus paid (including signing bonus) x

Bonus deferred (taxable in current year) x

Bonus deferred (not taxable in current year) x

Incentive compensation paid x

Incentive compensation deferred (taxable in x

current year)

Incentive compensation deferred (not taxable in x

current year)

Severance or change of control payments x

made

Sick pay paid by employer x

Third party sick pay x

Other compensation amounts deferred (taxable x

in current year)

Other compensation amounts deferred (not x

taxable in current year)

Tax gross-ups paid x

Vacation/sick leave cashed out x

Stock options at time of grant x

Stock options at time of exercise x

Stock awards paid by taxable organizations x

substantially vested

Stock awards paid by taxable organizations not x

vested

Stock equivalents paid by taxable organizations x

substantially vested

Stock equivalents paid by taxable organizations x

not vested

Loans—forgone interest or debt forgiveness x

Contributions (employer) to qualified retirement x

plan

Contributions (employee deferrals) to section x

401(k) plan

Contributions (employee deferrals) to section x

403(b) plan

Qualified or nonqualified retirement plan x

defined benefit accruals (reasonable estimate

of increase in actuarial value)

Qualified or nonqualified retirement (defined

contribution) plan investment earnings (no

reportable or other compensation)

Taxable distributions from qualified retirement

plan (reported on Form 1099-R but not

reportable or other compensation on Form 990)

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Where to Report

Form 990, Part VII, Section A, column (D) or (E) Form 990, Part VII, Section A,

Type of Compensation column (F)

Schedule J (Form Schedule J (Form Schedule J (Form Schedule J (Form Schedule J

990), Part II, 990), Part II, 990), Part II, 990), Part II, (Form 990), Part

column B(i) column B(ii) column B(iii) column C II, column D

Distributions from nongovernmental section

457(b) plan (no reportable or other

compensation on Form 990)

Amounts includible in income under section x

457(f)

Amounts deferred (plus earnings) under x

section 457(b) plan (vested)

Amounts deferred (plus earnings) under x

section 457(b) plan (nonvested)

Contributions to nonqualified plans (vested) x

Contributions to nonqualified plans (nonvested) x

Increase in earnings of nonqualified plan x

Scholarships and fellowship grants (taxable) x

Health benefit plan premiums (taxable) x

Health benefit plan premiums (nontaxable) x

Medical reimbursement and flexible spending x

programs (taxable)

Medical reimbursement and flexible spending x

programs (nontaxable)

Other health benefits (taxable) x

Other health benefits (nontaxable) x

Life, disability, or long-term-care insurance x

(taxable)

Life, disability, or long-term-care insurance *

(nontaxable)

Split-dollar life insurance (see Notice 2002-8, x

2002-1 C.B. 398)

Housing provided by employer (taxable) x

Housing provided by employer (nontaxable) *

Personal legal services (taxable) x

Personal legal services (nontaxable) *

Personal financial services (taxable) x

Personal financial services (nontaxable) *

Dependent care assistance (taxable) x

Dependent care assistance (nontaxable) *

Adoption assistance (taxable) x

Adoption assistance (nontaxable) *

Tuition assistance for family (taxable) x

Tuition assistance for family (nontaxable) *

Cafeteria plans (taxable) x

Cafeteria plans (nontaxable health benefit) x

Cafeteria plans (nontaxable benefit other than *

health)

Liability insurance (taxable) x

Employer-provided automobile (taxable) x

Employer-subsidized parking (taxable) x

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Where to Report

Form 990, Part VII, Section A, column (D) or (E) Form 990, Part VII, Section A,

Type of Compensation column (F)

Schedule J (Form Schedule J (Form Schedule J (Form Schedule J (Form Schedule J

990), Part II, 990), Part II, 990), Part II, 990), Part II, (Form 990), Part

column B(i) column B(ii) column B(iii) column C II, column D

Travel (taxable) x

Moving (taxable) x

Meals and entertainment (taxable) x

Social club dues (taxable) x

Spending account (taxable) x

director of the organization, add the amounts reported on all Note. Items marked with asterisk “*” instead of an “x” are Forms 1099-MISC, box 7 and, if applicable, Forms W-2, box 5, excludible from Form 990, Part VII, Section A, column (F), if issued to the individual by the organization and all related below $10,000. organizations, to the extent that such amounts relate to the Line 3. Complete Schedule J (Form 990) for each of the individual’s past services as a trustee or director of the following persons. organization and not of a related organization. The • Each individual listed in Part VII, Section A, as a former $10,000-per-related-organization exception does not apply for officer, former key employee, or a former highest this purpose. compensated employee. To determine whether an individual

received more than $100,000 in reportable compensation in Line 4. Complete Schedule J (Form 990) for each individual

the aggregate from the organization and related listed in Section A who received or accrued more than

organizations, add the amounts reported on all Forms W-2, $150,000 of reportable and other compensation from the

box 5 and Forms 1099-MISC, box 7 issued to the individual by organization and related organizations. To determine whether the organization and all related organizations (disregarding any listed individual received or accrued more than $150,000 of amounts from a related organization if below $10,000) for the reportable and other compensation, add all compensation

calendar year ending with or within the organization’s tax year. included in Part VII, Section A, columns (D), (E), and (F). • Each individual that received, solely in the capacity as a

former director or former trustee of the organization, more The following chart explains which officers, directors,

than $10,000 of reportable compensation (Part VII, Section A, trustees, key employees, and highest compensated

columns (D) and (E)) during the year from the organization or employees must be reported on Form 990, Part VII, Section A,

related organizations. To determine whether an individual and on Schedule J (Form 990), as well. See also line 5 for

received or accrued more than $10,000 in reportable additional individuals who must be reported on Schedule J,

compensation solely in the capacity as a former trustee or (Form 990), Part II.

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Matrix for Part VII, Section A, Lines 3 and 4

List on Form 990, Part VII, List on Schedule J (Form 990),

Position Current or former Section A . . . Part II . . .

If reportable and other

compensation > $150,000 in the

Current All aggregate from organization and

related organizations (do not report

institutional trustees)

Directors and Trustees

If reportable compensation in

capacity as former director or If listed on Form 990, Part VII,

Former trustee > $10,000 in the aggregate Section A (do not report institutional

from organization and related trustees)

organizations

If reportable and other

compensation > $150,000 in the Current All aggregate from organization and

related organizations Officers

If reportable compensation >

$100,000 in the aggregate from If listed on Form 990, Part VII, Former organization and related Section A

organizations

Current All All

If reportable compensation > Key employees $100,000 in the aggregate from If listed on Form 990, Part VII, Former organization and related Section A

organizations

If reportable compensation > If reportable and other

$100,000 in the aggregate from compensation > $150,000 in the Current organization and related aggregate from organization and

Other Five Highest Compensated organizations related organizations

Employees If reportable compensation >

$100,000 in the aggregate from If listed on Form 990, Part VII, Former organization and related Section A

organizations

Line 5. Complete Schedule J (Form 990) for any individual organization does not treat the payments as a charitable

listed on Form 990, Part VII, Section A if the person receives or contribution to the filing organization.

accrues compensation from an unrelated organization for

services rendered to the filing organization in the person’s Example 1. A is the CEO (and the top management capacity as an officer, director, trustee, or employee of the official) of the organization. In addition to compensation paid filing organization. Also, specify on Schedule J (Form 990), Part by the organization to A, A receives payments from B, an III, the name of the unrelated organization, the type and amount unrelated corporation (using the definition of relatedness on of compensation it paid or accrued, and the person receiving or Schedule R (Form 990)), for services provided by A to the accruing such compensation. The organization must report as organization. B also makes rent payments for A’s personal compensation amounts received or accrued by the person from residence. The organization is aware of the compensation the unrelated organization for services rendered to the arrangement between A and B, and does not treat the organization, whether the unrelated organization treats the payments as paid by the organization for Form W-2 reporting amounts as compensation, grants, or otherwise. The purposes. A, as the top management official of the organization, organization is required to report compensation from an must be listed as an officer of the organization in Part VII, unrelated organization only if it has knowledge of the Section A. However, the amounts paid by B to A require that compensation arrangement. the organization answer “Yes” on line 5 and complete Schedule

The compensation from the unrelated organization for J (Form 990) with respect to A.

services provided to the filing organization must be reported as Example 2. C is an attorney employed by a law firm that is compensation from the filing organization both on Form 990,

Part VII and on Schedule J (Form 990), Part II. The amounts not a related organization with respect to the organization. The

organization and the law firm enter into an arrangement where from the unrelated organization must be taken into account in C serves the organization, a section 501(c)(3) legal aid society determining whether the dollar thresholds are met for reporting pro bono, on a full-time basis as its vice-president and as a such persons on Form 990, Part VII, Section A. board member while continuing to receive her regular For purposes of line 5, disregard: compensation from the law firm. The organization does not

1. Payments from a deferred compensation trust or plan provide any compensation to C for the services provided by C

established, sponsored, or maintained by the organization (or a to the organization, and does not report C’s compensation on

related organization), and deferred compensation held by such Form W-2 or Form 1099-MISC. The law firm does not treat any

trust or plan; part of C’s compensation as a charitable contribution to the

2. Payments from a common paymaster for services legal aid society. Under these circumstances, the amounts paid

provided to the organization (or to a related organization); or by the law firm to C do not require that the organization answer

3. Payments from an unrelated taxable organization that “Yes” on line 5, with respect to C. Also, nothing in these facts

employs the individual and continues to pay the individual’s would prevent C from qualifying as an independent member of

regular compensation while the individual provides services the organization’s governing body for purposes of Form 990,

without charge to the filing organization, but only if the unrelated Part VI, line 1b.

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Example 3. D, a volunteer director of the organization, is such revenue include receipts from the sale of donated

also the sole owner and CEO of M management company (an merchandise, interest (unless debt-financed), and receipts from

unrelated organization), which provides management services bingo games.

to the organization. The organization pays M an annual fee of Line 1. In General $150,000 for management services. Under the circumstances,

the amounts paid by M to D (in the capacity as owner and CEO

of M) do not require that the organization answer “Yes” on line On lines 1a through 1f, report cash and non-cash amounts

5, with respect to D. However, the organization must report the received as voluntary contributions, gifts, grants or other

transaction with M, including the relationship between D and M, similar amounts from the general public, governmental units, on Schedule L, (Form 990 or 990-EZ), Part IV. Also, D does not foundations, and other exempt organizations. The general

qualify as an independent member of the organization’s public includes individuals, corporations, trusts, estates, and

governing body because D receives indirect financial benefits other entities. Voluntary contributions are payments, or the part

from the organization through M that are reportable on of any payment, for which the payer (donor) does not receive

Schedule L (Form 990 or 990-EZ), Part IV. full retail value (fair market value) from the recipient (donee)

organization. Contributions are reported on line 1 regardless of Section B. Five Highest Compensated whether they are deductible by the contributor. The non-cash Independent Contractors portion of contributions reported on lines 1a through 1f is also Complete this table for the five highest compensated reported on line 1g.

independent contractors that received more than $100,000 in Report gross amounts of contributions collected in the compensation for services, whether professional or other organization’s name by fundraisers. services, from the organization. Independent contractors Report all expenses of raising contributions in Part IX, include organizations as well as individuals and may include column (D), Fundraising Expenses. The organization must professional fundraisers, law firms, accounting firms, publishing show on line 11e fees for professional fundraising services companies, management companies, and investment

management companies. See Pub. 1779, Independent relating to the gross amounts of contributions collected in the

Contractor or Employee, and Pub. 15-A, Employer’s organization’s name by professional fundraisers.

Supplemental Tax Guide, for distinguishing employees from Report the value of non-cash contributions at the time of

independent contractors. the donation. For example, report the fair market value of a

Column (C). Enter the amount the organization paid, whether donated car at the time the car was received as a donation.

reported on Form 1099-MISC, box 7 or paid pursuant to the Reporting line 1 in accordance with SFAS 116 is acceptable

parties’ agreement or applicable state law, for the calendar year for Form 990 purposes, but not required by IRS. An

ending with or within the organization’s tax year. organization that receives a grant to be paid in future years

Compensation includes fees and similar payments to should, according to SFAS 116, report the grant’s present value

independent contractors but not reimbursement of expenses. on line 1. Accruals of present value increments to the unpaid

However, for this purpose, the organization must report gross grant should be reported on line 1 in future years.

payments to the independent contractor that include Contributions do not include:

expenses and fees if the expenses are not separately reported • Grants, fees or other support from governmental units, to the organization. foundations or other exempt organizations that represent a

payment for a service, facility, or product that primarily gives Form 1099-MISC is not always required to be issued for some economic or physical benefit to the payer. payments to an independent contractor. • The portion of any fundraising solicitation representing TIP

payment for goods, services, or anything else at retail value.

• Donations of services or of use of materials, equipment, or Part VIII. Statement of Revenue facilities.

Column (A). • Unreimbursed expenses of officers, employees, or

All organizations must complete column (A), Total Revenue volunteers. (See the explanations of charitable contributions , and employee business expenses in Pub. 526 and Pub. 463, reporting their gross receipts for all sources of revenue. All

respectively.) organizations (except section 527 political organizations) must • Payments received from employers for welfare benefits under complete columns (B) through (D). Refer to specific instructions plans described in sections 501(c)(9), (17), and (18). Report below for completing each column. these amounts on line 2, Program Service Revenue. If the organization enters an amount in column (A) for Line 1a. Enter on line 1a the total amount of contributions lines 2a through 2e or lines 11a through 11c, it must received indirectly from the public through solicitation also enter a business code for each line from the Codes

TIP

campaigns conducted by federated fundraising agencies and for Unrelated Business Activity in the 2008 Instructions for Form similar fundraising organizations (such as from a United Way 990-T. If none of the listed codes accurately describe the organization). Federated fundraising agencies normally conduct activity, enter “900099.” Use of these codes does not imply that fundraising campaigns within a single metropolitan area or the business activity is unrelated to the organization’s exempt some part of a particular state, and allocate part of the net purpose. proceeds to each participating organization on the basis of the Column (B). donors’ individual designations and other factors. In column (B), report all revenue from activities substantially Federated fundraising agencies must, like all other filers, related to the organization’s exempt purpose. Also report here

any revenue that is excludable from gross income other than by identify the sources of contributions made to them on

lines 1a through 1g.

TIP

section 512, 513, or 514, such as interest on state and local

bonds that is excluded from tax by section 103. Line 1b. Report on line 1b membership dues and

Column (C). assessments that represent contributions from the public

In column (C), report any unrelated business revenue rather than payments for benefits received or payments from

received by the organization during the tax year from an affiliated organizations.

unrelated trade or business. See Pub. 598, Tax on Unrelated Example. M is an organization whose primary purpose is to Business Income of Exempt Organizations, and Instructions for support the local symphony orchestra. Members have the Form 990–T, for more information. privilege of purchasing subscriptions to the symphony’s annual

Column (D.) concert series before they go on sale to the general public, but

In column (D), report any revenue excludable from unrelated must pay the same price as any other member of the public.

business income by section 512, 513, or 514. Examples of They also are entitled to attend a number of rehearsals each

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season without charge. Under these circumstances, M’s IV, line 29 and complete and attach Schedule M, (Form 990),

receipts from members are contributions reported on line 1b. Non-Cash Contributions.

Membership dues that are not contributions because they Non-cash contributions are anything other than cash, compare reasonably with available benefits are reported on line checks, money orders, credit card charges, wire transfers, and 2, Program Service Revenue. other transfers and deposits to a cash account of the

Membership dues may consist of both contributions and organization. Value noncash donated items, like cars and

payment for goods and services. In that case, the portion of the securities, as of the time of their receipt, even if sold

membership dues that is a payment for goods or services immediately after they were received.

should be reported on line 2, Program Service Revenue. The Example. A charity receives a gift of stock from an portion that exceeds the fair market value of the goods or unrelated donor. The stock is delivered to the charity’s broker, services provided should be reported on line 1b. who sells it on the same day and remits the sales proceeds, net

See Pub. 1771, Charitable Contributions—Substantiation of commissions, to the charity. The value of the stock at the

and Disclosure Requirements. time of the contribution must be reported on line 1f and also on

line 1g. The sale of the stock, and the related sales expenses Line 1c. Enter the total amount of contributions received (including the amount reported on lines 1f and 1g), must be from fundraising events, which includes, but is not limited to, reported on lines 7a through 7d. gaming events, dinners, auctions, and other events conducted

for the sole or primary purpose of raising funds for the Museums and other organizations that elect not to

organization’s exempt activities capitalize their collections (in accordance with SFAS

116) should not report an amount on line 1g for works

TIP

Example. An organization holds a dinner, charging $400 of art and other collection items donated to them. per person for the meal. The dinner has a retail value of $160.

A person who purchases a ticket is really purchasing the dinner For more information on non-cash contributions see the

for $160 and making a contribution of $240. The contribution of Instructions for Schedule M (Form 990).

$240, which is the difference between the buyer’s payment and Line 1h. Enter on line 1h the total of lines 1a through 1f (but the retail value of the dinner, would be reported on line 1c and not line 1g). again on line 8a (within the parentheses). The revenue received

($160 retail value of the dinner) would be reported in the The organization may also need to attach Schedule B,

right-hand column on line 8a. (Form 990, 990-EZ, or 990-PF), Schedule of

Contributors. See the instructions for Schedule B (Form

TIP

If a contributor gives more than $400, that person would be 990, 990-EZ, or 990-PF) for more information. making a larger contribution, the difference between the

dinner’s retail value of $160 and the amount actually given. Line 2. On lines 2a through 2e, enter the organization’s five

Rev. Rul. 67-246, 1967-2 C.B. 104, explains this principle in largest sources of program service revenue. Program services

detail. See also the instructions for lines 8a through 8c and Pub. are primarily those that form the basis of an organization’s

526, Charitable Contributions. exemption from tax. For a more detailed description of program

service revenue, refer to the instructions for Part IX, column (B),

Organizations that report more than $15,000 total on lines 1c Program service expenses.

and 8a must also answer “Yes” to Part IV, line 18 and complete On line 2f, enter the total received from all other sources of

Part II of Schedule G, (Form 990 or 990-EZ), Supplemental program service revenue not listed individually on lines 2a

Information Regarding Fundraising or Gaming Activities. through 2e. On line 2g, enter the total of column (A), lines 2a

through 2f. Line 1d. Report on line 1d amounts contributed to the

organization by related organizations. Do not report amounts Program service revenue. Program service revenue includes

reportable on line 1a. income earned by the organization for providing a government

agency with a service, facility, or product that benefited that Line 1e. Enter the total amount of contributions in the form of government agency directly rather than benefiting the public as grants or similar payments from local, state, or federal a whole. Program service revenue also includes tuition received government sources, as well as foreign governments. Include by a school, revenue from admissions to a concert or other grant amounts from U.S. possessions. performing arts event or to a museum; royalties received as A grant or other payment from a governmental unit is author of an educational publication distributed by a commercial reported here if its primary purpose is to enable the publisher; interest income on loans a credit union makes to its organization to provide a service to, or maintain a facility for, the members; payments received by a section 501(c)(9) direct benefit of the public rather than to serve the direct and organization from participants or employers of participants for immediate needs of the governmental unit. In other words, the health and welfare benefits coverage; insurance premiums payment is recorded on line 1e if the general public gets the received by a fraternal beneficiary society; and registration fees primary and direct benefit from the payment and any benefit to received in connection with a meeting or convention. the governmental unit is indirect and insubstantial as compared Program related investments. Program service revenue also to the public benefit. includes income from program-related investments. These The following are examples of governmental grants and investments are made primarily to accomplish an exempt

other payments that are treated as contributions and reported purpose of the investing organization rather than to produce on line 1e. income. Examples are scholarship loans and low interest loans • Payments by a governmental unit for the construction or to charitable organizations, indigents, or victims of a disaster. maintenance of library or museum facilities open to the public. Rental income from an exempt function is another example • Payments by a governmental unit to nursing homes to of program-related investment income. When an organization provide health care to their residents. rents to an unaffiliated exempt organization at less than fair • Payments by a governmental unit to child placement or child rental value for the purpose of aiding that tenant’s exempt guidance organizations under government programs to better function, the filing organization should report such rental income serve children in the community. as program service revenue on line 2. For purposes of this

Line 1f. Enter all other contributions, gifts, and similar return, report all rental income from an affiliated organization on

amounts the organization received from sources not reported line 2.

separately on lines 1(a) through 1(e). This amount includes Unrelated trade or business activities. Unrelated trade or contributions from donor-advised funds. business activities (not including any fundraising events or

Line 1g. Enter on Line 1g the amount of non-cash fundraising activities) that generate fees for services may

contributions included on lines 1a through 1f. If this amount also be program service activities. A social club, for example,

exceeds $25,000, the organization must answer “Yes” to Part should report as program service revenue the fees it charges

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both members and nonmembers for the use of its tennis courts the principal and interest (debt service) on a bond issue is not

and golf course. under the control of the organization.

Sales of inventory items by hospitals, colleges, and Line 5. Report on Line 5 royalties received by the organization universities. Books and records maintained in accordance from licensing the ongoing use of its property to others. with generally accepted accounting principles for hospitals, Typically, royalties are received for the use of intellectual colleges, and universities are more specialized than books and property, such as patents and trademarks. Royalties also records maintained according to those accounting principles for include payments to the owner of property for the right to exploit other types or organizations that file Form 990. Accordingly, natural resources on the property, such as oil, natural gas, or hospitals, colleges, and universities may report, as program minerals.

service revenue on line 2, sales of inventory items otherwise Line 6a. Enter on line 6a the rental income received for the reportable on line 10a. In that event, show the applicable cost of year from investment property. Allocate revenue to real property goods sold as program service expense in column (B) of Part and personal property in the spaces provided. Do not include IX. No other organizations should report sales of inventory on line 6a rental income related to the filing organization’s items on line 2. exempt function (program service). Report such income on line Common Types of Program Service Revenue: 2. For example, an exempt organization whose exempt purpose • Medicare/Medicaid payments, and other payments for is to provide low-rental housing to persons with low income medical services. would report that rental income as program service revenue on • Fees and contracts from government agencies for a service, line 2. facility, or product that primarily benefited the government

agencies. Rental income received from an unaffiliated exempt

organization is generally considered unrelated to the filing Example 1. A payment by a governmental agency to a organization’s exempt purpose and reportable on line 6a. medical clinic to provide vaccinations to the general public is a However, note an exception given in the instructions for line 2 contribution reported on line 1e. A payment by a governmental when the filing organization aids an unaffiliated organization agency to a medical clinic to provide vaccinations to employees with its exempt function. of the agency is program service revenue reported on line 2.

Example 2. A payment by a governmental agency to an Only for purposes of completing this return, the filing

organization to provide job training and placement for disabled organization must report any rental income received from an

individuals is a contribution reported on line 1e. A payment by a affiliated exempt organization as program service revenue on

governmental agency to the same organization to operate the line 2.

agency’s internal mail delivery system is program service Rental revenue can be from an activity that is related or revenue reported on line 2. unrelated to the organization’s exempt purpose. In general, • Income from program related investments. Report interest, rents from real property are excluded in computing unrelated

dividends, and other revenues from those investments made business income, while rental income from personal property primarily to accomplish the organization’s exempt purposes is included. There are special rules when rents are received rather than to produce income. Examples of program-related from personal property leased with real property (a mixed investments include student loans and notes receivable from lease). In general, rental revenue from real property is excluded other exempt organizations that borrowed the funds to pursue from unrelated business revenue when:

the filing organization’s exempt function. • The determination of the amount of such rents is not based • Membership dues and assessments received that compare on income or net profits derived by any person from the reasonably with the membership benefits provided by the property leased other than an amount based on a fixed organization. Organizations described in section 501(c)(5), (6), percentage of the gross receipts or sales, or (7) generally provide benefits that have a reasonable • The lease does not include personal services other than relationship with dues. customary ones such as trash removal and cleaning of public

Examples of membership benefits include: areas,

• Subscriptions to publications, • Any portion attributable to personal property is 10% or less of

• Newsletters (other than one only about the organization’s the total rent, and

activities), • The real property is not debt-financed within the meaning of

• Free or reduced-rate admissions to events sponsored by the section 512, 513, or 514. (Rent from debt-financed real property

organization, is generally includible in unrelated business income, but there

• Use of the organization’s facilities, and may be exceptions based on use of the property. See Pub.

• Discounts on articles or services that members and 598.)

nonmembers can buy Rent received from leased personal property is generally

For each amount entered on lines 2a through 2e, the taxable except when leased with real property, and the rent

organization must also enter a corresponding business attributable to the personal property does not exceed 10% of

code from Codes for Unrelated Business Activity the total rents from all leased property. CAUTION from

!

the 2008 Instructions for Form 990-T. If none of the listed codes Line 6b. Enter on Line 6b the expenses paid or incurred for accurately describe the activity, enter “900099.” Use of these the income reported on line 6a. Include interest related to rental codes does not imply that the business activity is unrelated to property and depreciation if it is recorded in the organization’s the organization’s exempt purpose. books and records. If the organization reported in line 2 any

Line 3. Enter the amount of interest income from savings and rental income reportable as program service revenue, report

temporary cash investments, dividend and interest income from any rental expense allocable to such activity in the applicable

equity and debt securities (stocks and bonds), amounts lines of Part IX, column (B).

received from payments on securities loans, as defined in Line 6c. Subtract line 6b from line 6a for both columns (i) and section 512(a)(5), as well as interest from notes and loans (ii) and enter on line 6c. Show any loss in parentheses. receivable. Do not include unrealized gains and losses on Line 6d. Add line 6c, columns (i) and (ii) and enter on line 6d. investments carried at market value.

Show any loss in parentheses. Line 4. Report all investment income actually or constructively

received from investing the proceeds of a tax-exempt bond Lines 7a through 7d. Report on lines 7a through 7c, all sales

issue, which are under the control of the organization. For this of securities in column (A). Use column (B) to report sales of

purpose, do not include any investment income received from all other types of investments (such as real estate, royalty

investing proceeds which are technically under the control of interests, or partnership interests) and all other non-inventory

the governmental issuer. For example, proceeds deposited assets (such as program-related investments and fixed assets

into a defeasance escrow which is irrevocably pledged to pay used by the organization in its related and unrelated activities.)

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On line 7a, for each column, enter the total gross sales price received should be reported as contributions on line 1f and all

of all such assets. Total the cost or other basis (less associated expenses in the appropriate lines in Part IX, column

depreciation) and selling expenses and enter the result on line (D). In such a case, no amounts would be reported on line 8.

7b. On line 7c, enter the net gain or loss. Line 8b. Report the expenses that relate directly to the On lines 7a and 7c, also report capital gains dividends, the production of the revenue portion of the fundraising activity. In organization’s share of capital gains and losses from a the line 1(c) dinner example referred to earlier, the cost of the partnership, and capital gains distributions from trusts. food and beverages served would be one of the items reported

Combine the gain or loss figures reported on line 7c, on line 8b. Indirect fundraising expenses, such as advertising,

columns (i) and (ii) and report that total on line 7d. Do not associated with raising these contributions, must be reported

include any unrealized gains or losses on securities carried at on the appropriate lines in Part IX, column (D) and not on line

market value in the books of account. 8b.

For reporting sales of securities on Form 990, the Line 8c. Report on line 8c the difference between lines 8a and

organization may use the more convenient average cost basis 8b. The organization must report net income from fundraising method to figure the organization’s gain or loss. When a events as unrelated business revenue (column (C) or as

security is sold, compare its sales price with the average cost revenue excluded from tax under sections 512, 513, or 514

basis of the particular security to determine gain or loss. (column (D)). However, for reporting sales of securities on Form 990–T, do Line 9a. Organizations that report more than $15,000 on line not use the average cost basis to determine gain or loss. 9a must also answer “Yes” to Part IV, line 19 and complete Part The organization should maintain books and records to III of Schedule G, (Form 990 or 990–EZ) , Supplemental substantiate information regarding any securities or other Information Regarding Fundraising or Gaming Activities. assets sold for which market quotations were not published or

were not otherwise readily available. The recorded information Types of gaming include, but are not limited to: should include:

• A description of the asset, - Bingo - Nevada Club tickets

• Date acquired, - Pull tabs - Casino nights

• Whether acquired by donation or purchase, - Instant bingo - Las Vegas nights

• Cost or other basis, - Raffles - Coin-operated

• Expense of sale, and gambling devices

• Depreciation. including:

- Scratch-offs • Slot machines Line 8a. If the sum of the amounts reported on lines 1c and 8a - Charitable gaming tickets • Electronic video exceeds $15,000, then the organization must answer “Yes” to slot or line games Part IV, line 18 and complete Schedule G, (Form 990 or - Break-opens • Video poker 990-EZ), Supplemental Information Regarding Fundraising or - Hard cards • Video blackjack Gaming Activities, Part II. - Banded tickets • Video keno Compute the organization’s gross income from fees, ticket - Jar tickets • Video bingo sales or other revenue from fundraising events. - Pickle cards • Video pull tab

 games Fundraising events include: Fundraising events do not

include:

• Dinners/dances, • Sales or gifts of goods or Many games of chance are taxable. Income from bingo services of only nominal value, games is not generally subject to the tax on unrelated business • Door-to-door sales of • Raffles or lotteries in which income if the games meet the legal definition of bingo. For a merchandise, prizes have only nominal value, game to meet the legal definition of bingo, wagers must be and placed, winners must be determined, and prizes or other • Concerts, • Solicitation campaigns that property must be distributed in the presence of all persons generate only contributions. placing wagers in that game. • Carnivals,

• A wagering game that does not meet the legal definition of Sports events, and bingo does not qualify for the exclusion, regardless of its name. • Auctions. Proceeds from these activities are

considered contributions and For example, instant bingo, in which a player buys a

should be reported on line 1f. pre-packaged bingo card with pull-tabs that the player removes

to determine if he or she is a winner, does not qualify. See Pub.

Fundraising events do not include events or activities that 598, Tax on Unrelated Business Income of Exempt

substantially further the organization’s exempt purpose even if Organizations and Form 990-T.

they also raise funds. Line 9b. Report on this line the expenses that relate directly to

Example. An organization formed to promote and preserve the production of the revenue portion of the gaming activity.

folk music and related cultural traditions holds an annual folk Direct expenses of gaming include: music festival featuring concerts, handcraft demonstrations, and • Cash prizes, similar activities. Because the festival directly furthers the • Noncash prizes, organization’s exempt purpose, income from ticket sales should • Compensation to bingo callers and workers, be reported on line 2 as program service revenue. • Rental of gaming equipment, and Fundraising events sometimes generate both contributions • Cost of bingo supplies such as pull tabs, etc. and income, such as when an individual pays more than the Line 9c. Report the difference between 9a and 9b. retail value for the goods or services furnished. Report in

parentheses the total amount from fundraising events that Line 10a. Report the organization’s gross income from sales represents contributions rather than payment for goods or of inventory items, less returns and allowances. Sales of services. Treat the following as contributions. inventory items reportable on line 10a are sales of those items • Amounts paid in excess of retail value of goods or service the organization makes to sell to others or buys for resale. furnished. See Example for line 1(c). Sales of inventory do not, however, include the sale of goods • Amounts from fundraising activities when items of only related to a fundraising event, which must be reported on line nominal value are given or offered. 8. Sales of investments on which the organization expected to

Example. In return for a contribution of any amount, donors profit by appreciation and sale are not reported here. Report

receive a keychain with the organization’s logo. All amounts sales of investments on line 7.

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The organization must report the sales revenue regardless Also include costs to secure a grant to conduct research,

of whether the sales activity is an exempt function of the produce an item, or perform a service, whether the activities

organization or an unrelated trade or business. were conducted to meet the grantor’s specific needs or to

benefit the public directly. Do not report these costs as Line 10b. Report the cost of goods sold related to the sales of fundraising expenses in column (D), even if the organization inventory. The usual items included in cost of goods sold are reports the grant on Part VIII, line 1, as a contribution. direct and indirect labor, materials and supplies consumed,

freight-in, and a portion of overhead expenses. Marketing and Column (C)

distribution costs are not included in the cost of goods sold but Use Column (C) to report expenses that relate to the

are reported in column (B), Program service expenses, of Part organization’s overall operations and management, rather than

IX. to fundraising activities or program services. Overall

management usually includes the salaries and expenses of the Line 10c. Report in the appropriate columns (A) through (D), organization’s chief executive officer and his or her staff, unless the net income or (loss) from the sale of inventory items. a part of their time is spent directly supervising program Line 11. Report all other types of revenue not reportable on services or fundraising activities. In that case, their salaries and lines 1 through 10. List the three largest sources on lines 11a expenses should be allocated among management, through 11c and all other revenue on line 11d. fundraising, and program services.

For each amount entered on lines 11a, 11b and 11c, the Expenses incurred to manage investments must be reported

organization must also enter a corresponding business in column (C). Lobbying expenses should be reported in this CAUTION code from Codes for Unrelated Business Activity from column if they do not directly relate to the organization’s exempt

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the 2008 Instructions for Form 990-T. If none of the listed codes purposes.

accurately describe the activity, enter “900099.” Use of these Organizations must also report the following in column (C): codes does not imply that the business activity is unrelated to costs of board of directors meetings; committee meetings, and the organization1s exempt purpose. staff meetings (unless they involve specific program services or

Line 12. For column (A), add lines 1h, 2g, 3 through 5, 6d, 7d, fundraising activities); general legal services; accounting

8c, 9c, 10c, and 11e. For columns (B) through (D), add lines 2a (including patient accounting and billing); general liability

through 2f, 3, 4, 5, 6d, 7d, 8c, 9c, 10c, and 11a through 11d. insurance; office management; auditing, human resources, and

The amounts reported on line 12 in columns (B), (C), and (D), other centralized services; preparation, publication, and

plus the amount reported on line 1h, should equal line 12, distribution of an annual report; and management of

column (A). investments.

However, report expenses related to the production of Part IX. Statement of Functional program-related income in column (B) and expenses related to

Expenses the production of rental income in Part VIII, on line 6b. Rental

expenses incurred for the organization’s office space or Use the organization’s normal accounting method to complete facilities are reported on line 16. this section. If the organization’s accounting system does not Do not use this column to report costs of special meetings or allocate expenses, the organization may use any reasonable

method of allocation. The organization must report amounts other activities that relate to fundraising or specific program

services. accurately and document the method of allocation in its records.

Do not report in Part IX expenses that must be reported on lines Column (D)

6b, 7b, 8b, 9b, or 10b in Part VIII. Fundraising expenses are the expenses incurred in soliciting

Column (A) contributions, gifts, and grants. Report as fundraising

Section 501(c)(3) and section 501(c)(4) organizations as well as expenses all expenses, including allocable overhead costs,

incurred in: (a) publicizing and conducting fundraising section 4947(a)(1) nonexempt charitable trusts must complete

columns (A) through (D). campaigns; and (b) soliciting bequests and grants from

foundations or other organizations, or government grants All other organizations must complete column (A) but may reportable on line 1, in Part VIII. This includes participating in complete columns (B), (C), and (D). federated fundraising campaigns; preparing and distributing

fundraising manuals, instructions, and other materials; and State reporting requirements may be different from IRS conducting fundraising events that generate contributions reporting requirements applicable to Part IX. reportable in Part VIII, line 1c, or revenue reportable on Part CAUTION

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VIII, on line 8a.

Column (B) Example. For an employee who works on fundraising 40 Program services are mainly those activities that further the percent of the time and program management 60 percent of the organization’s exempt purposes. Fundraising expenses should time, an organization must allocate that employee’s salary 40 not be reported as program-service expenses even though one percent to fundraising and 60 percent to program service of the organization’s purposes is to solicit contributions. expenses. It may not report the 100 percent of salary as

Include lobbying expenses in this column if the lobbying is program expenses simply because the employee spent over 50

directly related to the organization’s exempt purposes. percent of his time on program management.

Example. Foundation M, an organization exempt under

section 501(c)(3), has the exempt purpose of improving health Allocating Indirect Expenses

care for senior citizens. Foundation M operates in State N. The Direct costs are expenses that can be identified specifically with

legislature of State N is considering legislation to improve an organization’s activity or project, and can be assigned to an

funding of health care for senior citizens. Foundation M lobbies activity or project with a high degree of accuracy. Indirect costs

state legislators in support of the legislation. Since this lobbying are costs that cannot be identified specifically with an activity or

is directly related to Foundation M’s exempt purpose, it would project. For example, a computer bought by a university

be considered an exempt function expense, and would be specifically for a research project is a direct cost. In contrast,

included under Column (B). the costs of software licensing for programs that run on all the

university’s computers are indirect costs. Program services can also include the organization’s

unrelated trade or business activities. Publishing a magazine Colleges, universities, hospitals, and other organizations that

is a program service even though the magazine contains both incur indirect expenses in various cost centers (such as

editorials and articles that further the organization’s exempt organizational memberships, books and subscriptions, and

purpose as well as advertising, the income from which is regular telecommunications costs) may allocate and report such

taxable as unrelated business income. expenses in the following manner:

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1. Report the expenses of all indirect cost centers in column cost center, $10,000 was allocable to fundraising; $70,000 to

(C) of lines 5 through 24. various program services; $15,000 to management and general

2. As a separate line item of line 24, enter “Allocation of functions; and $5,000 to special events and activities. To report

[name of indirect cost center] expenses.” this in Part IX under this optional method:

a. If any of the cost center’s expenses are allocated to 1. Indicate the cost center, the expenses of which are being

expenses listed in Part VIII such as the expenses attributable to allocated, on line 24, as “Allocation of [specify the indirect cost

fundraising events and activities, enter such expenses as a center] expenses;”

negative figure in columns (A) and (C). 2. Enter a decrease of $5,000 on the same line in the b. Allocate expenses to column (B) or (D) as positive column (A), Total expenses, representing the fundraising event amounts. expenses that were already reported in Part VIII, on line 8b; c. Add the amounts in columns (B) and (D) and enter the

sum as a negative offsetting amount in column (C). Do not 3. Enter $70,000 on the same line in column (B), Program

make any entries in column (A) for these offsetting entries. service expenses;

4. Enter $10,000 on the same line in column (D), Example. An organization reports in column (C) $50,000 of Fundraising expenses; and its actual management and general expenses and $100,000 of 5. Enter a decrease of $85,000 on the same line in column expenses of an indirect cost center that are allocable in part to (C), Management and general expenses, to represent the other functions. The total of lines 5 through 24 of column (C) allocations to functional areas other than management and would be $150,000 before the indirect cost center allocations general. were made. Assume that of the $100,000 total expenses of the

Line (A) (B) (C) (D)

5–24a $150,000 - $150,000 -

24b Allocation of $100,000 indirect cost center expenses (5,000) 70,000 (85,000) 10,000

reported in (C)

25 $145,000 $70,000 $65,000 $10,000

After making these allocations, the column (C) total, functional If line 1 exceeds $5,000, the organization must complete

expenses, (line 25, column (C)) would be $65,000, consisting of Parts I and II of Schedule I, (Form 990), Grants and Other

the $50,000 actual management and general expense amount Assistance to Organizations, Governments and Individuals in

and the $15,000 allocation of the aggregate cost center the U.S.

expenses to management and general. Line 2. Enter the amount paid by the organization to

The above is an example of a one-step allocation that shows individuals in the United States in the form of scholarships,

how to report the allocation in Part IX. This reporting method fellowships, stipends, research grants, and similar payments

would actually be more useful to avoid multiple-step allocations and distributions.

involving two or more cost centers. Without this optional Also include grants and other assistance paid to third party reporting method, the total expenses of the first cost center providers for the benefit of specified individuals. For example, a would be allocated to the other functions, and might include an grant payment to a hospital to cover the medical expenses of a allocation of part of these expenses to another cost center. The particular patient must be reported on line 2. By comparison, a expenses of the second cost center would then be allocated to grant to the same hospital to provide services to the general other functions and, perhaps, to other cost centers, and so on. public or to unspecified charity patients must be reported on line The greater the number of these cost centers that are allocated 1. out, the more difficult it is to preserve the object classification

identity of the expenses of each cost center (for example, If line 2 exceeds $5,000, the organization must complete

salaries, interest, supplies, etc.). Using the reporting method Parts I and III of Schedule I (Form 990).

described above avoids this problem. Line 3. The organization must enter the total amount of grants

The intent of the above instructions is only to facilitate and other assistance made to foreign governments, foreign

reporting indirect expenses by both object classification organizations, and foreign individuals outside the United

CAUTION and function. These instructions do not authorize the States. !

allocation to other functions of expenses that should be If line 3 exceeds $5,000, the organization may have to reported as management and general expenses. complete Parts II and/or Part III of Schedule F, (Form 990),

Grants and other Assistance to Governments, Statement of Activities Outside the United States. See

Organizations and Individuals. Organizations should report instructions for Schedule F for more information.

the amount of grants and other assistance on lines 1 through Line 4. Enter the payments made by the organization to 3. Report expenses incurred in selecting recipients or provide benefits to members (such as payments made by an monitoring compliance with the terms of a grant or award on organization exempt under sections 501(c)(8), 501(c)(9), or lines 5 through 24. See the following instructions. 501(c)(17) to obtain insurance benefits for members). Do not

Note. Organizations may report this information in accordance report on this line the cost of employment-related benefits such

with Statement of Financial Accounting Standards (SFAS 116) as health insurance, life insurance, or disability insurance

but are not required to do so. For example, an organization that provided by the organization to its officers and employees.

follows SFAS 116 and makes a grant during the tax year to be Report those expenses on lines 8 and 9.

paid in future years should report the grant’s present value on Line 5. Enter the total compensation paid to current officers, this year’s Form 990 and report accruals of additional value directors, trustees, and key employees for the tax year. increments in future years. Compensation includes all forms of income and other benefits

Line 1. Enter the amount that the organization, at its own earned or received in return for services rendered, including

discretion, paid in grants to governmental units and other pension plan contributions and other employee benefits, but

organizations in the United States. United Way and similar does not include non-compensatory expense reimbursements

federated fundraising organizations should report grants to or allowances. Report all compensation amounts relating to

member or participating agencies on line 1. Organizations must such an individual, including those related to services

report voluntary grants to state or local affiliates for specific performed in a capacity other than as an officer, director,

(restricted) purposes or projects on line 1. trustee, or key employee.

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Compensation for Part IX is to be reported based on Security and Medicare taxes. Such withheld amounts are

the accounting method and reporting period used by the reported as compensation.

organization, rather than the definitions and calendar

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Line 11. Fees for services paid to non-employees year used to complete Part VII or Schedule J (Form 990) (independent contractors). Enter on lines 11a through 11g regarding compensation of certain officers, directors, trustees amounts for services provided by independent contractors for and other employees. management, legal, accounting, lobbying, professional

Note. To the extent the following examples discuss allocation fundraising services, investment management, and other

of expenses in columns B, C, and D, they apply only to filers services, respectively. Include amounts regardless of whether a

required to complete those columns. Form 1099 was issued to the independent contractor. Do not

include on line 11 amounts paid to or earned by employees for Example 1. Key Employee A spent 90% of her time these types of services, which must be reported on lines 5 administering a program that constitutes the basis of the through 7. organization1s exempt purpose and 10% of her time in the

general management of the organization itself. Allocate 90% of Line 11a. Management fees. Enter the total fees charged for

key employee A1s compensation to column (B), and 10% to management services provided by outside firms and

column (C). individuals.

Example 2. Director B is not paid as a member of the Line 11b. Legal fees. Enter the total legal fees charged by

board, but is employed and compensated by the organization outside firms and individuals. Do not include any penalties,

as a part-time fundraiser. Allocate 100% of Director B1s fines, settlements or judgments imposed against the

compensation to column (D), fundraising. organization as a result of legal proceedings. Report those

Example 3. Key Employee C receives $100,000 of salaries expenses on line 24, Other expenses. Report any amounts for

and wages. In addition, the organization paid $25,000 of fringe lobbying services provided by attorneys on line 11d.

benefits, $10,000 of non-compensatory travel reimbursements, Line 11c. Accounting fees. Enter the total accounting and and $7,500 of pension plan contributions relating to key auditing fees charged by outside firms and individuals. employee C. The organization reports $132,500 as Line 11d. Lobbying fees. Enter amounts for activities compensation on line 5 and reports the $10,000 of expense intended to influence foreign, national, state, or local legislation, reimbursements on line 17. including direct lobbying and grassroots lobbying. Do not Line 6. Sections 501(c)(3) and 501(c)(4) organizations must include activities to influence actions by executive, judicial, or report the total compensation and other distributions provided administrative officials or bodies, or other advocacy services. to disqualified persons and persons described under section Report these amounts on line 11g. 4958(c)(3)(B) not included on line 5. Line 11e. Professional fundraising fees. Enter amounts paid Compensation includes all forms of income and other for professional fundraising services, including solicitation benefits earned or received in return for services rendered, campaigns and advice or other consulting services supporting including pension plan contributions and other employee in-house fundraising campaigns. If the organization is able to benefits, but does not include non-compensatory expense distinguish between fees paid for professional fundraising reimbursements or allowances. services and amounts paid for fundraising expenses such as Line 7. Enter the total amount of employee salaries, wages, printing, paper, envelopes, postage, mailing list rental, and fees, bonuses, severance payments, and similar amounts not equipment rental, then fees paid for professional fundraising reported on lines 5 or 6. services should be reported on line 11e and amounts paid for

Line 8. Enter the employer’s share of contributions to qualified fundraising expenses should be reported on line 24 as other

and nonqualified pension plans for the year. The organization expenses. If the organization is unable to distinguish between

should include contributions made to sections 401(k) and these amounts, it should report all such fees and amounts on

403(b) pension plans on behalf of employees line 11e. . However, it

should not include contributions to qualified pension, Line 11f. Investment management fees. Enter amounts for

profit-sharing, and stock bonus plans under section 401(a) investment counseling and portfolio management. Monthly solely for the benefit of current or former officers, directors, account service fees are considered portfolio management trustees, or key employees that are reportable on lines 5 or 6. expenses, and must be reported here. Do not include

Complete Form 5500, Annual Return/Report of transaction costs such as brokerage fees and commissions,

which are considered sales expenses and are included on Part Employee Benefit Plan, for the organization’s plan and VIII, line 7b. file it as a separate return. If the organization has more

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than one pension plan, complete a Form 5500 for each plan. Line 11g. Other fees for services. Enter amounts for other

File the form by the last day of the 7th month after the plan year independent contractor services not listed on lines 11a

ends. through 11f. For example, amounts paid to an independent

Line 9. Other employee benefits. Enter the organization’s contractor for advocacy services that do not constitute lobbying

contributions to employee benefit programs (such as insurance, should be reported here. For health care organizations,

health, and welfare programs that are not an incidental part of a payments to health care professionals who are independent

pension plan included on line 8), and the cost of other contractors are reported on line 11g.

employee benefits. Line 12. Advertising expenses. Enter amounts paid for

For example, report expenses for employee events such as advertising. Include amounts for print and electronic media

a picnic or holiday party on line 9. Do not include contributions advertising. Also include Internet site link costs, signage costs,

on behalf of current or former officers, directors, trustees, and advertising costs for the organization’s in-house fundraising

key employees or other persons that were included on lines 5 campaigns. Do not include fees paid to independent

or 6. contractors for conducting professional fundraising services

or campaigns (these amounts must be reported on line 11e). Line 10. Payroll taxes. Enter the amount of federal, state, and

local payroll taxes for the year but only those taxes that are Line 13. Office expenses. Enter amounts for supplies (office,

imposed on the organization as an employer. This includes the classroom, medical, or other supplies); telephone (cell phones

employer’s share of Social Security and Medicare taxes, the and landlines) and facsimile; postage (overnight delivery, parcel

federal unemployment tax (FUTA), state unemployment delivery, trucking, and other delivery expenses) and mailing

compensation taxes, and other state and local payroll taxes. Do expenses; shipping materials; equipment rental; bank fees and

not include on line 10 taxes withheld from employees’ salaries other similar costs. Also include printing costs of a general

and paid to various governmental units such as federal, state, nature. Printing costs that relate to conferences or conventions

and local income taxes and the employees’ shares of Social must be reported on line 19.

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Line 14. Information technology. Enter amounts for Line 21. Payments to affiliates. Enter certain types of

information technology, including hardware, software, and payments to organizations affiliated with (closely related to) the

support services, such as maintenance, help desk, and other filing organization.

technical support services. Also include expenses for Payments to affiliated state or national organizations. infrastructure support, such as web site design and operations, Dues paid by a local organization to its affiliated state or and virus protection and other information security programs national (parent) organization are reported on line 21. Report on and services to keep the organization’s web site operational this line predetermined quota support and dues (excluding and secured against unauthorized and unwarranted intrusions. membership dues of the type described later) by local agencies

Line 15. Royalties. Enter amounts for royalties, license fees to their state or national organizations for unspecified purposes;

and similar amounts that allow the organization to use that is, general use of funds for the national organization’s own

program and support services. intellectual property such as patents and copyrights.

Purchases from affiliates. Purchases of goods or services Line 16. Occupancy. Enter amounts for the use of office from affiliates are not reported on line 21 but are reported as space or other facilities, including rent, heat, light, power, and expenses in the usual manner. other utilities expenses; property insurance; real estate taxes;

mortgage interest; and similar occupancy-related expenses. Do Expenses for providing goods or services to affiliates.

not include expenses reportable as office expenses such as In addition to payments made directly to affiliated organizations,

telephone expenses, on line 13. expenses for providing goods or services to affiliates may be

reported on line 21 if: Do not net any rental income received from leasing or • The goods or services provided are not related to the subletting rented space against the amount reported on line 16 program services conducted by the organization furnishing for occupancy expenses. If the tenant’s activities are related to them (for example, when a local organization incurs expenses the organization’s exempt purpose, report rental income as in the production of a solicitation film for the state or national program-service revenue on Part VIII, line 2, and allocable organization); and occupancy expenses on this line 16. However, if the tenant’s • The costs involved are not connected with the management activities are not program-related, report the rental income on and general or fundraising functions of the filing organization. Part VIII, line 6a, and related rental expenses on Part VIII, line For example, when a local organization gives a copy of its 6b. mailing list to the state or national organization, the expense of

Do not include employee salaries or depreciation as preparing the copy provided may be reported on line 21, but not

occupancy expenses. These expenses are reported on lines 5 the expenses of preparing and maintaining the local

through 7 and 22, respectively. organization’s master list.

Line 17. Travel. Enter the total travel expenses, including Federated fundraising agencies. Federated fundraising

transportation costs (fares, mileage allowances, and automobile agencies should include in their own support, and report in Part

expenses), meals and lodging, and per diem payments. Travel VIII, line 1, the full amount of contributions received in

costs include the expenses of purchasing, leasing, operating, connection with a solicitation campaign they conduct, even

and repairing any vehicles owned by the organization and used though donors designate specific agencies to receive part or all

for the organization’s activities. However, if the organization of their individual contributions. These fundraising agencies

leases vehicles on behalf of its executives or other employees must report the allocations to participating agencies as grants

as part of an executive or employee compensation program, the and allocations on line 1, and quota support payments to their

leasing costs are considered employee compensation, and are state or national organization as payments to affiliates on line

reported on lines 5 through 7. 21.

Line 18. Payments of travel or entertainment expenses for Voluntary awards or grants to affiliates. Do not report on

any federal, state or local public officials. Enter total line 21 voluntary awards or grants made by the organization to

amounts for travel or entertainment expenses (including its state or national organizations for specified purposes.

reimbursement for such costs) for any federal, state or local Membership dues paid to other organizations. Report

public officials (as determined under section 4946(c)) and their membership dues paid to obtain general membership benefits

family members (as determined under 4946(d)). Report from other organizations, such as regular services, publications,

amounts for a particular public official only if aggregate and other materials, on line 24. This is the case if a charitable

expenditures for the year relating to such official (including organization pays dues to a trade association comprised of

family members of such official), exceed $1,000 for the year. otherwise unrelated members.

For expenditures that are not specifically identifiable to a Properly distinguishing between payments to affiliates particular individual, the organization may use any reasonable and grants and allocations is especially important if the allocation method to estimate the cost of the expenditure to an organization uses Form 990 for state reporting

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individual. Amounts not described above may be included in the purposes. If the organization uses Form 990 only for reporting reported total amount for line 18 or may be reported on line 24. to the IRS, payments to affiliated or national organizations that The organization is responsible for keeping records of all travel do not represent membership dues reportable as miscellaneous and entertainment expenses related to a government official expenses on line 24 may be reported either on line 21 or line 1. regardless of whether the expenses are reported on line 18 or Line 22. Depreciation, depletion, and amortization. If the line 24. organization records depreciation, depletion, amortization, or Line 19. Conferences, Conventions, and Meetings. Enter similar expenses, enter the total on line 22. Include any the total expenses incurred by the organization in conducting depreciation or amortization of leasehold improvements and meetings related to its activities. Include such expenses as intangible assets. An organization is not required to use the facility rentals, speakers’ fees and expenses, and printed Modified Accelerated Cost Recovery System (MACRS) to materials. Include the registration fees (but not travel expenses) compute depreciation reported on Form 990. For an paid for sending any of the organization’s staff to conferences, explanation of acceptable methods for computing depreciation conventions, and meetings conducted by other organizations. see Pub. 946, How to Depreciate Property. If an amount is Travel expenses incurred by officers, directors, and reported on this line, the organization is required to maintain employees attending such conferences, conventions and books and records to substantiate any amount reported. meetings must be reported on line 17. Line 23. Insurance. Enter total insurance expenses other than

Line 20. Interest. Enter the total interest expense for the year. insurance attributable to rental property (reported on Part VIII,

Do not include any interest attributable to rental property line 6b). Do not report on this line payments made by

(reported on Part VIII, line 6b) or any mortgage interest organizations exempt under sections 501(c)(8), (9), or (17) to

(reported as an occupancy expense on line 16). obtain insurance benefits for members. Report those expenses

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on line 4. Do not report on this line the cost of Line 1. Cash (non-interest bearing). Enter the total funds

employment-related benefits such as health insurance, life that the organization has in cash, including amounts held as

insurance, or disability insurance provided by the organization “petty cash” at its offices or other facilities, and amounts held in

to its officers and employees. Report those expenses on lines banks in non-interest bearing accounts. Do not include cash

8 and 9. Do not report on this line property or balances held in an investment account with a financial

occupancy-related insurance. Report those expenses on line institution and reported on lines 11 through 13.

16. Line 2. Savings and temporary cash investments. Enter the

Line 24. Other expenses. Enter the types and amounts of combined total of amount held in interest-bearing checking and

miscellaneous expenses which were not reportable on lines 1 savings accounts, deposits in transit, temporary cash

through 23. Include payments by the organization to investments (such as money market funds, commercial paper,

professional fundraisers of fundraising expenses such as and certificates of deposit), and U.S. Treasury bills or other

printing, paper, envelopes, postage, mailing list rental, and governmental obligations that mature in less than a year. Do

equipment rental, if the organization is able to distinguish these not include cash balances held in an investment account with a

expense amounts from fees for professional fundraising financial institution and reported on lines 11 through 13. Do not

services reportable on line 11e. Enter the 5 largest dollar include advances to employees or officers or refundable

amounts on lines 24a through 24e and the total of all remaining deposits paid to suppliers or other independent contractors.

expenses on line 24f. However, the organization must Report the income from these investments on Part VIII, line 3.

separately report the amount, if any, of unrelated business Line 3. Pledges and grants receivable, Net. Enter the total

income taxes on line 24. If lines 24a through 24e contain an of (a) all pledges receivable, less any amounts estimated to be amount labeled “other expenses” or “miscellaneous expenses” uncollectible, including pledges made by officers, directors, or something similar, the amount reported cannot exceed 5% of trustees, or other related parties, and (b) all grants receivable. the total expenses reported on line 25. Organizations that follow Statement of Financial Accounting Line 25. Total functional expenses. Section 501(c)(3) and Standards (SFAS) 116 may report the present value of the section 501(c)(4) organizations and section 4947(a)(1) grants receivable as of each balance sheet date. nonexempt charitable trusts: Add lines 1 through 24f and Line 4. Accounts Receivable, Net. Enter the organization’s enter the totals on line 25 in columns (A), (B), (C), and (D). total accounts receivable (reduced by any allowance for All other organizations: Add lines 1 through 24f and enter doubtful accounts) from the sale of goods and the performance the total on line 25 in column (A). of services. Report claims against vendors or refundable

Line 26. Joint Costs. Organizations that included in program deposits with suppliers or others here, if not significant in

service expenses (column (B) of Part IX) any joint costs from a amount. Otherwise, report them on line 15, Other assets.

combined educational campaign and fundraising solicitation Report the net amount of all receivables due from officers,

must disclose how the total joint costs of all such combined directors, trustees, or key employees on line 5. Report

activities were reported in Part IX. receivables (including loans and advances) due from other

disqualified persons on line 6. Receivables (including loans and Organizations checking the box in line 26 must furnish the advances) from employees who are not current or former relevant financial data in the spaces provided. Any costs officers, directors, trustees, key employees, or disqualified provided here are not to be deducted from the other lines in persons must be reported on Line 7. Part IX on which they are reported. Line 5. Receivables from current officers, directors, An organization conducts a combined educational campaign trustees, key employees. Report all receivables due from and fundraising solicitation when it solicits contributions (by current or former officers, directors, trustees, key mail, telephone, broadcast media, or any other means) and employees, highest compensated employees, and other includes, with the solicitation, educational material or other related parties. The receivables reportable here include all information that furthers a bona fide non-fundraising exempt secured and unsecured loans made to such persons. Do not purpose of the organization. report pledges from such persons which are to be reported in Expenses attributable to providing information regarding the line 3. For credit unions, include here only loans or other organization itself, its use of past contributions, or its planned receivables that are not made on the same terms as to other

use of contributions received are fundraising expenses and members of the organization. Report interest from such must be reported in column (D). Do not report such expenses receivables on Part VIII, line 11. as program service expenses in column (B). The organization that reports such receivables on this line Any method of allocating joint costs between columns (B) may need to answer “Yes” to Part IV, line 26 and complete and (D) must be reasonable under the facts and circumstances Schedule L, (Form 990), Loans to Interested Persons, Part II. of each case. Most states with reporting requirements for See the Instructions for Schedule L, Part II.

charitable organizations and other organizations that solicit Line 6. Receivables from Other Disqualified Persons. contributions either require or allow reporting of joint costs Section 501(c)(3) and section 501(c)(4) organizations report the under AICPA Statement of Position 98-2 (SOP 98-2). receivables due from disqualified persons (as defined under

section 4958(f)(1)) and persons described in section Part X. Balance Sheet 4958(c)(3)(B). Do not include on line 6 amounts reported on line

All organizations must complete Part X and may not submit a 5. The organization may need to answer “Yes” to Part IV, line

substitute balance sheet. All references to Schedule D (Form 26 and complete Schedule L, (Form 990), Part II.

990) are to Schedule D (Form 990), Supplemental Financial Line 7. Notes and loans receivable, Net. Enter the net Statements. amount of all notes receivable and loans receivable not listed

Column (A). Beginning of Year on lines 5 and 6, including receivables from unrelated third

In column (A), enter the amount from the preceding year’s Form parties. The term “unrelated third parties” includes

990, column (B). If the organization was excepted from filing independent contractors providing goods or services and

Form 990 for the preceding year, enter amounts the employees who are not current or former officers, directors,

organization would have entered in column (B) for that year. If trustees, key employees, highest compensated employees

this is the organization’s first year of existence, enter zeros on or disqualified persons. Do not include the following:

lines 16, 26, 33, and 34 in column (A). • Receivables reportable on line 4.

Column (B). End of Year • Program-related investments reportable on line 13.

When Schedule D (Form 990) reporting is required for any item • Notes receivable acquired as investments reportable on line

12. in Part X, it is only for the end-of-year balance sheet figure

reported in column (B). If this is the organization’s final return, Line 8. Inventories for sale or use. Enter the amount of

enter zeros on lines 16, 26, 33, and 34 in column (B). materials, goods, and supplies held for future sale or use,

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whether purchased, manufactured by the organization, or Part X, line 15, column (B) must equal the total of Schedule D,

donated. Part IX, column (b).

Line 9. Prepaid expenses and deferred charges. Enter the Line 16. Total assets. The organization should add the totals amount of short-term and long-term prepayments of expenses in columns (A) and (B), lines 1 through 15. The amounts on line attributable to one or more future accounting periods. Examples 16 must equal the amounts on line 34 for both the beginning include prepayments of rent, insurance, or pension costs, and and end of the year. All filers must enter a zero or a dollar expenses incurred for a solicitation campaign to be conducted amount on this line.

in a future accounting period. Line 17. Accounts payable and accrued expenses. Enter

Line 10a. Land, buildings, and equipment. Enter the cost or the total of accounts payable to suppliers, service providers, other basis of all land, building, and equipment held at the end property managers and other independent contractors, plus of the year. Include both property held for investment purposes accrued expenses such as salaries payable, accrued payroll and property used for the organization1s exempt functions. If an taxes, and interest payable. amount is reported here, answer “Yes” to Part IV, line 11 and Line 18. Grants payable. Enter the unpaid portion of grants complete Schedule D, (Form 990), Part VI. The amount and awards that the organization has committed to pay other reported on line 10a must equal the total of Schedule D, Part organizations or individuals, regardless of whether the VI, columns (a) and (b). commitments have been communicated to the grantees. Line 10b. Accumulated depreciation. Enter the total amount

Line 19. Deferred revenue. Report revenue that the of accumulated depreciation with respect to the assets reported organization has received but not yet earned as of the balance on line 10a. The amount reported on line 10b must equal the sheet date under its method of accounting. total of Schedule D, (Form 990), Part VI, column (c).

Line 10c. Column (A)—Beginning of year. Enter the cost or Line 20. Tax-exempt bond liabilities. Enter the amount of

other basis of land, buildings, and equipment, net of any tax-exempt bonds (or other obligations) for which the

accumulated depreciation, as of the beginning of the year. organization has a direct or indirect liability which were either

issued by the organization on behalf of a state or local Line 10c. Column (B)—End of year. Enter line 10a minus governmental unit, or by a state or local governmental unit on line 10b. The amount reported must equal the total of Schedule behalf of the organization, and for which the organization has a D, (Form 990), Part VI, column (d). direct or indirect liability. Tax-exempt bonds include state or Line 11. Investments—publicly traded securities. Enter the local bonds and any obligations, including direct borrowing from total value of publicly traded securities held by the a lender, or certificates of participation, the interest on which is organization as investments. Publicly traded securities include excluded from the gross income of the recipient for federal common and preferred stocks, bonds (including governmental income tax purposes under section 103. obligations such as bonds and Treasury bills), and mutual fund

shares that are listed and regularly traded in an See also Part IV, line 24, and Schedule K, (Form 990),

over-the-counter market or an established exchange and for Supplemental Information on Tax-Exempt Bonds.

which market quotations are published or are otherwise readily Line 21. Escrow account liability. Enter the amount of funds

available. Report dividends and interest from these securities or other assets held in an escrow or custodial account for

on Part VIII, line 3. other individuals or organizations. Enter these amounts only if

Do not report on line 11 publicly traded stock for which the the related assets (such as cash) are reported on lines 1

organization holds 5% or more of the outstanding shares of the through 15 above. If an amount is reported on this line, the

same class. Report these investments on line 12. organization must also answer “Yes” to Part IV, line 9 and

complete Schedule D, Part IV. If the organization has signature Line 12. Investments—other securities. Report on this line authority over, or another interest in an escrow or custodial the total amount of all securities, partnerships, or funds that account for which it does not report the assets or liabilities, it are not publicly traded. This includes stock in a closely held must also answer “Yes” to Part IV, line 9 and complete company whose stock is not available for sale to the general Schedule D, Part IV. public or which is not widely traded. Other securities also

include publicly traded stock for which the organization holds Example. A credit counseling organization collects

5% or more of the outstanding shares of the same class. Do not amounts from debtors to remit to creditors and reports the

include program related investments. amounts temporarily in its possession as cash on line 1 of the

If an amount is reported on this line that is 5% or more of the balance sheet. It must then report the corresponding liability

amount reported on Part X, line 16, answer “Yes” to Part IV, line (the amounts to be paid to the creditors on the debtors’ behalf)

11 and complete Schedule D, (Form 990), Part VII. The amount on line 21.

reported on line 12, column (B) must equal the total of Schedule Line 22. Payables to current and former officers, directors, D, (Form 990), Part VII, column (b). trustees, key employees, highest compensated employees,

Line 13. Program-related investments. Report here the total and disqualified persons. Enter the unpaid balance of loans

book value of all investments made primarily to accomplish the payable to current and former officers, directors, trustees,

organization’s exempt purposes rather than to produce income. key employees, highest compensated employees, and

Examples of program-related investments include student loans disqualified persons. An organization that reports a balance

and notes receivable from other exempt organizations that here may need to answer “Yes” to Part IV, line 26 and complete

obtained the funds to pursue the filing organization’s exempt Schedule L, (Form 990), Transactions with Interested Persons,

function. Part II.

If the amount is reported on this line is 5% or more of the Line 23. Secured mortgages and notes payable to

amount reported on Part X, line 16, answer “Yes” to Part IV, line unrelated third parties. Enter the total amount of mortgages

11 and complete Part VIII of Schedule D (Form 990). The and other notes payable to financial institutions and other third

amount reported on Part X, line 13, column (B) must equal the parties that are secured by investment or other real property as

total of Schedule D, (Form 990), Part VIII, column (b). of the end of the tax year.

Line 14. Intangible assets. Report on this line the total value Line 24. Unsecured notes and loans payable. Enter the total

of all non-monetary, non-physical assets such as copyrights, amount of notes and loans payable that are owed to financial patents, trademarks, mailing lists, or goodwill. institutions or other unrelated third parties but are not secured

Line 15. Other assets. Report on this line the total book value by the organization’s assets.

of all assets held and not reported on lines 1 through 14. Line 25. Other liabilities. Enter the total amount of all

If an amount is reported on this line that is 5% or more of the liabilities not properly reportable on lines 17 through 24. Items

amount reported on Part X, line 16, answer “Yes” to Part IV, line properly reported on this line include Federal income taxes

11 and complete Schedule D, Part IX. The amount reported on payable and secured or unsecured payables to related

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organizations. The organization must also answer “Yes” to Part Line 31. Paid-In or capital surplus, or land, building, and

IV, line 11 and complete Schedule D, (Form 990), Part X. equipment fund. Enter the balance of paid-in capital in

excess of par or stated value for all stock issued and not yet Line 26. Total liabilities. The organization should add the cancelled, as recorded on the corporation’s books. If totals in columns (A) and (B), lines 17 through 25. All stockholders or others made donations that the organization organizations must enter a zero or a dollar amount on this line. records as paid-in capital, include them here. Enter the fund

Net Assets and Fund Balances balance for the land, building, and equipment fund on this line.

The Financial Accounting Standards Board issued Financial Line 32. Retained earnings or accumulated income,

Statements of Not-for-Profit Organizations (SFAS 117). SFAS endowment, or other funds. For corporations, enter the

117 provides standards for external financial statements balance of retained earnings as recorded on the corporation’s

certified by an independent accountant for certain types of books, or similar account, minus the cost of any corporate

nonprofit organizations. SFAS 117 does not apply to credit treasury stock. For trusts, enter the balance in the accumulated

unions, voluntary employees’ beneficiary associations, income or similar account. For those organizations using the

supplemental unemployment benefit trusts, section 501(c)(12) fund method of accounting, enter the total of the fund balances

cooperatives, and other member benefit or mutual benefit for the permanent and term endowment funds as well as

organizations. balances of any other funds not reported on lines 30 and 31.

While some states may require reporting in accordance with Line 33. Total net assets or fund balances. For

SFAS 117, the IRS does not. However, a Form 990 return organizations that follow SFAS 117, enter the total of lines 27

prepared in accordance with SFAS 117 will be acceptable to through 29. For all other organizations, enter the total of lines

the IRS. 30 through 32. All filers must enter a zero or a dollar amount on

Organizations that follow SFAS 117. this line. If the organization

follows SFAS 117, check the box above line 27, and complete Line 34. Total liabilities and net assets/fund balances.

lines 27 through 29 and lines 33 and 34. Classify and report net Enter the total of line 26 and line 33. This amount must equal

assets in three groups (unrestricted, temporarily restricted, and the amount on line 16. All filers must enter a zero or a dollar

permanently restricted) based on the existence or absence of amount on this line.

donor-imposed restrictions and the nature of those restrictions.

Show the sum of the three classes of net assets on line 33. On Part XI. Financial Statements and

line 34, add the amounts on lines 26 and 33 to show total

liabilities and net assets. This figure must be the same as the Reporting

figure for Total Assets on line 16. Line 1. Accounting method. Indicate the method of

Effective for reporting years ending after December 15, accounting used in preparing this return. See General

2008, FSP FAS 117-1 addresses reporting of Instructions, D. Accounting Periods and Methods. Provide an

CAUTION endowments as permanently restricted or temporarily explanation in Schedule O (Form 990) (1) if the organization !

restricted funds. Further, a number of states have enacted or changed its method of accounting from a prior year, or (2) if the

are considering enacting the Uniform Prudent Management of organization checked the “other” accounting method box.

Institutional Funds Act (“UPMIFA ”). If the organization is Line 2. Financial statements and independent accountant.

subject to UPMIFA or FSP 117-1, it may affect the amounts Answer “Yes” or “No” to indicate in line 2a or line 2b whether

reported in lines 27 through 29. the organization’s financial statements for the reporting period

Line 27. Unrestricted net assets. Enter the balance per were compiled, reviewed or audited by an independent

books of unrestricted net assets. Unrestricted net assets are accountant. An accountant is independent if he or she meets

neither permanently restricted nor temporarily restricted by the standards of independence set forth by the American

donor-imposed stipulations. All funds without donor-imposed Institute of Certified Public Accountants (AICPA), the Public

Company Accounting Oversight Board (PCAOB), or another restrictions must be classified as unrestricted, regardless of the

existence of any board designations or appropriations. similar body that oversees or sets standards for the accounting

or auditing professions. Line 28. Temporarily restricted net assets. Enter the

Answer “No” if the organization1 balance per books of temporarily restricted net assets. Donors’ s financial statements were

temporary restrictions may require that resources be used after compiled, reviewed, or audited as part of a consolidated

a specified date (time restrictions), or that resources be used for financial statement only. The organization may explain in

a specified purpose (purpose restrictions), or both. Schedule O that its financial statements were compiled,

reviewed, or audited on a consolidated basis. Line 29. Permanently restricted net assets. Enter the

balance per books of permanently restricted net assets. If “Yes” to either line 2a or line 2b, answer “Yes” or “No” in

Permanently restricted net assets are (a) assets, such as land line 2c to indicate whether the organization has a committee

or works of art, donated with stipulations that they be used for a that is responsible under its governing documents or through

specified purpose, be preserved, and not be sold or (b) assets delegation by its governing body for (i) overseeing the

donated with stipulations that they be invested to provide a compilation, review or audit of the financial statements, and (ii)

permanent source of income. The latter results from gifts or the selection of an independent accountant that compiled,

bequests that create permanent endowment funds. reviewed, or audited the statements. Answer “Yes” only if both

(i) and (ii) apply. Describe in Schedule O (Form 990) if this Organizations that do not follow SFAS 117. If the process has changed from the prior year. organization does not follow SFAS 117, check the box above

line 30 and complete lines 30 through 34. Report capital stock, Line 3a. Single Audit Act and OMB Circular A-133. Answer

trust principal, or current funds on line 30. Report paid-in capital “Yes” if during the year the organization was required under the

surplus or land, building, or equipment funds on line 31. Report Single Audit Act of 1984, as amended in 1996, and OMB

retained earnings, endowment, accumulated income or other Circular A-133 to undergo an audit or audits because of its

funds on line 32. receipt of federal contract awards. The Single Audit Act requires

states, local governments, and nonprofit organizations that Line 30. Capital stock, trust principal, or current funds. For expend $500,000 or more of federal awards in a year to obtain corporations, enter the balance per books of capital stock an annual audit in accordance with the Act. accounts. Show par or stated value (or for stock with no par or

stated value, total amount received on issuance) of all classes Line 3b. Required audits. If “Yes” to line 3a, indicate whether

of stock issued and not yet cancelled. For trusts, enter the the organization has undergone the required audit or audits. If

amount in the trust principal or corpus. For organizations using the answer to line 3b is “No,” explain in Schedule O (Form 990)

the fund method of accounting, enter the fund balances for the why the organization has not undergone any required audits

organization’s current restricted and unrestricted funds. and describe any steps taken to undergo such audits.

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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

990 117 hr., 54 min. 16 hr., 4 min. 23 hr., 29 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) 39 hr., 56 min. 6 hr., 51 min. 7 hr., 48 min. - - - - -

Schedule B (Form 990, 990-EZ, or 5 hr., 58 min. 1 hr., 35 min. 1 hr., 45 min. - - - - -

990-PF)

Schedule C (Form 990 or 990-EZ) 22 hr., 0 min. 42 min. 1 hr., 5 min. - - - - -

Schedule D (Form 990) 30 hr., 51 min. 1 hr., 17 min. 1 hr., 51 min. - - - - -

Schedule E (Form 990 or 990-EZ) 5 hr., 30 min. 53 min. 1 hr., 1 min. - - - - -

Schedule F (Form 990) 6 hr., 42 min. 6 min. 12 min. - - - - -

Schedule G (Form 990 or 990-EZ) 24 hr., 9 min. 24 min. 48 min. - - - - -

Schedule H (Form 990) 71 hr., 1 min. - - - - - 1 hr., 9 min. - - - - -

Schedule I (Form 990) 5 hr., 15 min. 18 min. 23 min. - - - - -

Schedule J (Form 990) 13 hr., 21 min. 2 hr., 34 min. 2 hr., 54 min. - - - - -

Schedule K (Form 990) 9 hr., 34 min. 2 hr., 22 min. 2 hr., 39 min. - - - - -

Schedule L (Form 990 or 990-EZ) 5 hr., 30 min. 1 hr., 5 min. 1 hr., 13 min. - - - - -

Schedule M (Form 990) 28 hr., 27 min. 35 min. 1 hr., 5 min. - - - - -

Schedule N (Form 990 or 990-EZ) 7 hr., 53 min. 42 min. 51 min. - - - - -

Schedule O (Form 990) 43 min. - - - - - - - - - - - - - - -

Schedule R (Form 990) 14 hr., 36 min. 1 hr., 29 min. 1 hr., 52 min. - - - - -

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 E.

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Glossary

NOTES: • Words in bold within a definition are defined elsewhere within the Glossary.

• All section references are to the Internal Revenue Code (Title 26 of U.S. Code)

or regulations under Title 26, unless otherwise specified.

• Definitions are for purposes of filing Form 990 (and Schedules) only.

35% controlled entity An entity that is owned, directly or indirectly (e.g., under constructive ownership

rules of section 267(c)), by a given person, such as the organization’s current or

former officers, directors, trustee, or key employees listed in Form 990, Part

VII, Section 1, or the family members thereof (listed persons) as follows:

1. A corporation in which listed persons own more than 35% of the total

combined voting power;

2. A partnership in which listed persons own more than 35% of the profits

interest; or

3. A trust or estate in which listed persons own more than 35% of the

beneficial interest.

Accountable plan A reimbursement or other expense allowance arrangement that satisfies the

requirements of section 62(c) by meeting the requirements of business

connection, substantiation, and returning amounts in excess of substantiated

expenses. See Regulations section 1.62-2(c)(2).

Activities conducted outside the United For purposes of Schedule F, Statement of Activities Outside the United States,

States includes grantmaking, fundraising, unrelated trade or business, program

services, or maintaining offices, employees, or agents in particular regions

outside the United States.

Applicable tax-exempt organization A section 501(c)(3) or a section 501(c)(4) organization, or that was such an

organization at any time during the 5-year period ending on the day of the excess

benefit transaction.

Art See works of art.

Audited financial statement A formal opinion of an organization’s financial records and practices by an

independent, certified public accountant with the objective of assessing the

accuracy and reliability of the organization’s financial statements.

Audit committee A committee, generally established by the governing body of an organization,

with the responsibilities to oversee the organization’s financial reporting process,

monitor choice of accounting policies and principles, monitor internal control

processes, or oversee hiring and performance of any external auditors.

Bingo A game of chance played with cards that are generally printed with five rows of

five squares each. Participants place markers over randomly called numbers on

the cards in an attempt to form a pre-selected pattern such as a horizontal,

vertical, or diagonal line, or all four corners. The first participant to form the

pre-selected pattern wins the game. To be a bingo game, the game must be of the

type described in which wagers are placed, winners are determined, and prizes or

other property are distributed in the presence of all persons placing wagers in that

game. Certain consolation bingo games within a progressive bingo game may

also qualify as bingo.

Board-designated endowment See quasi-endowment.

Bond issue An issue of two or more bonds that are:

1. Sold at substantially the same time;

2. Sold pursuant to the same plan of financing; and

3. Payable from the same source of funds.

See Regulations section 1.150-1(c).

-41-
Business relationship Business relationships between two persons include the following:

1. One person is employed by the other in a sole proprietorship or by an

organization with which the other is associated as a trustee, director, officer,

key employee, or greater-than-35% owner.

2. One person is transacting business with the other (other than in the ordinary

course of either party’s business on the same terms as are generally offered to

the public), directly or indirectly, in one or more contracts of sale, lease, license,

loan, performance of services, or other transaction involving transfers of cash or

property valued in excess of $10,000 in the aggregate during the organization’s

tax year. Indirect transactions are transactions with an organization with which the

one person is associated as a trustee, director, officer, key employee, or

greater-than-35% owner.

3. The two persons are each a director, trustee, officer, or greater than 10%

owner in the same business or investment entity.

Ownership is measured by stock ownership (either voting power or value) of a

corporation, profits or capital interest in a partnership or limited liability company,

membership interest in a nonprofit organization, or beneficial interest in a trust.

Ownership includes indirect ownership (e.g., ownership in an entity that has

ownership in the entity in question); there may be ownership through multiple tiers

of entities.

Cash contributions Contributions received in the form of cash, checks, money orders, credit card

charges, wire transfers, and other transfers and deposits to a cash account of the

organization.

Central organization The parent organization in a group exemption, which exercises general

supervision and control over the subordinate organizations in the group

exemption.

CEO, executive director, or top management See top management official. “CEO” stands for chief executive officer.

official

Certified historic structure Any building or structure listed in the National Register of Historic Places as well

as any building certified as being of historic significance to a registered historic

district. See section 170(h)(4)(B) for special rules that apply to contributions

made after August 17, 2006.

Church Certain characteristics are generally attributed to churches. These attributes of a

church have been developed by the IRS and by court decisions. They include:

distinct legal existence; recognized creed and form of worship; definite and distinct

ecclesiastical government; formal code of doctrine and discipline; distinct religious

history; membership not associated with any other church or denomination;

organization of ordained ministers; ordained ministers selected after completing

prescribed courses of study; literature of its own; established places of worship;

regular congregations; regular religious services; Sunday schools for the religious

instruction of the young; schools for the preparation of its ministers. The IRS

generally uses a combination of these characteristics, together with other facts

and circumstances, to determine whether an organization is considered a church

for federal tax purposes. A convention or association of churches is generally

treated like a church for federal tax purposes. See Pub. 1828, Tax Guide for

Churches and Religious Organizations.

Closely held stock Generally, shares of stock in a closely held company that is not available for sale

to the general public or which is not widely traded (see further explanation in the

instructions for Part IX, line 12 and Schedule M, Noncash Contributions, line 10).

Collections of works of art, historical Include collections, as described in SFAS 116, of works of art, historical

treasures, and other similar assets treasures, and other similar assets held for public exhibition, education, or

research in furtherance of public service.

Collectibles Include autographs, sports memorabilia, dolls, stamps, coins, books (other than

books and publications reported on line 4 of Schedule M, Noncash Contributions),

gems, jewelry (other than costume jewelry reportable on line 5 of Schedule M).

Compensation Unless otherwise provided, all forms of cash and noncash payments or benefits

provided in exchange for services, including salary and wages, bonuses,

severance payments, deferred payments, retirement benefits, fringe benefits, and

other financial arrangements or transactions such as personal vehicles, meals,

housing, personal and family educational benefits, below-market loans, payment

of personal or family travel, entertainment, and personal use of the organization’s

property. See also deferred compensation, nonqualified deferred

compensation, and reportable compensation.

Compilation (compiled financial statements) A compilation is a presentation of financial statements and other information that

is the representation of the management or ownership of an organization and

which has not been reviewed or audited by an independent accountant.

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Conflict of interest policy A policy that defines conflict of interest, identifies the classes of individuals within

the organization covered by the policy, facilitates disclosure of information that

may help identify conflicts of interest, and specifies procedures to be followed in

managing conflicts of interest. A conflict of interest arises when a person in a

position of authority over an organization, such as an officer, director, or

manager, may benefit financially from a decision he or she could make in such

capacity, including indirect benefits such as to family members or businesses

with which the person is closely associated. For this purpose, a conflict of interest

does not include questions involving a person’s competing or respective duties to

the organization and to another organization, such as by serving on the boards of

both organizations, that do not involve a material financial interest of, or benefit to,

such person.

Conservation easement A restriction on the use that may be made of, or changes made to, real property

that is granted in perpetuity to a qualified organization exclusively for conservation

purposes. Conservation purposes include protection of natural habitat, the

preservation of open space; or the preservation of property for historic,

educational, or recreational purposes. Qualified organizations include

governmental units and certain tax-exempt organizations described in section

501(c)(3) that have a commitment to protect the conservation purposes of the

easement and the resources to enforce the restrictions. For more information see

Notice 2004-41, 2004-28 I.R.B. 31. See also qualified conservation

contribution.

Contributions Unless otherwise provided, includes donations, gifts, bequests, grants, and other

transfers of money or property to the extent that adequate consideration is not

provided in exchange and that the contributor intends to make a gift, whether or

not made for charitable purposes. A transaction may be partly a sale and partly a

contribution. See also cash contributions and noncash contributions.

Control For purposes of determining related organizations, control means:

• in regards to nonprofit organizations and other organizations without owners or

persons having beneficial interests, whether such organization is taxable or

tax-exempt:

1. In the case of a parent/subsidiary relationship:

a. The power to remove and replace (or to appoint or elect, if such power

includes a continuing power to appoint or elect periodically or in the event of

vacancies) a majority of the nonprofit organization’s or other organization’s

directors or trustees, or

b. Management or board overlap where a majority of the subsidiary

organization’s directors or trustees are trustees, directors, officers, employees,

or agents of the parent organization.

2. In the case of brother/sister nonprofit organizations:

the same persons constitute a majority of the members of the governing body

of both organizations.

• In the case of stock corporations and other organizations with owners or persons

having beneficial interests, whether such organization is taxable or tax-exempt,

control means any of the following relationships:

1. Ownership of more than 50% of the stock (by voting power or value) of a

corporation,

2. Ownership of more than 50% of the profits or capital interest in a

partnership,

3. Ownership of more than 50% of the profits or capital interest in a limited

liability company treated as a partnership for federal income tax purposes,

regardless of the designation under state law of the ownership interests as stock,

membership interests, or otherwise,

4. Being a managing partner or managing member in a partnership or limited

liability company which has three or fewer managing partners or managing

members (regardless of which partner or member has the most actual control),

5. Being a general partner in a limited partnership which has three or fewer

general partners (regardless of which partner has the most actual control),

6. Being the sole member of a disregarded entity, or

7. Ownership of more than 50% of the beneficial interest in a trust.

See Regulations sections 301.7701-2, 3, and 4 for more information on

classification of corporations, partnerships, disregarded entities, and trusts.

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Control may be indirect. For example, if the organization controls Entity A, which

in turn controls (under the definition of control above) Entity B, the organization

will be treated as controlling Entity B. To determine indirect control through

constructive ownership of a corporation, the rules under section 318 (relating to

constructive ownership of stock) shall apply. Similar principles apply for purposes

of determining constructive ownership of another entity (a partnership or trust). If

an entity (X) controls an entity treated as a partnership for federal income tax

purposes by being one of three or fewer partners or members, then an

organization that controls X also controls the partnership.

Controlled Entity An organization controlled by a controlling organization under section

512(b)(13). For the definition of control in this context, see section 512(b)(13)(D)

and Regulations section 1.512(b)-1(L)(4).

Controlling organization under section An exempt organization that controls a controlled entity. Section 512(b)(13)

512(b)(13) treats payments of interest, annuity, royalties, and rent from a controlled entity to a

controlling organization as unrelated business taxable income under certain

circumstances. For the definition of control in this context, see section

512(b)(13)(D).

Credit counseling services Includes the providing of information to the general public on budgeting, personal

finance, and saving and spending practices, or assisting individuals and families

with financial problems by providing them with counseling. See section

501(q)(4)(A).

Current year The tax year for which the Form 990 is being filed; see also fiscal year.

Defeasance escrow An irrevocable escrow established to redeem the bonds on their earliest call date

in an amount that, together with investment earnings, is sufficient to pay all the

principal of, and interest and call premiums on, bonds from the date the escrow is

established to the earliest call date. See Regulations section 1.141-12(d)(5).

Debt management plan services Services related to the repayment, consolidation, or restructuring of a consumer’s

debt, including the negotiation with creditors of lower interest rates, the waiver or

reduction of fees, and the marketing and processing of debt management plans.

See section 501(q)(4)(B).

Deferred compensation Compensation that is earned or accrued in, or is attributable to, one year and

deferred to a future year for any reason, whether or not funded, vested, or subject

to a substantial risk of forfeiture. Deferred compensation may or may not be

included in reportable compensation for the current year.

Director See director or trustee.

Director or trustee A member of the organization’s governing body, but only if the member has any

voting rights. A member of an advisory board that does not exercise any

governance authority over the organization is not considered a director or trustee.

Disqualified person A. For purposes of section 4958; Form 990, Parts IX and X; and Schedule L,

Transactions With Interested Persons, Parts I and II, any person who was in a

position to exercise substantial influence over the affairs of the applicable

tax-exempt organization at any time during a 5-year period ending on the date of

the transaction. Persons who hold certain powers, responsibilities, or interests are

among those who are in a position to exercise substantial influence over the

affairs of the organization.

A disqualified person includes:

• A disqualified person’s family member,

• A 35% controlled entity of a (1) disqualified person and/or (2) family members

of the disqualified person,

• A donor or donor advisor to a donor advised fund, or

• An investment advisor of a sponsoring organization.

The disqualified persons of a supported organization include the disqualified

persons of a section 509(a)(3) supporting organization that supports the

supported organization.

See Appendix G for more information on disqualified persons and section 4958

excess benefit transactions.

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B. Under section 4946, a disqualified person includes:

1. A substantial contributor, which is any person who gave an aggregate

amount of more than $5,000, if that amount is more than 2% of the total

contributions the foundation or organization received from its inception through

the end of the year in which that person’s contributions were received. If the

organization is a trust, a substantial contributor includes the creator of the trust

(without regard to the amount of contributions the trust received from the creator

and related persons). Any person who is a substantial contributor at any time

generally remains a substantial contributor for all future periods even if later

contributions by others push that person’s contributions below the 2% figure

discussed above. Gifts from the contributor’s spouse are treated as gifts from the

contributor. Gifts are generally valued at fair market value as of the date the

organization received them.

2. A foundation manager, defined as an officer, director, or trustee of the

organization or any individual having powers or responsibilities similar to those of

officers, directors, or trustees.

3. An owner of more than 20% of the voting power of a corporation, profits

interest of a partnership, or beneficial interest of a trust or an unincorporated

enterprise that is a substantial contributor to the organization.

4. A family member of an individual in the first three categories.

5. A corporation, partnership, trust, or estate in which persons described in (1)

through (4) above own more than 35% of the voting power, profits interest, or

beneficial interest.

For purposes of section 509(a)(2), as referenced in Schedule A (Form 990 or

990-EZ), Public Charity Status and Public Support, a disqualified person is

defined in section 4946, except that it does not include an organization described

in section 509(a)(1).

For purposes of section 509(a)(3), as referenced in Schedule A (Form 990 or

990-EZ), a disqualified person is defined in section 4946, except that it does not

include a foundation manager or an organization described in section 509(a)(1) or

509(a)(2).

Disregarded entity or entities An entity wholly owned by the organization that is not a separate entity for Federal

tax purposes. See Regulations sections 301.7701-2, -3.

Domestic organization A corporation or partnership is domestic if created or organized in the U.S. or

under the law of the U.S. or of any state or possession. A trust is domestic if a

court within the U.S. or a U.S. possession is able to exercise primary supervision

over the administration of the trust, and one or more U.S. persons (or persons in

the possessions of the U.S.) have the authority to control all substantial decisions

of the trust.

Donor advised fund A fund or account:

1. That is separately identified by reference to contributions of a donor or

donors;

2. That is owned and controlled by a sponsoring organization; and

3. For which the donor or donor advisor has or reasonably expects to have

advisory privileges in the distribution or investment of amounts held in the donor

advised funds or accounts because of the donor’s status as a donor.

 A donor advised fund does not include any fund or account:

1. That makes distributions only to a single identified organization or

governmental entity, or

2. In which a donor or donor advisor gives advice about which individuals

receive grants for travel, study, or other similar purposes, if:

a. The donor or donor advisor’s advisory privileges are performed exclusively

by such person in his or her capacity as a committee member in which all of the

committee members are appointed by the sponsoring organization;

b. No combination of donors or donor advisors (and related persons as

defined below) directly or indirectly control the committee; and

c. All grants from the fund or account are awarded on an objective and

nondiscriminatory basis following a procedure approved in advance by the board

of directors of the sponsoring organization. The procedure must be designed to

ensure that all grants meet the requirements of sections 4945(g)(1), (2), or (3); or

3. That the Secretary exempts from being treated as a donor advised fund

because either such fund or account is advised by a committee not directly or

indirectly controlled by the donor or donor advisor or such fund benefits a single

identified charitable purpose. For example, see Notice 2006-109, 2006-51 I.R.B.

1121, and any future related guidance.

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Donor advisor Any person appointed or designated by a donor to advise a sponsoring

organization on the distribution or investment of amounts held in the donor’s

donor advised fund or similar account.

EIN Employer identification number, a nine-digit number. Use Form SS-4 to apply for

an EIN.

Employee Any individual who, under the usual common law rules applicable in determining

the employer-employee relationship, has the status of an employee, and any other

individual who is treated as an employee for federal employment tax purposes

under section 3121(d). See Pub. 1779, Independent Contractor or Employee, for

more information.

Endowment See term endowment, permanent endowment, and quasi endowment. See

also SFAS 117.

Escrow or custodial account Refers to an account (whether a segregated account at a financial institution or a

set-aside on the organization’s books and records) over which the organization

has signature authority, in which the funds are held for the benefit of other

organizations or individuals, regardless of whether the funds are reported on Part

X, line 21, and regardless of whether the account is labeled as “escrow account,”

“custodial account,” “trust account,” or some similar term.

Excess benefit transaction In the case of an applicable tax-exempt organization, any transaction in which

an excess benefit is provided by the organization, directly or indirectly to, or for the

use of, any disqualified person, as defined in section 4958. Excess benefit

generally means the excess of the economic benefit received from the applicable

organization over the consideration given (including services) by a disqualified

person. See Appendix G for more information.

Donor advised fund. For a donor advised fund, an excess benefit transaction

also includes a grant, loan, compensation, or similar payment from the fund to a:

• Donor or donor advisor;

• Family member of a donor or donor advisor;

• 35% controlled entity of a donor or donor advisor; or

• 35% controlled entity of a family member of a donor or donor advisor.

The excess benefit in this transaction is the amount of the grant, loan,

compensation, or similar payments.

For additional information see the Instructions for Form 4720.

Supporting organization. For any supporting organization, defined in section

509(a)(3), an excess benefit transaction also includes grants, loans,

compensation, or similar payments provided by the supporting organization to a:

• Substantial contributor,

• Family member of a substantial contributor,

• 35% controlled entity of a substantial contributor, or

• 35% controlled entity of a family member of a substantial contributor.

For this purpose, the excess benefit is defined as the amount of the grant, loan,

compensation, or similar payments. Additionally, an excess benefit transaction

includes any loans provided by the supporting organization to a disqualified

person (other than an organization described in section 509(a)(1), (2), or (4)).

Exempt bond See tax-exempt bond.

Family member, family relationship Unless specified otherwise, the family of an individual includes only his or her

spouse, ancestors, brothers and sisters (whether whole or half blood), children

(whether natural or adopted), grandchildren, great-grandchildren, and spouses of

brothers, sisters, children, grandchildren, and great-grandchildren.

FIN 48 Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting

for Uncertainty in Income Taxes -an interpretation of FASB Statement No. 109.

The organization may be required to provide in Schedule D, Supplemental

Financial Statements, the text of the footnote to its financial statements

regarding the organization’s liability for uncertain tax positions under FIN 48.

Financial statements An organization’s statements of revenue and expenses and balance sheet, or

similar statements prepared regarding the financial operations of the organization.

Fiscal year An annual accounting period ending on the last day of a month other than

December. See also tax year and current year.

Foreign government A governmental agency or entity, or a political subdivision thereof, that is not

classified as a United States agency or governmental unit, regardless of where

it is located or operated.

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Foreign individual A person, including a U.S. citizen or resident, who lives or resides outside the

United States. For purposes of Form 990, Part IX, and Schedule F, Statement of

Activities Outside the United States, a person who lives or resides outside the

United States at the time the grant is paid or distributed to the individual.

Foreign organization A foreign estate or trust, nonprofit or other nongovernmental organization,

partnership, corporation, or other entity that is not created or organized in the

United States or under the laws of the United States. A foreign organization

includes an affiliate that is organized as a legal entity separate from the filing

organization, but does not include any branch office, account, or employee of the

organization located outside the United States.

Fundraising See fundraising activities.

Fundraising activities Activities undertaken to induce potential donors to contribute money, securities,

services, materials, facilities, other assets, or time. They include publicizing and

conducting fundraising campaigns; maintaining donor mailing lists; conducting

fundraising events, preparing and distributing fundraising manuals, instructions,

and other materials; and conducting other activities involved with soliciting

contributions from individuals, foundations, governments, and others.

Fundraising activities do not include gaming (other than gaming that is incidental

to a fundraising activity) or the conduct of any trade or business that is regularly

carried on.

Fundraising events For purposes of Schedule G, Supplemental Information Regarding Fundraising or

Gaming Activities, fundraising events include dinners and dances, door-to-door

sales of merchandise, concerts, carnivals, sports events, auctions, and casino

nights not regularly carried on. Fundraising events do not include sales of gifts or

goods or services of only nominal value, sweepstakes, lotteries, or raffles where

the names of contributors or other respondents are entered in a drawing for

prizes, raffle, or lotteries where prizes have only nominal value, or solicitation

campaigns that generate only contributions.

GAAP See generally accepted accounting principles.

Gaming Includes (but is not limited to): bingo, pull tabs/instant bingo (including satellite

and progressive bingo), Texas Hold-Em Poker and other card games, raffles,

scratch-offs, charitable gaming tickets, break-opens, hard cards, banded tickets,

jar tickets, pickle cards, Lucky Seven cards, Nevada Club tickets, casino nights,

Las Vegas nights, and coin-operated gambling devices. Coin-operated gambling

devices include slot machines, electronic video slot or line games, video poker,

video blackjack, video keno, video bingo, video pull tab games, etc.

Generally Accepted Accounting Principles The accounting principles set forth by the Financial Accounting Standards Board

(FASB) and the American Institute of Certified Public Accountants (AICPA) that

guide the work of accountants in reporting financial information and preparing

audited financial statements for organizations.

Governing body The group of persons authorized under state law to make governance decisions

on behalf of the organization and its shareholders or members, if applicable. The

governing body is, generally speaking, the board of directors (sometimes referred

to as board of trustees) of a corporation or association, or the board of trustees of

a trust (sometimes referred to simply as the trustees, or trustee if only one

trustee).

Government official A federal, state or local official described within section 4946(c).

Governmental issuer A State or local governmental unit that issues a tax-exempt bond.

Governmental unit A State, a possession of the United States, or a political subdivision of a State

or U.S. possession, the United States, or the District of Columbia. See section

170(c)(1).

Grants and other assistance Includes awards, prizes, cash allocations, stipends, scholarships, fellowships,

research grants, and similar payments and distributions made by the organization

during the tax year. It does not include salaries or other compensation to

employees.

Gross proceeds For purposes of Schedule K, Supplemental Information on Tax-Exempt Bonds,

generally any sale proceeds, investment proceeds, transferred proceeds, and

replacement proceeds of an issue. See Regulations section 1.148-1(b),(c).

Gross receipts See Appendix B (How to Determine Whether an Organization’s Gross Receipts

Are Normally $25,000 (or $5,000) or Less) and Appendix C, Special Gross

Receipts Test for Determining Exempt Status of section 501(c)(7) and 501(c)(15)

Organizations.

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Group exemption Tax exemption of a group of organizations all exempt under the same Code

section, applied for and obtained by a central organization on behalf of

subordinate organizations under the central organization’s general supervision

or control. See Rev. Proc. 80-27, 1980-1 C.B. 677, and Appendix E. Group

Returns—Reporting Information on Behalf of the Group, for more information.

Group return A Form 990 filed by the central organization of a group exemption for two or

more of the subordinate organizations. See General Instructions and Appendix

E. Group Returns—Reporting Information on Behalf of the Group, for more

information.

Highest compensated employee One of the five highest compensated employees of the organization (including

employees of a disregarded entity of the organization) other than officers or key

employees. The five highest compensated employees are determined by the

amounts of reportable compensation for the calendar year ending with or within

the organization’s tax year.

Historical treasure A building, structure, area, or property (real or personal) with recognized cultural,

aesthetic, or historical value that is significant in the history, architecture,

archeology, or culture of a country, state, or city.

Hospital For purposes of Schedule H, Hospitals, a hospital is a facility that is, or is required

to be, licensed, registered, or similarly recognized by a state as a hospital. This

includes a hospital that is operated through a disregarded entity or a joint

venture treated as a partnership for federal income tax purposes. It does not

include hospitals that are located outside the United States. It also does not

include hospitals that are operated by entities organized as separate legal entities

from the organization that are taxable as a corporation for federal tax purposes

(except for members of a group exemption included in a group return filed by

an organization).

Hospital (or cooperative hospital service For purposes of Schedule A, Public Charity Status and Public Support, a hospital

organization) (or cooperative hospital service organization) is an organization whose main

purpose is to provide hospital or medical care. For purposes of Schedule A, a

rehabilitation institution or an outpatient clinic may qualify as a hospital if its

principal purposes or functions are the providing of hospital or medical care, but

the term does not include medical schools, medical research organizations,

convalescent homes, homes for children or the aged, or vocational training

institutions for handicapped individuals.

Household goods Include furniture, furnishings, electronics, appliances, linens, and other similar

items. They do not include food, paintings, antiques and other objects of art,

jewelry and gems (other than costume jewelry), and other collectibles.

Independent contractor A person who provides services to the organization but who is not treated as an

employee. See Pub. 1779, Independent Contractor or Employee, for more

information.

Independent voting member of governing A voting member of the governing body, if all three of the following

body circumstances applied at all times during the organization’s tax year:

1. The member was not compensated as an officer or other employee of the

organization or of a related organization (see the instructions for Schedule R,

Related Organizations and Unrelated Partnerships), except as provided in the

religious exception discussed in the instructions for Form 990, Part VI.

2. The member did not receive total compensation or other payments

exceeding $10,000 during the organization’s tax year from the organization or

from related organizations as an independent contractor, other than

reimbursement of expenses under an accountable plan or reasonable

compensation for services provided in the capacity as a member of the

governing body. For example, a person who receives reasonable expense

reimbursements and reasonable compensation as a director of the organization

does not cease to be independent merely because he or she also received

payments of $7,500 from the organization for other arrangements.

3. Neither the member, nor any family member of the member, was involved

in a transaction with the organization (whether directly or indirectly through

affiliation with another organization) required to be reported on Schedule L,

Transactions With Interested Persons, for the organization’s tax year, or in a

transaction with a related organization of a type and amount that would be

reportable on Schedule L if required to be filed by the related organization.

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A member of the governing body is not considered to lack independence merely

because of the following circumstances:

1. The member is a donor to the organization, regardless of the amount of the

contribution;

2. The member has taken a bona fide vow of poverty and either:

a. Receives compensation as an agent of a religious order or a section

501(d) religious or apostolic organization, but only under circumstances in which

the member does not receive taxable income (for example, Rev. Rul. 77-290,

1977-2 C.B. 26; Rev. Rul. 80-332); or

b. Belongs to a religious order that receives sponsorship or payments from the

organization that do not constitute taxable income to the member.

3. The member receives financial benefits from the organization solely in the

capacity of being a member of the charitable or other class served by the

organization in the exercise of its exempt function, such as being a member of a

section 501(c)(6) organization, so long as the financial benefits comply with the

organization’s terms of membership.

Initial contract A binding written contract between an applicable tax-exempt organization and a

person who was not a disqualified person immediately prior to entering into the

contract.

Instant bingo See pull tabs.

Institutional trustee A trustee that is not an individual or natural person but an organization. For

instance, a bank or trust company serving as the trustee of a trust is an

institutional trustee.

Joint venture Unless otherwise provided, a partnership, limited liability company, or other entity

treated as a partnership for federal tax purposes, as described in Regulations

sections 301.7701-1 through 301.7701-3.

Key employee For purposes of Form 990 reporting, an employee of the organization (other than

an officer, director, or trustee) who meets all three of the following tests:

1. $150,000 Test. Receives reportable compensation from the organization

and all related organizations in excess of $150,000 for the calendar year ending

with or within the organization’s tax year.

2. Responsibility Test. The employee:

a. has responsibilities, powers or influence over the organization as a whole

similar to those of officers, directors, or trustees;

b. manages a discrete segment or activity of the organization that represents 10%

or more of the activities, assets, income, or expenses of the organization, as

compared to the organization as a whole;

c. or has or shares authority to control or determine 10% or more of the

organization’s capital expenditures, operating budget, or compensation for

employees.

3. Top 20 Test. Is one of the 20 employees (that satisfy the $150,000 Test and

Responsibility Test) with the highest reportable compensation from the

organization and related organizations for the calendar year ending with or

within the organization’s tax year.

Legislation Includes action by Congress, any state legislature, any local council, or similar

governing body with respect to acts, bills, resolutions, or similar items or by the

public in referenda, ballot initiatives, constitutional amendments or similar

procedures. It does not include actions by executive, judicial or administrative

bodies.

Lobbying See lobbying activities.

Lobbying activities All activities intended to influence foreign, national, state or local legislation. Such

activities include direct lobbying (attempting to influence the legislators) and

grassroots lobbying (attempting to influence legislation by influencing the general

public).

Maintaining offices, employees or agents For purposes of Schedule F, Statement of Activities Outside the United States,

includes principal, regional, district, or branch offices, such offices maintained by

agents, and persons situated at those offices paid wages for services performed.

“Agent” is defined under traditional agency principles (but does not include

volunteers).

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Management Company An organization that performs management duties for another organization

customarily performed by or under the direct supervision of the other

organization’s officers, directors, trustees, or key employees. These

management duties include, but are not limited to, hiring, firing, and supervising

personnel; planning or executing budgets or financial operations; and supervising

exempt operations or unrelated trades or businesses.

Medical research For purposes of a medical research organization operated in conjunction with a

hospital (see Schedule A (Form 990 or 990-EZ), Public Charity Status and Public

Support), medical research means investigations, studies and experiments

performed to discover, develop, or verify knowledge relating to physical or mental

diseases and impairments and their causes, diagnosis, prevention, treatment, or

control.

Member of the governing body A person who serves on an organization’s governing body, including a director

or trustee, but not if the person lacks voting power.

Noncash contributions Contributions of property, tangible or intangible, other than money. Noncash

contributions include, but are not limited to, stocks, bonds, and other securities;

real estate; works of art; stamps, coins, and other collectibles; clothing and

household goods; vehicles, boats, and airplanes; inventories of food, medical

equipment or supplies, books, or seeds; intellectual property, including patents,

trademarks, copyrights, and trade secrets; donated items that are sold

immediately after donation, such as publicly traded stock or used cars; and items

donated for sale at a charity auction. Noncash contributions do not include

volunteer services performed for the reporting organization or use of facilities.

Nonexempt charitable trust A trust that meets the following conditions:

• Is not exempt from tax under section 501(a),

• All of its unexpired interests are devoted to charitable purposes, and

• A charitable deduction was allowed for contributions to the trust under section

170, section 545(b)(2), section 642(c), section 2055, section 2106(a)(2), or section

2522, or for amounts paid by or permanently set aside by the trust under section

642(c).

Nonqualified deferred compensation Deferred compensation that is earned pursuant to a nonqualified plan or

nongovernmental section 457 plan. Different rules may apply for purposes of

identifying arrangements subject to sections 83, 409A, 457(f), and 3121(v).

Earned but unpaid incentive compensation may be deferred pursuant to a

nonqualified deferred compensation plan.

Officer Unless otherwise provided, a person elected or appointed to manage the

organization’s daily operations, such as a president, vice-president, secretary, or

treasurer. The officers of an organization are determined by reference to its

organizing document, bylaws, or resolutions of its governing body, or as otherwise

designated consistent with state law, but at a minimum include those officers

required by applicable state law. For purposes of Form 990 reporting, treat the

organization’s top management official and top financial official (the person who

has ultimate responsibility for managing the organization’s finances) as officers.

“On behalf of” issuer A corporation organized under the general nonprofit corporation law of a state

whose obligations are considered obligations of a state or local governmental

unit. See Rev. Proc. 82-26 for a description of the circumstances under which the

Service will ordinarily issue an advance ruling that the obligations of a nonprofit

corporation were issued on behalf of a state or local governmental unit. See also

Rev. Rul. 63-20, 1963-1 C.B. 24; Rev. Rul. 59-41, 1959-1 C.B. 13; and Rev. Rul.

54-296, 1954-2 C.B. 59. An “on behalf of” issuer also includes any corporation

organized by a state or local governmental unit specifically to issue tax-exempt

bonds to further public purposes. See Rev. Rul. 57-187.

Organization manager For purposes of section 4958, any officer, director, or trustee of an applicable

tax-exempt organization, or any individual having powers or responsibilities

similar to officers, directors, or trustees of the organization, regardless of title.

Permanent (true) endowment Endowment funds that are maintained to provide a permanent source of income,

with the stipulation that principal must be invested and kept intact in perpetuity,

while only the income generated can be used by the organization. See SFAS 117.

Political campaign activities All activities that support or oppose candidates for elective federal, state or local

public office. It does not matter whether the candidate is elected. A candidate is

one who offers himself or is proposed by others for public office. Political

campaign activity does not include any activity to encourage participation in the

electoral process, such as voter registration or voter education, provided that the

activity does not directly or indirectly support or oppose any candidate.

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Political subdivision A division of any state or local governmental unit which is a municipal

corporation or which has been delegated the right to exercise part of the

sovereign power of the unit. Sovereign power includes the power to make and

enforce laws.

Possession of the United States Includes the Commonwealth of Puerto Rico, the Commonwealth of the Northern

Mariana Islands, Guam, American Samoa, and the United States Virgin Islands.

Private business use For purposes of Schedule K, Supplemental Information on Tax-Exempt Bonds,

use by the organization or another 501(c)(3) organization in an unrelated trade

or business. Private business use also generally includes any use by a

nongovernmental person other than a section 501(c)(3) organization unless

otherwise permitted through an exception or safe harbor provided under the

Regulations or a revenue procedure.

Private foundation An organization described in section 501(c)(3) that is not a public charity. Some

private foundations are classified as operating foundations (also known as private

operating foundations) under section 4942(j)(3) or exempt operating foundations

under section 4940(d)(2). A private foundation retains its private foundation status

until such status is terminated under section 507. Thus, a tax-exempt private

foundation becomes a taxable private foundation if its section 501(c)(3) status is

revoked.

Proceeds For purposes of Schedule K, Supplemental Information on Tax-Exempt Bonds,

generally the sale proceeds of an issue (other than those sale proceeds used to

retire bonds of the issue that are not deposited in a reasonably required reserve or

replacement fund). Proceeds also include any investment proceeds from

investments that accrue during the project period (net of rebate amounts

attributable to the project period). See Regulations section 1.141-1(b).

Professional fundraising services Services performed for the organization requiring the exercise of professional

judgment or discretion consisting of planning, management, preparation of

materials (such as direct mail solicitation packages), provision of advice and

consulting regarding solicitation of contributions, and direct solicitation of

contributions. However, professional fundraising does not include purely

ministerial tasks, such as printing, mailing services, or receiving and depositing

contributions to a charity, such as services provided by a bank or caging service.

Program-related investment Investments made primarily to accomplish the organization’s exempt purposes

rather than to produce income. Examples of program-related investments include

student loans and notes receivable from other exempt organizations that obtained

the funds to pursue the filing organization’s exempt function.

Public charity An organization described in section 501(c)(3) and section 509(a)(1) (which

cross-references sections 170(b)(1)(A)(i) through (vi)), section 509(a)(2), section

509(a)(3), or section 509(a)(4).

Publicly traded securities Generally, include common and preferred stocks, bonds (including governmental

obligations such as bonds and Treasury bills), and mutual fund shares listed and

regularly traded in an over-the-counter market or an established exchange and for

which market quotations are published or are otherwise readily available. (See

further explanation in the instructions for Part IX, line 11, and Schedule M,

Noncash Contributions).

Pull tabs Includes games in which an individual places a wager by purchasing preprinted

cards that are covered with pull tabs. Winners are revealed when the individual

pulls back the sealed tabs on the front of the card and compares the patterns

under the tabs with the winning patterns preprinted on the back of the card.

Included in the definition of pull tabs are “instant bingo,” “mini bingo,” and other

similar scratch-off cards. Satellite, internet, and progressive bingo are games

conducted in many different places simultaneously and the winners are not all

present when the wagers are placed, the winners are determined, and the prizes

are distributed. Revenue and expenses associated with satellite, internet, and

progressive bingo should be included under this category.

Qualified 501(c)(3) bond A tax-exempt bond, the proceeds of which are used by a section 501(c)(3)

organization in furtherance of its charitable purpose. Requirements generally

applicable to a qualified section 501(c)(3) bond under section 145 include:

1. All property financed by the bond issue is to be owned by a section

501(c)(3) organization or a governmental unit; and

2. At least 95% of net proceeds of the bond issue are used either by a

governmental unit or a section 501(c)(3) organization in activities that do not

constitute unrelated trades or businesses (determined by applying section 513).

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Qualified conservation contribution Any contribution of a qualified real property interest exclusively for conservation

purposes. A “qualified real property interest” means any of the following interests

in real property:

1. The entire interest of the donor,

2. A remainder interest,

3. A restriction (such as an easement), granted in perpetuity, on the use which

may be made of the real property.

 A “conservation purpose” means:

1. The preservation of land areas for outdoor recreation by, or the education

of, the general public;

2. The protection of a relatively natural habitat of fish, wildlife, plants, or similar

ecosystems;

3. The preservation of open space (including farm and forest land) where such

preservation is for the scenic enjoyment of the general public or is in accordance

with governmental conservation policy; or

4. The preservation of an historically important land area or a certified historic

structure.

See section 170(h) for additional information, including special rules with respect

to the conservation purpose requirement for buildings in registered historic

districts. See also conservation easement.

Qualified state or local political organization A type of political organization that meets the following requirements:

• It limits its exempt function to the selection process relating solely to any state

or local public office or office in a state or local political organization;

• It is required under a state law to report to a state agency (and does report)

information that otherwise would be required to be reported on Form 8872 or it is

required to report under state law (and does report) at least the following

information:

1. The name and address of every person who contributes a total of $500 or

more during the calendar year and the amount of each contribution;

2. The name and address of every person to whom the organization makes

expenditures aggregating $800 or more during the calendar year, and the amount

of each expenditure; and

3. Any additional information specified in section 527(j)(3), if state law requires

the reporting of that information to the state agency.

• The state agency makes the reports filed by the organization publicly available;

• The organization makes the reports filed with the state agency publicly available

in the manner described in section 6104(d); and

• No federal candidate or office holder controls or materially participates in the

direction of the organization, solicits contributions to the organization, or directs

any of the organization’s disbursements.

Quasi-endowment Funds functioning as an endowment that are established by the organization itself,

either from donor or institutional funds, and which must retain the purpose and

intent as specified by the donor or source of the original funds. See SFAS 117.

Reasonable compensation The value that would ordinarily be paid for like services by like enterprises under

like circumstances.

Reasonable effort For purposes of Part VI, lines 1b and 2; Part VII, Section A (compensation from

related organizations); and Schedule L, Transactions With Interested Persons,

Parts III and IV, a reasonable effort refers to a reasonable amount of effort in

information gathering that the organization is expected to undertake in order to

answer the question. See the specific instructions for Part VI, lines 1b and 2; Part

VII, Section A (compensation from related organizations); and Schedule L,

Transactions With Interested Persons, Parts III and IV, for examples of

reasonable efforts.

Refunding escrow One or more funds established as part of a single transaction or a series of related

transactions, containing proceeds of a refunding issue and any other amounts

to provide for payment of principal or interest on one or more prior issues. See

Regulations section 1.148-1(b).

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Refunding issue An issue of obligations, the proceeds of which are used to pay principal, interest,

or redemption price on another issue (a prior issue), including the issuance costs,

accrued interest, capitalized interest on the refunding issue, a reserve or

replacement fund, or similar costs, if any, properly allocable to that refunding

issue. A current refunding issue is a refunding issue that is issued not more than

90 days before the last expenditure of any proceeds of the refunding issue for the

payment of principal or interest on the prior issue. An advance refunding issue is a

refunding issue that is not a current refunding issue. See Regulations sections

1.150-1(d)(1), 1.150-1(d)(3), and 1.150-1(d)(4).

Related organization An organization that stands in one or more of the following relationships to the

filing organization.

• Parent: an organization that controls (see examples of control in the definition

above) the filing organization.

• Subsidiary: an organization controlled (see examples of control in the definition

above) by the filing organization.

• Brother/Sister: an organization controlled (see examples of control in the

definition above) by the same person or persons that control the filing

organization.

• Supporting/Supported: an organization that is (or claims to be) at any time

during the organization’s tax year (i) a supporting organization of the filing

organization within the meaning of section 509(a)(3), if the filing organization is a

supported organization within the meaning of section 509(f)(3); (ii) or a

supported organization, if the filing organization is a supporting organization.

Religious order An organization described in Rev. Proc. 91-20.

Reportable compensation Compensation that is reported on Form W-2, box 5 (or box 1 if the employee’s

compensation is not reported in box 5), or Form 1099-MISC, box 7, filed for the

calendar year ending with or within the organization’s tax year.

Review of financial statement An examination of an organization’s financial records and practices by an

independent accountant with the objective of assessing whether the financial

statements are plausible, without the extensive testing and external validation

procedures of an audit.

School An organization, the primary function of which is the presentation of formal

instruction, and which has a regular faculty, curriculum, an enrolled body of

students, and a place where educational activities are regularly conducted.

Security/securities Any bond, debenture, note, or certificate or other evidence of indebtedness issued

by a corporation, government or political subdivision, share of stock, voting trust

certificate, or any certificate of interest or participation in, certificate of deposit or

receipt for, temporary or interim certificate for, or warrant or right to subscribe to or

purchase, any of the foregoing.

SFAS 116 Statement of Financial Accounting Standards No. 116, Accounting for

Contributions Received and Contributions Made.

SFAS 117 Statement of Financial Accounting Standards No. 117, Financial Statements of

Not-for-Profit Organizations.

Short accounting period An accounting period of less than 12 months, which exists when an organization

changes its annual accounting period, and which may exist in its initial or final

year of existence (see tax year).

Short period See short accounting period.

Significant disposition of net assets A disposition of net assets, consisting of a sale, exchange, disposition or other

transfer of more than 25% of the fair market value of the organization’s net assets

during the year, regardless of whether the organization received full or adequate

consideration. A significant disposition of net assets involves:

1. One or more dispositions during the organization’s tax year, amounting to

more than 25% of the fair market value of the organization’s net assets as of the

beginning of its tax year; or

2. One of a series of related dispositions or events commenced in a prior year

that, when combined, comprise more than 25% of the fair market value of the

organization’s net assets as of the beginning of the tax year when the first

disposition in the series was made. Whether a significant disposition of net assets

occurred through a series of related dispositions depends on the facts and

circumstances in each case.

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Examples of the types of transactions that are “a significant disposition of net

assets” required to be reported on Schedule N, Liquidation, Termination,

Dissolution or Significant Disposition of Assets, Part II include:

• Taxable or tax-free sales or exchanges of exempt assets for cash or other

consideration (such as a social club described in section 501(c)(7) selling land or

an exempt organization selling assets it had used to further its exempt purposes);

• Sales, contributions or other transfers of assets to establish or maintain a

partnership, joint venture, or a corporation (for-profit or nonprofit) regardless of

whether such sales or transfers are governed by section 721 or section 351,

whether or not the transferor receives an ownership interest in exchange for the

transfer;

• Sales of assets by a partnership or joint venture in which the exempt partner

has an ownership interest;

• Transfers of assets pursuant to a reorganization in which the organization is a

surviving entity; and

• A contraction of net assets resulting from a grant or charitable contribution of

assets to another organization described in section 501(c)(3).

Sponsoring organization Any organization which is all of the following:

• Described in section 170(c), other than governmental units described in section

170(c)(1) and without regard to section 170(c)(2)(A);

• Not a private foundation as defined in section 509(a); and

• Maintains one or more donor advised funds.

State of legal domicile For a corporation, the state of incorporation (country of incorporation for a foreign

corporation formed outside the U.S.). For a trust or other entity, the state whose

law governs the organization’s internal affairs (the foreign country whose law

governs for a foreign organization other than a corporation).

Subordinate organization One of the organizations, typically local in nature, that is recognized as exempt in

a group exemption letter and subject to the general supervision and control of a

central organization.

Supported organization A public charity described in section 509(a)(1) or section 509(a)(2) supported by

a supporting organization described in section 509(a)(3).

Supporting organization A public charity described in section 509(a)(3). A supporting organization is

organized and operated to support supported organizations. Supporting

organizations are classified as either Type I (operated, supervised, or controlled

by one or more supported organizations), Type II (supervised or controlled in

connection with one or more supported organizations), Type III functionally

integrated (operated in connection with one or more supported organizations, if

the supporting organization’s activities perform the functions of or carry out the

purposes of, of such supported organizations, and but for the supporting

organization’s involvement such activities would normally be engaged in by the

supported organizations themselves), or Type III other (operated in connection

with one or more supported organizations and not functionally integrated). A

supporting organization may not be controlled directly or indirectly by one or more

disqualified persons (as defined in section 4946).

Tax-exempt bond An obligation issued by or on behalf of a governmental issuer on which the

interest paid is excluded from the holder’s gross income under section 103. For

this purpose, a bond can be any form of indebtedness under federal tax law,

including a bond, note, loan, or lease-purchase agreement.

Tax year The annual accounting period for which the Form 990 is being filed, whether the

calendar year ending December 31st or a fiscal year ending on the last day of any

other month. The organization may have a short tax year in its first year of

existence, in any year when it changes its annual accounting period (for example,

from a December 31 year-end to a June 30 year-end), and in its last year of

existence (for example, when it merges into another organization or dissolves).

See also current year, fiscal year, and short period.

Term endowment An endowment fund maintained to provide a source of income for either a

specified period of time or until a specific event occurs. See SFAS 117.

Top management official A person who has ultimate responsibility for implementing the decisions of the

organization’s governing body or for supervising the management,

administration, or operation of the organization (for example, the organization’s

CEO or executive director).

Top financial official The person who has ultimate responsibility for managing the organization’s

finances.

Total assets The amount reported on Form 990, Part X, line 16, column (B).

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Trustee See director or trustee.

United States Unless otherwise provided, includes the 50 states, the District of Columbia, the

Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana

Islands, Guam, American Samoa, and the United States Virgin Islands.

Unrelated business See unrelated trade or business.

Unrelated business income Income from an unrelated trade or business as defined in section 513.

Unrelated business gross income Gross income from an unrelated trade or business as defined in section 513.

Unrelated organization An organization that is not a related organization with respect to the filing

organization.

Unrelated trade or business Any trade or business, the conduct of which is not substantially related to the

exercise or performance by the organization of its charitable, educational, or other

purpose or function constituting the basis for its exemption. See Pub. 598 and the

instructions for Form 990-T for a discussion of what is an unrelated trade or

business.

U.S. possession See possession of the United States.

Volunteer A person who serves the organization without compensation. “Compensation” for

this purpose includes tips and noncash benefits, except for:

• Reimbursement of expenses under an accountable plan,

• Working condition fringe benefits described in section 132,

• Liability insurance coverage for acts performed on behalf of the exempt

organization, and

• De minimis fringe benefits.

Voting member of the governing body A member of the organization’s governing body with power to vote on all matters

that may come before the governing body (other than a conflict of interest that

disqualifies the member from voting).

Works of art Includes paintings, sculptures, prints, drawings, ceramics, antiques, decorative

arts, textiles, carpets, silver, photography, film, video, installation and multimedia

arts, rare books and manuscripts, historical memorabilia, and other similar

objects. Art does not include collectibles.

Year of formation The year in which the organization was created or formed under applicable state

law (if a corporation, the year of incorporation).

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Appendix A. Exempt

Organizations Reference

Chart

To determine how the instructions for Form 990 apply to the organization,

an organization must know the Code section under which the organization

is exempt.

Type of Organization I.R.C. Section

Corporations Organized Under Act of Congress 501(c)(1)

Title Holding Corporations 501(c)(2)

Charitable, Religious, Educational, Scientific, etc., Organizations 501(c)(3)

Civic Leagues and Social Welfare Organizations 501(c)(4)

Labor, Agricultural, and Horticultural Organizations 501(c)(5)

Business Leagues, etc. 501(c)(6)

Social and Recreation Clubs 501(c)(7)

Fraternal Beneficiary and Domestic Fraternal Societies and Associations 501(c)(8) & (c)(10)

Voluntary Employees’ Beneficiary Associations 501(c)(9)

Teachers’ Retirement Fund Associations 501(c)(11)

Benevolent Life Insurance Associations, Mutual Ditch or Irrigation 501(c)(12)

Companies, Mutual or Cooperative Telephone Companies, etc.

Cemetery Companies 501(c)(13)

State Chartered Credit Unions, Mutual Reserve Funds 501(c)(14)

Insurance Companies or Associations Other than Life 501(c)(15)

Cooperative Organizations to Finance Crop Operations 501(c)(16)

Supplemental Unemployment Benefit Trusts 501(c)(17)

Employee Funded Pension Trusts (created before 6/25/1959) 501(c)(18)

Organizations of Past or Present Members of the Armed Forces 501(c)(19) & (c)(23)

Black Lung Benefit Trusts 501(c)(21)

Withdrawal Liability Payment Funds 501(c)(22)

Title Holding Corporations or Trusts 501(c)(25)

State-Sponsored Organizations Providing Health Coverage for High-Risk 501(c)(26)

Individuals

State-Sponsored Workmen’s Compensation and Insurance and 501(c)(27)

Reinsurance Organizations

Religious and Apostolic Associations 501(d)

Cooperative Hospital Service Organizations 501(e)

Cooperative Service Organizations of Operating Educational 501(f)

Organizations

Child Care Organizations 501(k)

Charitable Risk Pools 501(n)

Political Organizations 527

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1. Up to a year old and has received, Gross receipts for purposes of Appendix B. How to or donors have pledged to give, $37,500 determining section 501(c)(7) exemption

Determine Whether an or less during its first tax year; are the club’s income from its usual

2. Between 1 and 3 years old and activities and include: Organization’s Gross averaged $30,000 or less in gross • Charges,

Receipts Are Normally receipts during each of its first 2 tax • Admissions,

years; or • Membership fees, $25,000 (or $5,000) or Less 3. Three years old or more and • Dues,

To figure whether an organization has to averaged $25,000 or less in gross • Assessments, and

receipts for the immediately preceding 3 • Investment income (such as dividends, file Form 990-EZ (or Form 990), apply the

$25,000 (or $5,000) gross receipts test tax years (including the year for which the rents, and similar receipts), and normal

(below) using the following definition of return would be filed). recurring capital gains on investments.

gross receipts and information in Figuring If the organization’s gross receipts are Gross receipts for this purpose do not Gross Receipts below. normally $25,000 or less, it must file Form include capital contributions (see

990-N Electronic Notice (e-Postcard) for Regulations section 1.118-1), initiation Gross Receipts Tax-Exempt Organizations Not Required fees, or unusual amounts of income (such

Gross receipts are the total amounts the to File Form 990 or 990-EZ, (with as the sale of the clubhouse).

organization received from all sources exceptions for certain organizations College fraternities or sororities or during its annual accounting period, described in B. General Instructions.) other organizations that charge without subtracting any costs or CAUTION membership initiation fees, but not

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expenses. $5,000 Gross Receipts annual dues, must include initiation fees

Do not use the definition of gross Test in their gross receipts.

receipts described in Appendix C, To determine whether an organization’s Section 501(c)(15). If any section Special Gross Receipts Test for 501(c)(15) insurance company (other CAUTION

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gross receipts are normally $5,000 or Determining Exempt Status of Section less, apply the following test. An than life insurance) normally has gross 501(c)(7) and 501(c)(15) Organizations, organization’s gross receipts are receipts of more than $25,000 for the tax to figure gross receipts for this purpose. considered normally to be $5,000 or less year and meets both parts of the following That test is limited to determining the if the organization is: test, then the company may file Form 990 exempt status of such organizations. (or Form 990-EZ, if applicable). 1. Up to a year old and has received, Gross receipts when acting as an or donors have pledged to give, $7,500 or 1. The company’s gross receipts must

agent. If a local chapter of a section less during its first tax year; be equal to or less than $600,000, and

501(c)(8) fraternal organization collects 2. Between 1 and 3 years old and 2. The company’s premiums must be

insurance premiums for its parent lodge averaged $6,000 or less in gross receipts more than 50% of its gross receipts.

and merely sends those premiums to the during each of its first 2 tax years; or If the company did not meet this test and parent without asserting any right to use 3. Three years old or more and the company is a mutual insurance the funds or otherwise deriving any averaged $5,000 or less in gross receipts company, then it must meet the Alternate benefit from them, the local chapter does for the immediately preceding 3 tax years test to qualify to file Form 990 (or Form not include the premiums in its gross (including the year for which the return 990-EZ, if applicable). Insurance receipts. The parent lodge reports them would be filed). companies that do not qualify as instead. The same treatment applies in tax-exempt must file Form 1120-PC, U.S. other situations in which one organization Appendix C. Special Gross Property and Casualty Insurance collects funds merely as an agent for Company Income Tax Return, or Form another. Receipts Test for 1120, U.S. Corporation Income Tax

Return, as taxable entities for the year. Figuring Gross Receipts Determining Exempt See Notice 2006-42, 2006-19 I.R.B. 878.

Figure gross receipts for Form 990 and Status of Section 501(c)(7) Alternate test. If any section Form 990-EZ as follows. 501(c)(15) insurance company (other and 501(c)(15) Form 990. Gross receipts are the sum of than life insurance) is a mutual insurance

lines 6b (both columns), 7b (both Organizations company and it did not meet the above

columns), 8b, 9b, 10b, and 12, Column A Section 501(c)(7) organizations (social test, then the company must meet both

of Form 990, Part VIII. parts of the following alternate test. clubs) and section 501(c)(15)

Form 990-EZ. Gross receipts are the organizations (insurance companies) 1. The company’s gross receipts must

sum of lines 5b, 6b, 7b, and 9 of Form apply the same gross receipts test as be equal to or less than $150,000, and

990-EZ, Part I. other organizations to determine whether 2. 2. The company’s premiums must

they must file Form 990 or Form 990-EZ. be more than 35% of its gross receipts. Example. Organization M reported However, section 501(c)(7) and section $50,000 as total revenue on line 9 of its If the company does not meet either test, 501(c)(15) organizations are also subject Form 990-EZ. M added back the costs then it must file Form 1120-PC or Form to separate gross receipts tests to and expenses it had deducted on lines 5b 1120 (if the company is not entitled to determine whether they qualify as ($2,000); 6b ($1,500); and 7b ($500) to its insurance reserves) instead of Form 990 tax-exempt for the tax year. The following total revenue of $50,000 and determined or Form 990-EZ. tests use a special definition of gross that its gross receipts for the tax year

were $54,000. receipts for purposes of determining Caution. The alternate test does

whether these organizations are exempt not apply if any employee of the

for a particular tax year. CAUTION mutual insurance company or a

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$25,000 Gross Receipts member of the employee’s family is an Section 501(c)(7). A section 501(c)(7) Test employee of another company that is organization may receive up to 35% of its exempt under section 501(c)(15) (or To determine whether an organization’s gross receipts, including investment would be exempt if this provision did not gross receipts are normally $25,000 or income, from sources outside its apply). less, apply the following test. An membership and remain tax-exempt. Part

organization’s gross receipts are of the 35% (up to 15% of gross receipts) Gross receipts. To determine

considered normally to be $25,000 or less may be from public use of a social club’s whether a section 501(c)(15) organization

if the organization is: facilities. satisfies either of the above tests

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described in Appendix C, figure gross Internal Revenue Service and district offices during regular

receipts by adding: Mail Stop 6716 business hours.

1. Premiums (including deposits and Ogden, UT 84201 • Make each annual information return

assessments) without reduction for return available for a period of 3 years beginning

premiums or premiums paid for The IRS may not disclose portions of an on the date the return is required to be

exemption application relating to any filed (determined with regard to any reinsurance;

2. Gross investment income of a trade secrets, etc. Additionally, the IRS extension of time for filing) or is actually

non-life insurance company (as described generally may not disclose the names filed, whichever is later.

and addresses of contributors. See the • Provide a copy without charge (for in section 834(b)); and

3. Other items that are included in the Instructions for Schedule B (Form 990, Form 990-T, this requirement applies only

990-EZ, or 990-PF) for more information to Forms 990-T filed after August 17, filer’s gross income under Subchapter B,

Chapter 1, Subtitle A of the Code. about the disclosure of that schedule. 2006), other than a reasonable fee for

reproduction and actual postage costs, of Notice 2008-49, 2008-20 I.R.B. 979, This definition does not, however, include all or any part of any application or return provides interim guidance regarding the contributions to capital. For more required to be made available for public requirement that section 501(c)(3) information, see Notice 2006-42. inspection to any individual who makes a organizations and the IRS make available request for such copy in person or in Premiums. Premiums consist of all for public inspection Form 990-T. writing (except as provided in Regulations amounts received as a result of entering Forms 990 or 990-EZ can only be sections 301.6104(d)-2 and -3). into an insurance contract. They are requested for section 527 organizations reported on Form 990, Part VIII

(Statement of Revenue), line 2, or on for tax years beginning after June 30, Definitions

2000. Form 990-EZ, Part I, line 2. Tax-exempt organization is any A return, report, notice, or exemption organization that is described in section Anti-abuse rule. The anti-abuse rule, application may be inspected at an IRS 501(c) or (d) and is exempt from taxation found in section 501(c)(15)(C), explains office free of charge. Copies of these under section 501(a). The term how gross receipts (including premiums) items may also be obtained through the tax-exempt organization also includes any from all members of a controlled group organization as discussed in the following section 4947(a)(1) nonexempt charitable are aggregated in figuring the above section. trust or nonexempt private foundation that tests. is subject to the reporting requirements of

Through the Organization section 6033.

Appendix D. Public Public inspection and distribution of Application for tax exemption

includes: Inspection of Returns certain returns of unrelated business • Any prescribed application form (such income. Section 501(c)(3) organizations Some members of the public rely on Form as Form 1023 or Form 1024), that are required to file Form 990-T after 990, or Form 990-EZ, as the primary or August 17, 2006, must make Form 990-T • All documents and statements the IRS sole source of information about a requires an applicant to file with the form, available for public inspection under particular organization. How the public • Any statement or other supporting section 6104(d)(1)(A)(ii). perceives an organization in such cases document submitted in support of the may be determined by the information Public inspection and distribution of application, and presented on its returns. returns and reports for a political • Any letter or other document issued by organization. Section 527 political An organization’s completed Form the IRS concerning the application. organizations required to file Form 990 or 990, or Form 990-EZ, is available for Application for tax exemption does Form 990-EZ must, in general, make their public inspection as required by section not include: Forms 8871, 8872, 990, or 990-EZ 6104. Schedule B, Schedule of • Any application for tax exemption filed available for public inspection in the same Contributors (Form 990, 990-EZ, or manner as annual information returns of before July 15, 1987, unless the

990-PF) is open for public inspection for organization filing the application had a section 501(c) organizations and section 527 organizations filing Form 990 copy of the application on July 15, 1987; 4947(a)(1) nonexempt charitable trusts or Form 990-EZ. For other organizations • In the case of a tax-exempt are made available. See the public that file Form 990 or Form 990-EZ, parts organization other than a private inspection rules for tax-exempt of Schedule B may be open to public foundation, the name and address of any organizations, later. Generally, Form inspection. Form 990-T filed after August contributor to the organization; or 8871 and Form 8872 are available for 17, 2006, by a 501(c)(3) organization to • Any material that is not available for inspection and printing at www.irs.gov report any unrelated business income, is public inspection under section 6104. under the Charities & Nonprofits tab. also available for public inspection and If there is no prescribed disclosure. Note that a section 527 political application form, see Regulations organization (and an organization CAUTION section 301.6104(d)-1(b)(3)(ii).

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filing Form 990-PF) must disclose

TIP

Through the IRS their Schedule B (Form 990, 990-EZ, or Annual information return includes: Use Form 4506-A to request: 990-PF). See the Instructions for • An exact copy of the Form 990 or Form • A copy of an exempt or political Schedule B. The penalties discussed in 990-EZ filed by a tax-exempt organization organization’s return, report, notice, or General Instructions also apply to section as required by section 6033. exemption application; 527 political organizations (Rev. Rul. • Any amended return the organization • An inspection of a return, report, notice, 2003-49, 2003-201 I.R.B. 903). files with the IRS after the date the or exemption application at an IRS office. Public inspection and distribution of original return is filed.

• An exact copy of Form 990-T if one is The IRS can provide copies of exempt applications for tax exemption and filed by a 501(c)(3) organization. organization returns on a compact disc annual information returns of

(CD). Requesters can order the complete tax-exempt organizations. Under The copy must include all information

set (all Forms 990 and 990-EZ or all Regulations sections 301.6104(d)-1 furnished to the IRS on Form 990, Form

Forms 990-PF filed for a year) or a partial through -3, a tax-exempt organization 990-EZ, or Form 990-T as well as all

set by state or by month. For more must: schedules, attachments and supporting

information on the cost and how to order • Make its application for recognition of documents, except for the name and

CD-ROMs, call the TE/GE Customer exemption and its annual information address of any contributor to the

Account Services toll-free number returns available for public inspection organization. See the Instructions for

(1-877-829-5500) or write to the IRS: without charge at its principal, regional Schedule B (Form 990, 990-EZ, or

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990-PF). However, schedules, • Must allow the individual conducting • Provide such copies to a requester on

attachments, and supporting documents the inspection to take notes freely during the day the request is made, except for

filed with Form 990-T that do not relate to the inspection. unusual circumstances (see below). the imposition of unrelated business • Must allow the individual to photocopy income tax are not required to be made the document at no charge, if the Unusual circumstances. In the case available for public inspection and individual provides photocopying of an in-person request, where unusual copying. See Notice 2008-49, 2008-20

I.R.B. 979. equipment at the place of inspection. circumstances exist so that fulfilling the

request on the same business day Annual returns more than 3 years Organizations that do not maintain causes an unreasonable burden to the

old. An annual information return does permanent offices. A tax-exempt tax-exempt organization, the organization not include any return after the expiration organization with no permanent office: must provide the copies no later than the of 3 years from the date the return is • Must make its application for tax next business day following the day that required to be filed (including any exemption and its annual information the unusual circumstances cease to exist, extension of time that has been granted returns available for inspection at a or the 5th business day after the date of for filing such return) or is actually filed,

whichever is later. reasonable location of its choice. the request, whichever occurs first.

• Must permit public inspection within a If an organization files an amended reasonable amount of time after receiving Unusual circumstances include: return, however, the amended return a request for inspection (normally not must be made available for a period of 3 • Requests received that exceed the more than 2 weeks) and at a reasonable years beginning on the date it is filed with organization’s daily capacity to make time of day. the IRS. copies; • May mail, within 2 weeks of receiving Local or subordinate organizations. the request, a copy of its application for • Requests received shortly before the

For rules relating to annual information tax exemption and annual information end of regular business hours that require

returns of local or subordinate returns to the requester instead of an extensive amount of copying; or organizations, see Regulations section allowing an inspection. • Requests received on a day when the 301.6104(d)-1(f)(2). • May charge the requester for copying organization’s managerial staff capable of

Regional or district offices. A and actual postage costs only if the fulfilling the request is conducting special regional or district office is any office of a requester consents to the charge. duties, such as student registration or tax-exempt organization, other than its attending an off-site meeting or principal office, that has paid employees, An organization that has a permanent convention, rather than its regular whether part-time or full-time, whose office, but has no office hours, or very administrative duties. aggregate number of paid hours a week limited hours during certain times of the are normally at least 120. year, must make its documents available Agents for providing copies. For

A site is not considered a regional or during those periods when office hours rules relating to use of agents to provide district office, however, if: are limited, or not available, as though it copies, see Regulations sections were an organization without a permanent • The only services provided at the site 301.6104(d)-1(d)(1) and (2). office. further exempt purposes (such as day

care, health care or scientific or medical

research); and Request for copies in writing. A

tax-exempt organization must honor a • The site does not serve as an office for Special rules relating to management staff, other than managers written request for a copy of documents

who are involved solely in managing the copies (or the requested part) required under

exempt function activities at the site. Time and place for providing copies section 6104(d) if the request:

in response to requests made in 1. Is addressed to, and delivered by

person. A tax-exempt organization mail, electronic mail, facsimile, or a Special rules relating to must: private delivery service, as defined in public inspection • Provide copies of required documents section 7502(f), to a principal, regional, or

Permissible conditions on public under section 6104(d) in response to a district office of the organization; and

inspection. A tax-exempt organization: request made in person at its principal, 2. Sets forth the address to which the • May have an employee present in the regional and district offices during regular copy of the documents should be sent. room during an inspection. business hours.

Time and Manner of Fulfilling Written Requests.

IF the organization... THEN the organization...

Receives a written request for a copy, Must mail the copy of the requested documents (or the requested parts)

within 30 days from the date it receives the request.

Mails the copy of the requested document, Is deemed to have provided the copy on the postmark date or private

delivery mark (if sent by certified or registered mail, the date of

registration or the date of the postmark on the sender’s receipt).

Requires payment in advance, Is required to provide the copies within 30 days from the date it receives

payment.

Receives a request or payment by mail, Is deemed to have received it 7 days after the date of the postmark,

absent evidence to the contrary.

Receives a request transmitted by electronic mail or facsimile, Is deemed to have received it the day the request is transmitted

successfully.

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IF the organization... THEN the organization...

Receives a written request without payment or with an insufficient Must notify the requester of the prepayment policy and the amount due

payment, when payment in advance is required, within 7 days from the date of the request’s receipt.

Receives consent from an individual making a request, May provide a copy of the requested document exclusively by electronic

mail (the material is provided on the date the organization successfully

transmits the electronic mail.

Request for a copy of parts of a In a case where the requester seeks

document. A tax-exempt organization Documents to be provided inspection, the local or subordinate

must fulfill a request for a copy of the by local and subordinate organization may mail a copy of the

organization’s entire application for tax applicable documents to the requester

exemption or annual information return or organizations within the same time period instead of

any specific part or schedule of its Applications for tax exemption. allowing an inspection. In such a case,

application or return. A request for a copy Except as otherwise provided, a the organization may charge the

of less than the entire application or less tax-exempt organization that did not file requester for copying and actual postage

than the entire return must specifically its own application for tax exemption costs only if the requester consents to the

identify the requested part or schedule. (because it is a local or subordinate charge.

organization covered by a group Fees for copies. A tax-exempt If the local or subordinate organization exemption letter) must, upon request, organization may charge a reasonable receives a written request for a copy of its make available for public inspection, or fee for providing copies. Before the annual information return, it must fulfill the provide copies of, the application organization provides the documents, it request by providing a copy of the group submitted to the IRS by the central or may require that the individual requesting return in the time and manner specified in parent organization to obtain the group copies of the documents pay the fee. If the paragraph earlier, Request for copies exemption letter and those documents the organization has provided an in writing. which were submitted by the central or individual making a request with notice of The requester has the option of parent organization to include the local or the fee, and the individual does not pay requesting from the central or parent subordinate organization in the group the fee within 30 days, or if the individual organization, at its principal office, exemption letter. pays the fee by check and the check does inspection or copies of group returns filed not clear upon deposit, the organization However, if the central or parent by the central or parent organization. The may disregard the request. organization submits to the IRS a list or central or parent organization must fulfill

Form of payment a. Request made directory of local or subordinate such requests in the time and manner

organizations covered by the group specified in the paragraphs, Special rules in person. If a tax-exempt organization exemption letter, the local or subordinate relating to public inspection and Special charges a fee for copying, it must accept

payment by cash and money order for organization is required to provide only rules relating to copies earlier.

requests made in person. The the application for the group exemption Failure to comply. If an organization

organization may accept other forms of ruling and the pages of the list or directory fails to comply with the requirements

payment, such as credit cards and that specifically refer to it. The local or specified in this paragraph, the penalty

personal checks. subordinate organization must permit provisions of sections 6652(c)(1)(C), public inspection, or comply with a 6652(c)(1)(D), and 6685 apply. b. Request made in writing. If a request for copies made in person, within tax-exempt organization charges a fee for a reasonable amount of time (normally Making Applications and copying and postage, it must accept not more than 2 weeks) after receiving a Returns Widely Available payment by certified check, money order, request made in person for public A tax-exempt organization is not required and either personal check or credit card inspection or copies and at a reasonable to comply with a request for a copy of its for requests made in writing. The time of day. See Regulations section application for tax exemption or an annual organization may accept other forms of 301.6104(d)-1(f) for further information. information return if the organization has payment. made the requested document widely Annual information returns. A local Avoidance of unexpected fees. available (see below).

Where a tax-exempt organization does or subordinate organization that does not

file its own annual information return An organization that makes its not require prepayment and a requester application for tax exemption and/or (because it is affiliated with a central or does not enclose payment with a request, parent organization that files a group annual information return widely available an organization must receive consent must nevertheless make the document return) must, upon request, make from a requester before providing copies available for public inspection, or provide available for public inspection as required for which the fee charged for copying and copies of, the group returns filed by the under Regulations section postage exceeds $20. central or parent organization. 301.6104(d)-1(a).

Documents to be provided by A tax-exempt organization makes its regional and district offices. Except as However, if the group return includes application for tax exemption and/or an otherwise provided, a regional or district separate schedules with respect to each annual information return widely available office of a tax-exempt organization must local or subordinate organization included if the organization complies with the satisfy the same rules as the principal in the group return, the local or Internet posting requirements and the office with respect to allowing public subordinate organization receiving the notice requirements given below. inspection and providing copies of its request may omit any schedules relating Internet posting. A tax-exempt application for tax exemption and annual only to other organizations included in the organization can make its application for group return. information returns. tax exemption and/or an annual

A regional or district office is not The local or subordinate organization information return widely available by

required, however, to make its annual must permit public inspection, or comply posting the document on a World Wide

information return available for inspection with a request for copies made in person, Web page that the tax-exempt

or to provide copies until 30 days after the within a reasonable amount of time organization establishes and maintains,

date the return is required to be filed (normally not more than 2 weeks) after or by having the document posted, as

(including any extension of time that is receiving a request made in person for part of a database of similar documents of

granted for filing such return) or is actually public inspection or copies and at a other tax-exempt organizations, on a

filed, whichever is later. reasonable time of day. World Wide Web page established and

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maintained by another entity. The • evidence showing bad faith or information section (if applicable) or in

document will be considered widely deterrence of the organization’s exempt Schedule O (Form 990). For the following

available only if: purpose; lines, however, state “No” if the answer is

• The World Wide Web page through • prior provision of the requested “No” for any of the subordinates to which

which it is available clearly informs documents to the purported harassing the line applies, and explain in Schedule

readers that the document is available group; and O:

and provides instructions for downloading • a demonstration that the organization • Form 990, Part V, lines 1c, 2b, 3b, 5c,

it; routinely provides copies of its documents 6b, 7b, 7g, and 7h.

• The document is posted in a format upon request. • Form 990, Part VI, lines 8a, 8b, 9b,

12b, and 12c. that, when accessed, downloaded, A tax-exempt organization may viewed and printed in hard copy, exactly • Form 990, Schedule C (Political disregard any request for copies of all or Campaign and Lobbying Activities), Part reproduces the image of the application part of any document beyond the first two I-B, lines 3 and 4a. for tax exemption or annual information received within any 30-day period or the • Form 990, Schedule C, Part I-C, line 4. return as it was originally filed with the first four received within any 1-year period IRS, except for any information permitted • Form 990, Schedule C, Part II-A, line from the same individual or the same

by statute to be withheld from public 1j. address, regardless of whether the disclosure; and Director EO Examination (or designee) • Form 990, Schedule C, Part II-B, line

2d. • Any individual with access to the has determined that the organization is • Form 990, Schedule C, Part III-A, lines Internet can access, download, view and subject to a harassment campaign. 1-3. print the document without special A tax-exempt organization may apply • Form 990, Schedule D (Supplemental computer hardware or software required for a determination that it is the subject of for that format (other than software that is Financial Statements), Part I, lines 5 and a harassment campaign and that 6. readily available to members of the public compliance with requests that are part of without payment of any fee) and without • Form 990, Schedule D, Part II, lines 5 the campaign would not be in the public payment of a fee to the tax-exempt and 8. interest by submitting a signed application organization or to another entity • Form 990, Schedule E (Schools), lines to the Director EO Examination (or maintaining the World Wide Web page. 1-4d and 7. designee) for the area where the • Form 990, Schedule F (Statement of Reliability and accuracy. organization’s principal office is located. In order for Activities Outside the United States), Part the document to be widely available In addition, the organization may I, line 1.

through an Internet posting, the entity suspend compliance with any request it • Form 990, Schedule G (Supplemental maintaining the World Wide Web page reasonably believes to be part of the Information Regarding Fundraising or must have procedures for ensuring the harassment campaign until it receives a Gaming Activities), Part III, line 9a. reliability and accuracy of the document response to its application for a • Form 990, Schedule I (Grants and that it posts on the page and must take harassment campaign determination. Other Assistance to Organizations, reasonable precautions to prevent However, if the Director EO Examination Governments and Individuals in the U.S.), alteration, destruction or accidental loss (or designee) determines that the Part I, line 1.

of the document when posted on its page. organization did not have a reasonable • Form 990, Schedule J (Compensation In the event that a posted document is basis for requesting a determination that it Information), Part I, lines 1b and 2. altered, destroyed or lost, the entity must was subject to a harassment campaign or • Form 990, Schedule M (Non-Cash correct or replace the document. reasonable belief that a request was part Contributions), Part I, line 31.

of the campaign, the officer, director, • Form 990, Schedule N (Liquidation, Notice requirement. If a tax-exempt trustee, employee, or other responsible Termination, Dissolution or Significant organization has made its application for individual of the organization remains Disposition of Assets), Part I, lines 3, 5b, tax exemption and/or an annual liable for any penalties for not providing 6, and 7b. information return widely available, it must the copies in a timely fashion. See notify any individual requesting a copy Regulations section 301.6104(d)-3. The following is a list of other special where the documents are available instructions for group returns: (including the address on the World Wide Appendix E. Group 1. Header Item B. Termination. If the Web, if applicable). If the request is made group is terminating its group exemption in person, the organization must provide Returns—Reporting and filing its final group return, do not such notice to the individual immediately. check the termination box. Refer to Rev. If the request is made in writing, the Information on Behalf of Proc. 80-27, 1980-1 C.B. 677, for notice must be provided within 7 days of the Group procedures for terminating the group receiving the request. Except where otherwise instructed, where exemption.

a line calls for a dollar amount or 2. Header Item D. EIN. Use the Tax-exempt Organization numerical data, the central organization special EIN (separate from the central Subject to Harassment organization’s EIN) that is issued solely filing the group return must aggregate the Campaign. data from all the subordinates included in for the purposes of the group return. The

If the Director EO Examination (or the group return and report the aggregate central organization must have received a

designee) determines that the number. For example, in answering Form group ruling before it can file a group

organization is being harassed, a 990, Part I, line 6, the total number of return.

tax-exempt organization is not required to volunteers for all of the subordinate 3. Header Items E, F, J. Enter

comply with any request for copies that it organizations would be reported. information for central organization only.

reasonably believes is part of a 4. Header Item H. Group returns. For purposes of Form 990, Part III, harassment campaign. Enter the four-digit group exemption report on an aggregate basis for the number (GEN). Also, if not all affiliated Whether a group of requests constitutes mission and activities of all of the subordinate organizations are included in a harassment campaign depends on the subordinates (in effect, treating all of the the group return, then attach a list (not in relevant facts and circumstances such as: subordinates as one entity). Schedule O) showing the name, address, • a sudden increase in requests; In general, if a line requires a Yes/No and EIN of each affiliated subordinate • an extraordinary number of requests by answer and the answer is not the same organization included in the group return. form letters or similarly worded for all subordinates to which the line 5. Header Item J. Website. Enter the

correspondence; applies, then state “Yes,”and explain the Website of the central organization (if

• hostile requests; answer in the Schedule’s supplemental any).

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6. Header Item K. Type of 17. Schedule A. Part I. Reason for a related organization is not required to

organization. Check “other” if the group public charity status. If the subordinates be listed in Part II of Schedule R,

has more than one type of organization. do not all have the same public charity however, as described in the instructions

7. Header Item L. Year of formation. status, then check the public charity for Schedule R (Form 990), Part V, the

Leave blank for group return. status box for the largest number of organization must report its transactions

8. Header Item M. State of legal subordinates in the group, and explain on with the related organization in Part V.

domicile. Leave blank for group return. Schedule A, Public Charity Status and

Public Support, Part IV. However, if any 9. Part IV, lines 14b-19, 21-22, and Appendix F. Disregarded section 509(a)(3) organizations are 29 dollar thresholds. Apply the dollar among the subordinates in the group Entities and Joint thresholds with respect to the aggregate return, also answer lines 11e through data for the group as a whole, not Ventures—Inclusion of 11h. subordinate by subordinate.

10. Part IV, line 20. Hospitals. Answer 18. Schedule A. Parts II and III. Activities and Items

Support schedules. Report aggregate “Yes,” if any affiliate included within the

group return operated a hospital facility. data for all subordinates with the public Disregarded Entities charity status corresponding to Parts II or 11. Part VI, line 2. Relationships A disregarded entity, as described in III. among officers, etc. Describe on Regulations sections 301.7701-1 through 19. Schedule B. Contributors. Report Schedule O only relationships between 301.7701-3, is treated as a branch or a consolidated Schedule B for all officers, directors, etc., of the same division of its parent organization for subordinates included in the group return. subordinate organization, not federal tax purposes. Therefore, financial Apply the dollar and percentage relationships between officers, etc., of and other information applicable to a thresholds (including the greater of one subordinate and officers, etc., of disregarded entity must be reported as $5,000 or 2% threshold for organizations another subordinate. the parent organization’s information. described in sections 509(a)(1) and 12. Part VI, line 4. Significant 170(b)(1)(A)(vi)) subordinate by An organization must report in its Form

changes to organizational documents. 990, including Parts VIII through X, all of subordinate, not on a group basis. Report only changes to standardized the revenues, expenses, assets, 20. Schedule C. Part II-A. Lobbying organizational documents maintained by liabilities, and net assets or funds of a expenditures and affiliated groups. the central organization that subordinates disregarded entity of which it is the sole Complete Part II-A, column (b) for the are required to adopt. member. The organization also must group as a whole. In column (a), except 13. Part VI, line 20. Person who report the activities of a disregarded entity on lines g and h, include the amounts that possesses books and records. Identify in the appropriate parts (including apply to all electing members of the group the person who possesses the Schedules) of the Form 990. For if they are included in the group return. If information furnished by the subordinate example, support of a disregarded entity the group return includes organizations organizations used in compiling the group must be taken into account by the filing that belong to more than one affiliated return. organization for purposes of the public group, show in column (b) the totals for all 14. Part VII. Compensation of support tests set forth on Schedule A. such groups. officers, etc. Similarly, political campaign activity or File a single consolidated 21. Schedule D. Part X. Other

Form 990, Part VII showing the officers, lobbying activity conducted by a liabilities. The filing organization may directors, trustees, and key employees of disregarded entity of which the summarize that portion, if any, of the FIN each subordinate included in the group organization is the sole member must be 48 footnote that applies to the liability of reported on Schedule C, Political return, and a single consolidated multiple organizations including the Schedule J, Compensation Information, Campaign and Lobbying Activities. organization (for example, as a member Part II, for all such officers, directors, of a group with consolidated financial The following is a list of special

trustees, and key employees above the statements), to describe the filing instructions for the Form and Schedules

compensation thresholds. Report the five organization’s share of the liability. regarding the reporting of a disregarded

highest compensated employees and 22. Schedule H. Hospitals. Complete entity of which the organization is the sole

independent contractors above $100,000 one Schedule H for all of the hospitals member. These items are described to

for the whole group of subordinates, not operated by subordinates in the group, illustrate special applications of the rule

for each subordinate. If one or more and report aggregate data from all such described above that a disregarded

officers, directors, trustees, key hospitals. entity’s activities and items must be

employees, or highest compensated 23. Schedule J. Compensation from reported on the organization’s Form 990

employees received compensation from and applicable schedules. related organizations. See the Part VII

more than one organization in the group, instructions above. 1. Part I, line 5. Number of the person’s compensation from the 24. Schedule N. Liquidation or employees. See instruction for Part V, several organizations must be reported in significant disposition of assets. lines 1 and 2 below.

column (D). Explain in Schedule N, Part III, which of 2. Part I, line 6. Number of

15. Part VII. Compensation from the subordinates have undergone a volunteers. The total number of

related organizations. Report liquidation, termination, dissolution, or volunteers to be reported may, but is not compensation from an organization that is significant disposition of assets during the required to, include volunteers of any

included in the group ruling but that is not tax year. disregarded entity. among the subordinates included in the 25. Schedule R. Related 3. Part III. Program service group return as compensation from a organizations. See the instructions for accomplishments. Consider activities

related organization in column (E), even if Schedule R regarding determining when and accomplishments of all disregarded the related organization is not required to related organizations of a member of a entities when answering this part. be reported on Schedule R, Related group exemption must be included on 4. Part IV, line 12. Audited financial

Organizations and Unrelated Schedule R. In general, central statement. The organization is not to Partnerships. organizations and subordinate answer “Yes,” to this question merely

16. Part XI, lines 2a and b. Compiled, organizations of a group exemption are because it received an audited statement

reviewed, or audited financial not required to be listed as related of one or more disregarded entities, if the

statements. Answer “Yes” only if all the organizations on Schedule R, Part II; statement of the filing organization was

subordinates in the group had their and all other related organizations of the not audited.

financial statements compiled, reviewed, central organization or of a subordinate 5. Part IV, lines 31-32. Liquidation

or audited individually (rather than on a organization are required to be listed on or significant disposition of assets.

consolidated basis). Schedule R in the applicable part. Even if See instructions for Schedule N, below.

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6. Part IV, lines 35-36. Transactions 14. Schedule N. Liquidation or 5. Part IV, lines 14-16. Activities

with related organizations. See significant disposition of assets. The outside the U.S. See instructions for

instructions for Schedule R, below. Schedule F, below. organization is not to prepare Part I to

7. Part V, lines 1–2. Forms 1096 report a termination, liquidation, or 6. Part IV, lines 17-19. Fundraising

and W-3. The total number of information dissolution of a disregarded entity if the and gaming. See instructions for

returns and employees to be reported, filing organization continues to operate. Schedule G, below.

and compliance with backup withholding Transfers to (or by) a filing organization 7. Part IV, line 20. Hospitals. See

rules, includes all backup withholding, by (or to) its disregarded entity are not to instructions for Schedule H, below.

information returns and employees of any 8. be reported in Part II, but transfers by or Part IV, line 21-22. Grants in the

disregarded entity, regardless of whether contractions of a disregarded entity are to U.S. See instructions for Schedule I,

the disregarded entity has a separate EIN below. be taken into account to determine

for employment tax and information whether a reportable event (based on 9. Part IV, lines 26-28. Loans,

reporting purposes. 25% of the filing organization’s net grants, and business transactions

8. Part V, line 7. Organizations that assets, including those of its disregarded involving interested persons. See

may receive deductible contributions. entities) has occurred. instructions for Schedule L, below.

For purposes of Form 990 reporting, lines 10. 15. Schedule R, Part V, line 2. Part IV, line 32. Disposition of

7a through 7h are to be answered by Transactions with related 25% of assets. See instructions for

taking into account any contributions Schedule N, below. organizations. Specified payments to a made to a disregarded entity. disregarded entity by a controlled entity of 11. Part IV, lines 34-37. Related

9. Part VI, Section A, lines 1-11. the filing organization, and transfers by a organizations and unrelated

Governing body and management. partnerships. See instructions for disregarded entity to an exempt non Members of the governing body, officers, Schedule R, below. charitable entity, are to be reported on directors, trustees, and employees of a 12. Schedule R, Part V, line 2. Part V, line 3a. Unrelated

disregarded entity will not be treated as business income. Include the

governing body members, officers, organization’s share (whether or not

directors, or trustees of the filing distributed) of income or loss of the joint

organization, but such persons may venture that is unrelated business income Joint Ventures Treated as

constitute a key employee or highest in determining the organization’s gross a Partnership for federal compensated employee of the filing unrelated business income.

organization by virtue of compensation income tax purposes 13. Part VI. Governance,

paid by the disregarded entity, or the management, and disclosure. Do not If the organization participates as a person’s responsibilities and authority partner or member of a joint venture, take into account a joint venture for

over operations of the disregarded entity partnership, LLC, or other entity treated purposes of Part VI (except for line 16).

when compared to the filing organization as a partnership for federal tax purposes 14. Part VII. Compensation. See

as a whole. See the instructions for Form instructions for Schedule J, below. (referred to here as a “joint venture”), as 990, Part VII, Section A, Disregarded described in Regulations sections 15. Parts VIII, IX, and X. Financial

entities. 301.7701-1 through 301.7701-3, then the statements. Report in accordance with

10. Part VI, Section B, lines 12–16. organization in general must report the the organization’s books and records.

Policies. The organization is to check activities of the joint venture as its own 16. Part XI. Financial statements and

“Yes,” or “No,” based on the filing activities, to the extent of the reporting. Disregard a joint venture.

organization’s policies, but for each “Yes” organization’s proportionate interest in the 17. Schedule C. Political campaign

response they must report on Schedule O joint venture. For example, a and lobbying activities. Report the

whether the policy applies to all of the organization’s share of political campaign proportionate share of the political organization’s disregarded entities (if or lobbying activities conducted by a joint campaign activity or lobbying activity any). venture. conducted by a joint venture of which the 11. Part VII, line 1a. Definitions of 18. Schedule D, Part II. Conservation organization is a member must be key employee and highest easements. Include conservation reported on Schedule C, Political compensated employee. Officers, Campaign and Lobbying Activities. If the easements held by a joint venture formed

directors, trustees, and employees of a for the purpose of holding such joint venture is a member of a second disregarded entity may constitute a key easements. joint venture, which is a member of a third employee or highest compensated 19. Schedule F. Activities outside joint venture, etc., the activities similarly employee of the filing organization by the U.S. Include activities of a joint pass through all joint ventures to the virtue of compensation paid by the venture, including grants to organizations organization. disregarded entity, or the person’s or individuals outside the U.S.

responsibilities and authority over The following is a list of special 20. Schedule G. Fundraising and

operations of the disregarded entity when gaming. Include activities of a joint instructions for the Form and Schedules

compared to the filing organization as a venture and the organization’s share of regarding the reporting of a joint venture whole. See the instructions for Form 990, of which the organization is a member: revenues and expenses. In Part III, line

Part VII, Section A. 12, check “Yes” if the joint venture was 1. Part I, line 2. Disposition of 25% 12. Part XI, line 3. OMB and Single formed to administer charitable gaming. of assets. See instructions for Schedule Audit Act audits. The organization must 21. Schedule H. Hospitals. See the N, below. check “Yes” if a disregarded entity was instructions for Schedule H to determine 2. Part I, line 7. Unrelated business required to undergo an audit or audits. how to report an organization’s share of a income. Include the organization’s share 13. Schedule L. Transactions with joint venture’s activities and items for (whether or not distributed) of income or interested persons. Reportable purposes of that schedule. loss of the joint venture that is unrelated transactions include transactions 22. Schedule I. Grants in the U.S. business income in determining the involving interested persons who have Include grants from a joint venture to organization’s gross and net unrelated such status because of their relationship organizations, governments, or business income. with a disregarded entity (such as an individuals in the U.S.

employee of the disregarded entity who 23. 3. Part IV, lines 3-5. Political Schedule J. Compensation. If an

qualifies as a key employee of the officer, director, trustee, or employee of campaign and lobbying activities. See

organization as a whole). A transaction the organization receives compensation instructions for Schedule C, below.

between an interested person and a from a joint venture, the compensation is 4. Part IV, line 7. Conservation

disregarded entity of the organization is not treated as paid pro rata by the easements. See instructions for

reportable on Schedule L. organization. The compensation may Schedule D, below.

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need to be reported, however, as filing an annual return under Regulations substantial influence over the affairs of an

compensation from a related organization section 1.6033-2(g)(6). organization. They include:

if the joint venture is a related • Certain foreign organizations. • An employee who receives benefits

organization. An organization is not treated as a section that total less than the highly

24. Schedule K, Part III, line 1. 501(c)(3) or 501(c)(4) organization for any compensated amount ($100,000 in 2007;

Private business use. Report certain period covered by a final determination $105,000 in 2008) and who does not hold

joint ventures that owned property that the organization was not tax-exempt the executive or voting powers just

financed by tax-exempt bonds. under section 501(a), so long as the mentioned; is not a family member of a

25. Schedule L, Parts II-IV. Loans, determination was not based on private disqualified person; and is not a

grants, and business transactions inurement or one or more excess benefit substantial contributor;

involving interested persons. Report transactions. • Tax-exempt organizations described in

loans and grants made to an interested section 501(c)(3); and

person by a joint venture. Also report Disqualified Person • Section 501(c)(4) organizations with

certain joint ventures with interested respect to transactions engaged in with The vast majority of section 501(c)(3) or persons. other section 501(c)(4) organizations. 501(c)(4) organization employees and 26. Schedule N, Part II. Disposition contractors will not be affected by these Who else may be considered a of 25% of assets. In determining whether rules. Only the few influential persons disqualified person? Other persons not the organization made a disposition of

more than 25% of its assets, take into within these organizations are covered by described above can also be considered

these rules when they receive benefits, disqualified persons, depending on all the account its share of dispositions by a joint such as compensation, fringe benefits, or relevant facts and circumstances. venture. contract payments. The IRS calls this 27. Schedule R. Related class of covered individuals disqualified Facts and circumstances tending to organizations. Report relationships with persons. show substantial influence:

certain joint ventures in Parts III and VI, • The person founded the organization. and certain transactions with joint A disqualified person, regarding any • The person is a substantial contributor ventures in Part V. transaction, is any person who was in a to the organization under the section position to exercise substantial influence 507(d)(2)(A) definition, only taking into

Appendix G. Section 4958 over the affairs of the applicable account contributions to the organization tax-exempt organization at any time for the past 5 years. Excess Benefit during a 5-year period ending on the date • The person’s compensation is primarily of the transaction. Persons who hold based on revenues derived from the Transactions certain powers, responsibilities, or activities of the organization that the The intermediate sanction regulations are interests are among those who are in a person controls. important to the exempt organization position to exercise substantial influence • The person has or shares authority to community as a whole, and for ensuring over the affairs of the organization. This control or determine a substantial portion compliance in this area. The rules provide would include, for example, voting of the organization’s capital expenditures, a roadmap by which an organization may members of the governing body, and operating budget, or compensation for steer clear of situations that may give rise persons holding the power of: employees. to inurement. • Presidents, chief executive officers, or • The person manages a discrete chief operating officers. Under section 4958, any disqualified segment or activity of the organization • Treasurers and chief financial officers. person who benefits from an excess that represents a substantial portion of A disqualified person also includes certain benefit transaction with an applicable the activities, assets, income, or family members of a disqualified person, tax-exempt organization is liable for a expenses of the organization, as and 35% controlled entities of a 25% tax on the excess benefit. The compared to the organization as a whole. disqualified person. disqualified person is also liable for a • The person owns a controlling interest

200% tax on the excess benefit if the The following persons are considered (measured by either vote or value) in a

excess benefit is not corrected by a disqualified persons with respect to the corporation, partnership, or trust that is a

certain date. Also, organization managers following organizations, along with certain disqualified person.

who participate in an excess benefit family members and 35% controlled • The person is a nonstock organization

controlled directly or indirectly by one or transaction knowingly, willfully, and entities associated with them:

without reasonable cause are liable for a • With respect to a transaction involving more disqualified persons.

10% tax on the excess benefit, not to a donor advised fund, a donor or donor Facts and circumstances tending to exceed $20,000 for all participating advisor of that donor advised fund, show no substantial influence: managers on each transaction. • With respect to a sponsoring • The person is an independent organization of a donor advised fund, an contractor whose sole relationship to the Applicable Tax-Exempt investment advisor of the sponsoring organization is providing professional organization, and Organization advice (without having decision-making • With respect to a supported authority) with respect to transactions These rules only apply to certain organization of a section 509(a)(3) from which the independent contractor applicable section 501(c)(3) and 501(c)(4) supporting organization, the disqualified will not economically benefit. organizations. An applicable tax-exempt persons of the section 509(a)(3) • The person has taken a vow of poverty. organization is a section 501(c)(3) or a supporting organization. • Any preferential treatment the person section 501(c)(4) organization that is tax Substantial contributors to supporting receives based on the size of the exempt under section 501(a), or was such organizations are also considered person’s donation is also offered to others an organization at any time during a disqualified persons along with their making comparable widely solicited 5-year period ending on the day of the family members and 35% controlled donations. excess benefit transaction. entities. • The direct supervisor of the person is

An applicable tax-exempt organization not a disqualified person. See the instructions for Form 4720, does not include: • The person does not participate in any Schedule I for more information regarding • A private foundation as defined in management decisions affecting the these disqualified persons. section 509(a). organization as a whole or a discrete

• A governmental entity that is exempt Who is not a disqualified person? The segment of the organization that

from (or not subject to) taxation without rules also clarify which persons are not represents a substantial portion of the

regard to section 501(a) or relieved from considered to be in a position to exercise activities, assets, income, or expenses of

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the organization, as compared to the • Family member of a substantial What Is Reasonable organization as a whole. contributor,

What about persons who staff • 35% controlled entity of a substantial Compensation?

affiliated organizations? In the case of contributor, or Reasonable compensation is the

multiple affiliated organizations, the • 35% controlled entity of a family valuation standard that is used to

determination of whether a person has member of a substantial contributor. determine if there is an excess benefit in

substantial influence is made separately Additionally, an excess benefit transaction the exchange of a disqualified person’s for each applicable tax-exempt includes any loans provided by the services for compensation. Reasonable

organization. A person may be a supporting organization to a disqualified compensation is the value that would

disqualified person with respect to more person (other than an organization ordinarily be paid for like services by like than one organizations in the same described in section 509(a)(1), (2), or (4)). enterprises under like circumstances. transaction. This is the section 162 standard that will

A substantial contributor is any person apply in determining the reasonableness Excess Benefit who contributed or bequeathed an of compensation. The fact that a bonus or

aggregate of more than $5,000 to the revenue-sharing arrangement is subject Transaction organization, if that amount is more than to a cap is a relevant factor in determining An excess benefit transaction generally is 2% of the total contributions and bequests the reasonableness of compensation. a transaction in which an economic received by the organization before the For determining the reasonableness of benefit is provided by an applicable end of the tax year of the organization in compensation, all items of compensation tax-exempt organization, directly or which the contribution or bequest is provided by an applicable tax-exempt indirectly, to or for the use of any received by the organization from such organization in exchange for the disqualified person, and the value of the person. A substantial contributor includes performance of services are taken into economic benefit provided by the the grantor of a trust. account in determining the value of applicable tax-exempt organization compensation (except for certain exceeds the value of the consideration The excess benefit for substantial economic benefits that are disregarded, (including the performance of services) contributors and parties related to those as discussed in What benefits are received for providing such benefit, but contributors includes the amount of the disregarded? later). Items of see the special rules below. An excess grant, loan, compensation, or similar compensation include: benefit transaction also can occur when a payment. For additional information, see • All forms of cash and noncash disqualified person embezzles from the the Instructions for Form 4720. compensation, including salary, fees, exempt organization. bonuses, severance payments, and To determine whether an excess When does an excess benefit deferred and noncash compensation. benefit transaction has occurred, all transaction usually occur? For federal • The payment of liability insurance consideration and benefits exchanged income tax purposes, an excess benefit premiums for, or the payment or between a disqualified person and the transaction occurs on the date the reimbursement by the organization of applicable tax-exempt organization, and disqualified person receives the economic taxes or certain expenses under section all entities it controls, are taken into benefit from the organization . However, 4958, unless excludable from income as account. when a single contractual arrangement a de minimis fringe benefit under section provides for a series of compensation For purposes of determining the value 132(a)(4). (A similar rule applies in the payments or other payments to a of economic benefits, the value of private foundation area.) Inclusion in disqualified person during the disqualified property, including the right to use compensation for purposes of person’s tax year, any excess benefit property, is the fair-market value. determining reasonableness under transaction with respect to these Fair-market value is the price at which section 4958 does not control inclusion in payments occurs on the last day of the property, or the right to use property, income for income tax purposes. taxpayer’s tax year. would change hands between a willing • All other compensatory benefits,

buyer and a willing seller, neither being whether or not included in gross income In the case of the transfer of property under any compulsion to buy, sell or for income tax purposes. subject to a substantial risk of forfeiture, transfer property or the right to use • Taxable and nontaxable fringe benefits, or in the case of rights to future property, and both having reasonable except fringe benefits described in section compensation or property, the transaction knowledge of relevant facts. 132. occurs on the date the property, or the Donor advised funds. For a donor • Foregone interest on loans. rights to future compensation or property, advised fund, an excess benefit Written intent required to treat benefits is not subject to a substantial risk of transaction includes a grant, loan, as compensation. An economic benefit forfeiture. Where the disqualified person compensation, or similar payment from is not treated as consideration for the elects to include an amount in gross the fund to a: performance of services unless the income in the tax year of transfer under • Donor or donor advisor, organization providing the benefit clearly section 83(b), the excess benefit • Family member of a donor, or donor indicates its intent to treat the benefit as transaction occurs on the date the advisor, compensation when the benefit is paid. disqualified person receives the economic • 35% controlled entity of a donor or benefit for federal income tax purposes. An applicable tax-exempt organization donor advisor, or (or entity that it controls) is treated as • 35% controlled entity of a family Section 4958 applies only to clearly indicating its intent to provide an member of a donor or donor advisor. post-September 1995 transactions. economic benefit as compensation for The excess benefit in this transaction is Section 4958 applies the general rules to services only if the organization provides the amount of the grant, loan, excess benefit transactions occurring on written substantiation that is

compensation, or similar payment. For or after September 14, 1995. Section contemporaneous with the transfer of the additional information, see the 4958 does not apply to any transaction economic benefits under consideration.

Instructions for Form 4720. occurring pursuant to a written contract Ways to provide contemporaneous

Supporting organizations. For any written substantiation of its intent to that was binding on September 13, 1995,

supporting organization defined in section provide an economic benefit as and at all times thereafter before the

509(a)(3), an excess benefit transaction compensation include: transaction occurs. The special rules

includes grants, loans, compensation, or relevant to transactions with donor • The organization produces a signed

similar payment provided by the written employment contract; advised funds and supporting

supporting organization to a: organizations apply to transactions • The organization reports the benefit as

• Substantial contributor, compensation on an original Form W-2, occurring after August 17, 2006.

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Form 1099, or Form 990, or on an future specified events or contingencies, meeting of the authorized body or 60

amended form filed prior to the start of an as long as no one has discretion when days after the final actions of the

IRS examination; or calculating the amount of a payment or authorized body are taken, and approval

• The disqualified person reports the deciding whether to make a payment of records as reasonable, accurate, and

benefit as income on the person’s original (such as a bonus). complete within a reasonable time

Form 1040 or on an amended form filed thereafter. Treatment as new contract. A binding prior to the start of an IRS examination. written contract providing that it may be Special rebuttable presumption rule Exception. To the extent the economic terminated or cancelled by the applicable for nonfixed payments. As a general benefit is excluded from the disqualified tax-exempt organization without the other rule, in the case of a nonfixed payment, person’s gross income for income tax party’s consent (except as a result of no rebuttable presumption arises until the purposes, the applicable tax-exempt substantial non performance) and without exact amount of the payment is organization is not required to indicate its substantial penalty, is treated as a new determined, or a fixed formula for intent to provide an economic benefit as contract, as of the earliest date that any calculating the payment is specified, and compensation for services. (For example: termination or cancellation would be the three requirements creating the employer provided health benefits, and effective. Also, a contract in which there is presumption have been satisfied. contributions to qualified plans under a material change, which includes an However, if the authorized body approves section 401(a).) extension or renewal of the contract an employment contract with a

What benefits are disregarded? The (except for an extension or renewal disqualified person that includes a resulting from the exercise of an option by following economic benefits are nonfixed payment (for example,

disregarded for purposes of section 4958: the disqualified person), or a more than discretionary bonus) with a specified cap • Nontaxable fringe benefits. An incidental change to the amount payable on the amount, the authorized body may

economic benefit that is excluded from under the contract, is treated as a new establish a rebuttable presumption as to

income under section 132. contract as of the effective date of the the nonfixed payment when the • Benefits to volunteers. An economic material change. Treatment as a new employment contract is entered into by, in

benefit provided to a volunteer for the contract may cause the contract to fall effect, assuming that the maximum

organization if the benefit is provided to outside the initial contract exception, and amount payable under the contract will be

the general public in exchange for a it thus would be tested under the paid, and satisfying the requirements membership fee or contribution of $75 or fair-market value standards of section giving rise to the rebuttable presumption 4958. less per year. for that maximum amount. • Benefits to members or donors. An An IRS challenge to the presumption economic benefit provided to a member Rebuttable Presumption of of reasonableness. The Internal of an organization due to the payment of Reasonableness Revenue Service may refute the a membership fee, or to a donor as a presumption of reasonableness only if it result of a deductible contribution, if a Payments under a compensation develops sufficient contrary evidence to significant number of nondisqualified arrangement are presumed to be rebut the probative value of the persons make similar payments or reasonable and the transfer of property comparability data relied upon by the contributions and are offered a similar (or right to use property) is presumed to authorized body. This provision gives economic benefit. be at fair-market value, if the following taxpayers added protection if they • Benefits to a charitable beneficiary. An three conditions are met. faithfully find and use contemporaneous economic benefit provided to a person 1. The transaction is approved by an persuasive comparability data when they solely as a member of a charitable class authorized body of the organization (or an provide the benefits. that the applicable tax-exempt entity it controls) which is composed of organization intends to benefit as part of Organizations that do not establish a individuals who do not have a conflict of

the accomplishment of its exempt presumption of reasonableness. An interest concerning the transaction.

purpose. organization may still comply with section 2. Prior to making its determination, • Benefits to a governmental unit. A 4958 even if it did not establish a the authorized body obtained and relied transfer of an economic benefit to or for presumption of reasonableness. In some upon appropriate data as to cases, an organization may find it the use of a governmental unit, as defined comparability. There is a special safe impossible or impracticable to fully in section 170(c)(1), if exclusively for harbor for small organizations. If the public purposes. implement each step of the rebuttable organization has gross receipts of less presumption process described above. In Is there an exception for initial than $1 million, appropriate comparability such cases, the organization should try to contracts? Section 4958 does not apply data includes data on compensation paid implement as many steps as possible, in to any fixed payment made to a person by three comparable organizations in the whole or in part, in order to substantiate pursuant to an initial contract. This is a same or similar communities for similar the reasonableness of benefits as timely very important exception, since it would services. and as well as possible. If an organization potentially apply, for example, to all initial 3. The authorized body adequately does not satisfy the requirements of the contracts with new, previously unrelated documents the basis for its determination rebuttable presumption of officers and contractors. concurrently with making that reasonableness, a facts and determination. The documentation should An initial contract is a binding written circumstances approach will be followed, include: contract between an applicable using established rules for determining a. The terms of the approved tax-exempt organization and a person reasonableness of compensation and

who was not a disqualified person transaction and the date approved; benefit deductions in a manner similar to b. The members of the authorized immediately prior to entering into the the established procedures for section body who were present during debate on contract. 162 business expenses. the transaction that was approved and A fixed payment is an amount of cash those who voted on it; or other property specified in the contract, Section 4958 Taxes c. The comparability data obtained or determined by a fixed formula that is and relied upon by the authorized body Tax on disqualified persons. An excise specified in the contract, which is to be and how the data was obtained; tax equal to 25% of the excess benefit is paid or transferred in exchange for the d. Any actions by a member of the imposed on each excess benefit provision of specified services or authorized body having a conflict of transaction between an applicable property. interest; and tax-exempt organization and a

A fixed formula may, in general, e. Documentation of the basis for the disqualified person. The disqualified

incorporate an amount that depends upon determination before the later of the next person who benefited from the

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transaction is liable for the tax. If the 25% professional, the organization manager payment to the disqualified person equal

tax is imposed and the excess benefit relied on the professional’s reasoned to the difference.

transaction is not corrected within the written opinion on matters within the

taxable period, an additional excise tax professional’s expertise or if the manager Churches and Section

equal to 200% of the excess benefit is relied on the fact that the requirements for

imposed. the rebuttable presumption of 4958

reasonableness have been satisfied. The regulations make it clear that the IRS If a disqualified person makes a Participation by an organization manager will apply the procedures of section 7611 payment of less than the full correction is willful if it is voluntary, conscious, and when initiating and conducting any inquiry amount, the 200% tax is imposed only on intentional. An organization manager’s or examination into whether an excess the unpaid portion of the correction participation is due to reasonable cause if benefit transaction has occurred between amount. If more than one disqualified the manager has exercised responsibility a church and a disqualified person. person received an excess benefit from on behalf of the organization with ordinary an excess benefit transaction, all such

disqualified persons are jointly and business care and prudence. Revenue Sharing

severally liable for the taxes. Correcting an Excess Transactions

To avoid the imposition of the 200% Proposed intermediate sanction tax, a disqualified person must correct the Benefit Transaction regulations were issued in 1998. The excess benefit transaction during the A disqualified person corrects an excess proposed regulations had special taxable period. The taxable period begins benefit transaction by undoing the excess provisions covering “any transaction in on the date the transaction occurs and benefit to the extent possible, and by which the amount of any economic ends on the earlier of the date the taking any additional measures necessary benefit provided to or for the use of a statutory notice of deficiency is issued or to place the organization in a financial disqualified person is determined in whole the section 4958 taxes are assessed. position not worse than that in which it or in part by the revenues of one or more This 200% tax may be abated if the would be if the disqualified person were activities of the organization. .” — excess benefit transaction subsequently dealing under the highest fiduciary so-called revenue-sharing transactions. is corrected during a 90-day correction standards. The organization is not Rather than setting forth additional rules period. required to rescind the underlying on revenue-sharing transactions, the final

Tax on organization managers. An agreement; however, the parties may regulations reserve this section.

excise tax equal to 10% of the excess need to modify an ongoing contract with Consequently, until the IRS issues new respect to future payments. benefit may be imposed on the regulations for this reserved section on

participation of an organization manager A disqualified person corrects an revenue-sharing transactions, these

in an excess benefit transaction between excess benefit by making a payment in transactions will be evaluated under the

an applicable tax- exempt organization cash or cash equivalents equal to the general rules (for example, the fair-market

and a disqualified person. This tax, which correction amount to the applicable value standards) that apply to all

may not exceed $20,000 with respect to tax-exempt organization. The correction contractual arrangements between

any single transaction, is only imposed if amount equals the excess benefit plus applicable tax-exempt organizations and

the interest on the excess benefit; the their disqualified persons. the 25% tax is imposed on the

disqualified person, the organization interest rate may be no lower than the

manager knowingly participated in the applicable Federal rate. There is an Revocation of Exemption transaction, and the manager’s anti-abuse rule to prevent the disqualified

participation was willful and not due to person from effectively transferring and Section 4958

reasonable cause. There is also joint and property other than cash or cash Section 4958 does not affect the

several liability for this tax. An equivalents. substantive standards for tax exemption

organization manager may be liable for Exception. For a correction of an under section 501(c)(3) or section

both the tax on disqualified persons and excess benefit transaction described in 501(c)(4), including the requirements that

on organization managers in appropriate Donor advised funds (discussed earlier), the organization be organized and

circumstances. no amount repaid in a manner prescribed operated exclusively for exempt

by the Secretary may be held in a donor purposes, and that no part of its net An organization manager is any advised fund. earnings inure to the benefit of any officer, director, or trustee of an private shareholder or individual. The applicable tax-exempt organization, or Property. With the agreement of the legislative history indicates that in most any individual having powers or applicable tax-exempt organization, a instances, the imposition of this responsibilities similar to officers, disqualified person may make a payment intermediate sanction will be in lieu of directors, or trustees of the organization, by returning the specific property revocation. The IRS has indicated that the regardless of title. An organization previously transferred in the excess following factors will be considered manager is not considered to have benefit transaction. The return of the (among other facts and circumstances) in participated in an excess benefit property is considered a payment of cash determining whether to revoke an transaction where the manager has (or cash equivalent) equal to the lesser of: applicable tax-exempt organization’s opposed the transaction in a manner • The fair market value of the property on exemption status where an excess benefit consistent with the fulfillment of the the date the property is returned to the transaction has occurred: manager’s responsibilities to the organization, or • The size and scope of the organization. For example, a director who • The fair market value of the property on organization’s regular and ongoing votes against giving an excess benefit the date the excess benefit transaction activities that further exempt purposes would ordinarily not be subject to this tax. occurred. before and after the excess benefit

A person participates in a transaction transaction or transactions occurred; Insufficient payment. If the payment

knowingly if the person has actual resulting from the return of the property is • The size and scope of the excess

knowledge of sufficient facts so that, benefit transaction or transactions less than the correction amount, the

based solely upon such facts, the (collectively, if more than one) in relation disqualified person must make an

transaction would be an excess benefit to the size and scope of the additional cash payment to the

organization equal to the difference. transaction. Knowing does not mean organization’s regular and ongoing

having reason to know. The organization Excess payment. If the payment activities that further exempt purposes;

manager ordinarily will not be considered resulting from the return of the property • Whether the organization has been

knowing if, after full disclosure of the exceeds the correction amount described involved in multiple excess benefit

factual situation to an appropriate above, the organization may make a cash transactions with one or more persons;

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• Whether the organization has Schedule F (Form 990). Statement of Form 990-T. Exempt Organization

implemented safeguards that are Activities Outside the United States. Business Income Tax Return. Filed

reasonably calculated to prevent excess separately for organizations with gross Schedule G (Form 990 or 990-EZ). benefit transactions; and income of $1,000 or more from business Supplemental Information Regarding • Whether the excess benefit transaction unrelated to the organization’s exempt Fundraising or Gaming Activities. has been corrected, or the organization purpose. The Form 990-T is also filed to Schedule H (Form 990). Hospitals. has made good faith efforts to seek pay the section 6033(e)(2) proxy tax. For

correction from the disqualified person(s) Form 990, see Part V, line 3 and its Schedule I (Form 990). Grants and

who benefited from the excess benefit instructions; for Form 990-EZ, see Part V, Other Assistance to Organizations,

Governments, and Individuals in the U.S. transaction. line 35 and its instructions.

Schedule J (Form 990). Compensation Form 990-W. Estimated Tax on Appendix H. Forms and Information. Unrelated Business Taxable Income for

Schedule K (Form 990). Supplemental Tax-Exempt Organizations. Publications To File or Use Information on Tax-Exempt Bonds. Form 1023. Application for Recognition Internet. Schedule L (Form 990 or 990-EZ). of Exemption under Section 501(c)(3) of

Transactions With Interested Persons. the Internal Revenue Code. Internet. You can access the IRS

website 24 hours a day, 7 days a Schedule M (Form 990). Noncash Form 1024. Application for Recognition

week, at www.irs.gov Contributions. of Exemption under Section 501(a). to:

• Download forms, instructions, and Schedule N (Form 990 or 990-EZ). Form 1040. U.S. Individual Income Tax

publications. Liquidation, Termination, Dissolution, or Return.

• Order IRS products online. Significant Disposition of Assets. Form 1041. U.S. Income Tax Return for • Research your tax questions online. Schedule O (Form 990). Supplemental Estates and Trusts. Required of section • Search publications online by topic or 4947(a)(1) nonexempt charitable trusts Information to Form 990. keyword. that also file Form 990 or Form 990-EZ. • View Internal Revenue Bulletins (IRBs) Schedule R (Form 990). Related However, if such a trust does not have published in the last few years. Organizations and Unrelated any taxable income under Subtitle A of • Sign up to receive local and national Partnerships. the Code, it can file Form 990, or Form tax news by email. Forms W-2 and W-3. Wage and Tax 990-EZ, and does not have to file Form Statement; and Transmittal of Wage and 1041 to meet its section 6012 filing DVD for tax products. You can Tax Statements. requirement. If this condition is met, order Publication 1796, IRS Tax Form W-9. Request for Taxpayer complete Form 990, or Form 990-EZ, and Products DVD, and obtain: Identification Number and Certification. do not file Form 1041. • Current-year forms, instructions, and

publications. Form 940. Employer’s Annual Federal A section 4947(a)(1) nonexempt

• Prior-year forms, instructions, and Unemployment (FUTA) Tax Return. charitable trust that normally has gross

publications. receipts of not more than $25,000 (see Form 941. Employer’s QUARTERLY • Tax Map: an electronic research tool the gross receipts discussion in Appendix Federal Tax Return. Used to report social and finding aid. B) and has no taxable income under security, Medicare, and income taxes • Tax law frequently asked questions. Subtitle A must complete Part V, line 12 withheld by an employer and social • Tax Topics from the IRS telephone and the signature block on page 1 of the security and Medicare taxes paid by an response system. Form 990. On the Form 990-EZ, complete employer. • Internal Revenue Code—Title 26 of the line 43 and the signature block on page 4 Form 943. Employer’s Annual Federal U.S. Code. of the return. In addition, complete only Tax Return for Agricultural Employees. • Fill-in, print, and save features for most the following items in the heading of Form

Trust Fund Recovery Penalty. If 990 or Form 990-EZ: tax forms.

• certain excise, income, social security, Internal Revenue Bulletins.

• Toll-free and email technical support. and Medicare taxes that must be Item

• Two releases during the year. collected or withheld are not collected or A Tax year (fiscal year or short period, if

withheld, or these taxes are not paid to applicable) – The first release will ship the the IRS, a Trust Fund Recovery Penalty B Applicable checkboxes beginning of January 2009. may apply. The Trust Fund Recovery C Name, DBA, and address – The final release will ship the D Employer identification number (EIN) beginning of March 2009. Penalty may be imposed on all persons I Section 4947(a)(1) nonexempt charitable (including volunteers) who the IRS Purchase the DVD from National trust box determines were responsible for Technical Information Service (NTIS) at collecting, accounting for, and paying Form 1096. Annual Summary and www.irs.gov/cdorders for $30 (no over these taxes, and who acted willfully Transmittal of U.S. Information Returns. handling fee) or call 1-877-233-6767 toll in not doing so. Form 1098 series. Information returns free to buy the DVD for $30 (plus a $6

handling fee). This penalty does not apply to to report mortgage interest, student loan

volunteer unpaid members of any board interest, qualified tuition and related

Other Forms That May Be of trustees or directors of a tax-exempt expenses received, and a contribution of

Required organization, if these members are solely a qualified vehicle that has a claimed

serving in an honorary capacity, do not value of more than $500. Schedule A (Form 990 or 990-EZ). participate in the day-to-day or financial Form 1099 series. Information returns Public Charity Status or Public Support. activities of the organization, and do not to report acquisitions or abandonments of Schedule B (Form 990, 990-EZ, or have actual knowledge of the failure to secured property, proceeds from broker 990-PF). Schedule of Contributors. collect, account for, and pay over these and barter exchange transactions, taxes. However, the preceding sentence Schedule C (Form 990 or 990-EZ). cancellation of debt, dividends and does not apply if it results in no person Political Campaign and Lobbying distributions, certain government and being liable for the penalty. Activities. state qualified tuition program payments,

The penalty is equal to the unpaid trust taxable distributions from cooperatives, Schedule D (Form 990). Supplemental fund tax. See Pub. 15 (Circular E), interest payments, payments of long-term Financial Statements. Employer’s Tax Guide, for more details, care and accelerated death benefits,

Schedule E (Form 990 or 990-EZ). including the definition of responsible miscellaneous income payments,

Schools. persons. distributions from an HSA, Archer MSA or

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Medicare Advantage MSA, original issue Form 8300. Report of Cash Payments Publication 538. Accounting Periods

discount, distributions from pensions, Over $10,000 Received in a Trade or and Methods.

annuities, retirement or profit-sharing Business. Used to report cash amounts in Publication 557. Tax-Exempt Status for plans, IRAs, insurance contracts, etc., excess of $10,000 that were received in a Your Organization. and proceeds from real estate single transaction (or in two or more Publication 561. Determining the Value transactions. Also, use certain of these related transactions) in the course of a of Donated Property. returns to report amounts that were trade or business (as defined in section Publication 598. Tax on Unrelated received as a nominee on behalf of 162). Business Income of Exempt another person. However, if the organization receives a Organizations. Form 1120-POL. U.S. Income Tax charitable cash contribution in excess of Publication 892. Exempt Organization Return for Certain Political Organizations. $10,000, it is not subject to the reporting Appeal Procedures for Unagreed Issues. requirement since the funds were not Form 1128. Application To Adopt, received in the course of a trade or Publication 910. IRS Guide to Free Tax Change, or Retain a Tax Year. business. Services.

Form 2848. Power of Attorney and Form 8328. Carryforward Election of Publication 946. How To Depreciate Declaration of Representative. Unused Private Activity Bond Volume Property.

Form 3115. Application for Change in Cap. Publication 1771. Charitable Accounting Method. Form 8718. User Fee for Exempt Contributions—Substantiation and

Form 4506. Request for Copy of Tax Organization Determination Letter Disclosure Requirements.

Return. Request. Publication 1828. Tax Guide for

Form 4506-A. Request for Public Form 8821. Tax Information Churches and Religious Organizations.

Inspection or Copy of Exempt or Political Authorization. Publication 3079. Gaming Publication Organization IRS Form. for Tax-Exempt Organizations. Form 8822. Change of Address. Used to

Form 4562. Depreciation and notify the IRS of a change in mailing Publication 3386. Tax Guide for

Amortization. address that occurs after the return is Veterans Organizations.

Form 4720. Return of Certain Excise filed. Publication 3833. Disaster Relief,

Taxes on Charities and Other Persons Form 8868. Application for Extension of Providing Assistance Through Charitable

Under Chapters 41 and 42 of the Internal Time To File an Exempt Organization Organizations.

Revenue Code. Return. Publication 4220. Applying for 501(c)(3)

Form 5500. Annual Return/Report of Form 8870. Information Return for Tax-Exempt Status.

Employee Benefit Plan. Employers who Transfers Associated With Certain Publication 4221-PC. Compliance

maintain pension, profit-sharing, or other Personal Benefit Contracts. Used to Guide for 501(c)(3) Public Charities.

funded deferred compensation plans are identify those personal benefit contracts Publication 4221-PF. Compliance generally required to file the Form 5500. for which funds were transferred to the Guide for 501(c)(3) Private Foundations. This requirement applies whether or not organization, directly or indirectly, as well Publication 4302. A Charity’s Guide to the plan is qualified under the Internal as the transferors for, and beneficiaries Vehicle Donations. Revenue Code and whether or not a of, those contracts.

deduction is claimed for the current tax Publication 4303. A Donor’s Guide to Form 8871. Political Organization Notice Vehicle Donations. year. of Section 527 Status.

Publication 4630. Exempt Form 5578. Annual Certification of Form 8872. Political Organization Organizations Products and Services Racial nondiscrimination for a Private Report of Contributions and Expenditures. Navigator. School Exempt From Federal income Form 8886. Form 8886, Reportable Tax. Transaction Disclosure Statement. Appendix I. Use of Form Form 5768. Election/Revocation of Form 8886-T. Disclosure by Tax-Exempt Election by an Eligible Section 501(c)(3) 990 or Form 990-EZ To Entity Regarding Prohibited Tax Shelter Organization To Make Expenditures To Transaction. Satisfy State Reporting Influence Legislation.

Form 7004. Application for Automatic Form 8899. Notice of Income From Requirements Donated Intellectual Property. Used to Extension of Time to File Corporation Some states and local government units report net income from qualified Income Tax Return. intellectual property to the IRS and the will accept a copy of Form 990 or 990-EZ

Form 8038 in place of all or part of their own financial series. Tax Exempt Bonds. donor.

report forms. The substitution applies Form 8274. Certification by Churches Form 8921. Applicable Insurance primarily to section 501(c)(3) and Qualified Church-Controlled Contracts Information Return. organizations, but some other types of Organizations Electing Exemption from Form SS-4. Application for Employer section 501(c) organizations are also Employer Social Security and Medicare Identification Number. affected. If the organization uses Form Taxes. Form TD F 90-22.1. Report of Foreign 990 or 990-EZ to satisfy state or local

Form 8282. Donee Information Return. Bank and Financial Accounts. filing requirements, such as those under

Required of the donee of charitable state charitable solicitation acts, note the

deduction property who sells, exchanges, Helpful Publications following discussions.

or otherwise disposes of donated property Publication 15. Circular E, Employer’s Determine state filing requirement. within 3 years after receiving it. The form Tax Guide. The organization may consult the is also required of any successor donee Publication 15-A. Employer’s appropriate officials of all states and other who disposes of the charitable deduction Supplemental Tax Guide (Fringe jurisdictions in which it does business to property within 3 years after the date that Benefits). determine their specific filing the donor gave the property to the original requirements. Doing business in a donee. It does not matter who gave the Publication 463. Travel, Entertainment, jurisdiction may include any of the property to the successor donee. It may Gift, and Car Expenses. following: have been the original donee or another Publication 525. Taxable and • Soliciting contributions or grants by successor donee. Nontaxable Income. mail or otherwise from individuals,

Form 8283. Noncash Charitable Publication 526. Charitable businesses, or other charitable

Contributions. Contributions. organizations;

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• Conducting programs; with the Form 990 or 990-EZ filed with the states and the IRS do not permit the

• Having employees within that IRS. inclusion of those amounts in Parts VIII

jurisdiction; Even if the Form 990 or 990-EZ that and IX of Form 990 or Part I of Form

• Maintaining a checking account; or 990-EZ. The optional reporting of donated the organization files with the IRS is • Owning or renting property there. services and facilities is discussed in the accepted by the IRS as complete, a copy

Monetary tests may differ. Some or all of the same return filed with a state will instructions for Part III for both Form 990

of the dollar limitations applicable to Form not fully satisfy that state’s filing and Form 990-EZ.

990 or 990-EZ when filed with the IRS requirement if (1) required information is Amended returns. If the organization

may not apply when using Form 990 or submits supplemental information or files not provided, including any of the

990-EZ in place of state or local report an amended Form 990 or 990-EZ with the additional information discussed above,

forms. Examples of the IRS dollar IRS, it must also send a copy of the or (2) the state determines that the form

limitations that do not meet some state information or amended return to any was not completed by following the

requirements are the normally $25,000 state with which it filed a copy of Form applicable Form 990 or 990-EZ

gross receipts minimum that creates an 990 or 990-EZ originally to meet that instructions or supplemental state

obligation to file with the IRS and the state’s filing requirement. If a state instructions. In such case, the state may

$100,000 minimum for listing independent requires the organization to file an ask the organization to provide the

contractors on Form 990, Part VII, amended Form 990 or 990-EZ to correct missing information or to submit an

Section B. amended return. conflicts with the Form 990 or 990-EZ

Additional information may be Use of audit guides may be required. instructions, the organization must also

file an amended return with the IRS. required. State or local filing To ensure that all organizations report

requirements may require the similar transactions uniformly, many Method of accounting. Most states

organization to attach to Form 990 or require that all amounts be reported states require that contributions, gifts,

990-EZ one or more of the following: based on the accrual method of grants, etc., and functional expenses be

• Additional financial statements, such as accounting. See also reported according to the AICPA industry General Instruction

a complete analysis of functional audit and accounting guide, Not-for-Profit D.

expenses or a statement of changes in Organizations (New York, NY, AICPA, Time for filing may differ. The deadline

net assets; 2003), supplemented by Standards of for filing Form 990 or 990-EZ with the IRS • Notes to financial statements; Accounting and Financial Reporting for differs from the time for filing reports with • Additional financial schedules; Voluntary Health and Welfare some states. • A report on the financial statements by Organizations (Washington, DC, National Public inspection. The Form 990 or an independent accountant; and Health Council, Inc., 1998, 4th edition). 990-EZ information made available for • Answers to additional questions and Donated services and facilities. Even public inspection by the IRS may differ other information. though reporting donated services and from that made available by the states, Each jurisdiction may require the facilities as items of revenue and expense such as Schedule B (Form 990, 990-EZ, additional material to be presented on is called for in certain circumstances by or 990-PF). forms they provide. The additional the two publications named above, many information does not have to be submitted

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Index

Audit committee . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Donor advised funds . . . . . . . . . . . . . . . . . . . . 65

$10,000–per-item exception . . . . . . . . . . . . . . 21 Audit guides . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Government . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

$10,000–per-related organization Audited financial statement . . . . . . . . . . . . . . . . 11 Government grants . . . . . . . . . . . . . . . . . . . . . 30

exception . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Grants .................................. 2

Membership dues ................... 10, 29 35% controlled entity . . . . . . . . . . . . . . . . . . . . . 14 B Noncash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Backup withholding . . . . . . . . . . . . . . . . . . . . . . . 13 Nondeductible . . . . . . . . . . . . . . . . . . . . . . . . . 13

A Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Quid pro quo . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Bank account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Sponsoring organization . . . . . . . . . . . . . . . . 14 Accountable plan . . . . . . . . . . . . . . . . . . . . . . . . . 16 Substantiation and disclosure . . . . . . . . . . . 13 Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Bank or financial institution trustee

exception . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Contributor ................................ 3 Accounting ................................ 4

Benefits ................................... 4 Contributors, Schedule of . . . . . . . . . . . . . . . . . 30 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Method Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Period .................................. 5 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Controlled entity . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Accounting fees Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Controlling organization: . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Accounting method Benefits, Members . . . . . . . . . . . . . . . . . . . . . . . 66 Section 512(b)(13) . . . . . . . . . . . . . . . . . . . 4, 12 . . . . . . . . . . . . . . . . . . . . . . . 39

Accounting period Bingo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Cooperative service organizations .......... 4 . . . . . . . . . . . . . . . . . . . . . . . 5, 8

Accounts payable Black lung benefit trust ..................... 5 Copies .................................... 7 . . . . . . . . . . . . . . . . . . . . . . . . 38

Accounts receivable Bond issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Corporation ............................... 9 . . . . . . . . . . . . . . . . . . . . . . 37

Accrual Bonds, tax-exempt . . . . . . . . . . . . . . . . . . . . . . . 38 Credit counseling . . . . . . . . . . . . . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Activities Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Custodial arrangements .................... 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Activities Outside the United States . . . . . . . . 68

Books and records ........................ 5 Address:

Books of account .......................... 6 D Change in .............................. 8 De minimis fringe benefit . . . . . . . . . . . . . . . . . . 65 Website ................................ 9 Branches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Debt management plan services . . . . . . . . . . . 11 Administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Defeasance escrow . . . . . . . . . . . . . . . . . . . . . . 31 Advance ruling period ...................... 5 Business activities . . . . . . . . . . . . . . . . . . . . . . . . 30

Deferred charges . . . . . . . . . . . . . . . . . . . . . . . . . 38 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Business code . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Deferred compensation . . . . . . . . . . . . . . . . . . . 69 Affiliate/affiliates ....................... 36, 63 Business leagues .......................... 1

Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . 38 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Business relationship . . . . . . . . . . . . . . . . . . . . . 16

Payments Defined benefit plan . . . . . . . . . . . . . . . . . . . . . . 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Purchases Nonqualified . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

State or national organizations C Qualified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 . . . . . . . . . . 36

Affiliated organizations Calendar year ............................. 5 Defined contribution plan: . . . . . . . . . . . . . . . . . . . . 65

Capital contributions . . . . . . . . . . . . . . . . . . . . . . 15 Nonqualified . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Allocations:

Capital gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Qualified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Grants, and . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Capital stock accounts . . . . . . . . . . . . . . . . . . . . 39 Dependent care assistance . . . . . . . . . . . . . . . 27 Alternate test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Amended Return .......................... 8

Description of amendment Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Determination letter . . . . . . . . . . . . . . . . . . . . . . . 69 ............... 6

Name change amendment ............... 6 Cash receipts and disbursements .......... 6 Direct expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Annual information return . . . . . . . . . . . . . . . . . 58 Central organization ....................... 7 Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Anti-abuse rule . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Director or trustee . . . . . . . . . . . . . . . . . . . . . . . . 20

Appendix: Change of address . . . . . . . . . . . . . . . . . . . . . 8, 69 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Appendix A, Exempt Organization Reference Change of name (see ‘‘name change’’) ..... 8 Conflict of interest . . . . . . . . . . . . . . . . . . . . . . 18

Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Disqualified person(s) . . . . . . . . . . . . . . . . . . 16 Changes in net assets . . . . . . . . . . . . . . . . . . . . 70

Appendix B, How to Determine Whether an Excess business holdings . . . . . . . . . . . . . . . 14 Chapters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Organization’s Gross Receipts Are Section 501(c)(3) organizations .......... 2 Charitable risk pools ....................... 4 Normally $25,000 (or $5,000) or Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Charity care policy . . . . . . . . . . . . . . . . . . . . . . . . 10 Less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Disclosure of Excess Business Child care organizations ................... 4 Appendix C, Special Gross Receipts Test for Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Determining Exempt Status of Section Children .................................. 3 Disclosure statement:

501(c)(7) and 501(c)(15) Church ................................... 4 Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Organizations . . . . . . . . . . . . . . . . . . . . . . . . 57 Church-affiliated organization .............. 4 Disqualified persons . . . . . . . . . . . . . . . . . . . . . . 64

Appendix D, Public Inspection of Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Disregarded benefits . . . . . . . . . . . . . . . . . . . . . . 24

Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Code(s) ................................... 4 Disregarded entities . . . . . . . . . . . . . . . . 8, 22, 62 Appendix E, Section 4958 Excess Benefit College . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 61 Committee ................................ 5 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Appendix F, Forms and Publications to File

or Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Compensation ................. 12, 20, 28, 62 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Current officers . . . . . . . . . . . . . . . . . . . . . . . . . 35 Appendix G, Use of Form 990 or Form Document retention and destruction Disqualified persons ................. 20, 35 990–EZ to Satisfy State Reporting policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Former officers . . . . . . . . . . . . . . . . . . . . . . . . . 20 Requirements . . . . . . . . . . . . . . . . . . . . . . . . 64 Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Other persons . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Applicable tax-exempt organization . . . . . . . . 64 Of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Reasonable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Application for recognition of exemption Of use of materials, equipment or . . . . 68 Reportable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Application pending ........................ 8 Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Of vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Art . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Compilation (compiled financial Donor advised fund(s): Articles of incorporation . . . . . . . . . . . . . . . . . . . 17 statements) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Disqualified person . . . . . . . . . . . . . . . . . . . . . 64 Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Completing the heading .................... 8 Donor advisor . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Asset(s): Conflicts of interest policy .............. 17, 18 Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Conservation easement . . . . . . . . . . . . . . . . . . . 11 Excess benefit transaction . . . . . . . . . . . . . . 65 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Contemporaneous . . . . . . . . . . . . . . . . . . . . . . . . 65 Excess business holdings . . . . . . . . . . . . . . . 14

Assistance to individuals . . . . . . . . . . . . . . . . . . 34 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Association ............................... 9 Contributions ...................... 11, 29, 30 Sponsoring organization ................. 4

Attachments .............................. 8 Disclosure statement . . . . . . . . . . . . . . . . . . . 14 Donor Contributions:

Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Donation of services . . . . . . . . . . . . . . . . . . . . 29 Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . 14

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Dues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Final return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 8 Form 8871, Political Organization Notice of

Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Financial account . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 527 Status . . . . . . . . . . . . . . . . . . . 69

Membership ........................ 31, 36 Form 8872, Political Organization Report of Financial statements . . . . . . . . . . . . . . . . . . . . . . 39

Paid to affiliates . . . . . . . . . . . . . . . . . . . . . . . . 36 Contributions and Expenditures . . . . . . . 69 Fiscal year ................................ 5 Form 8886, Reportable Transaction Five highest compensated employees . . . . . 20 Disclosure Statement . . . . . . . . . . . . . . . . . 69 Fixed Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 E Form 8886–T, Disclosure by Tax-Exempt

Economic benefit . . . . . . . . . . . . . . . . . . . . . . . . . 65 Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Entity Regarding Prohibited Tax Shelter

Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Nontaxable fringe benefits . . . . . . . . . . . . . . 66 Activities ................................ 2 Form 8899, Notice of Income from Donated

Electronic filing ............................ 6 Organization ............................ 5 Intellectual Property . . . . . . . . . . . . . . . . . . 69

Former officers, directors, trustees, and key Form 8921, Applicable Insurance Contracts Email subscription ......................... 3 employees .............................. 2 Information Return . . . . . . . . . . . . . . . . . . . 69 Employee benefit plan ..................... 5 Forms: Form 941, Employer’s Quarterly and Federal Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . 35 Form 1023, Application for Recognition of Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Employee(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Form 943, Employer’s Annual Tax Return for Employees, key . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Form 1024, Application for Recognition of Agricultural Employees . . . . . . . . . . . . . . . 68

Employer identification number (EIN): Exemption Under Section 501(a) . . . . . . 68 Form 990–BL, Information and Initial Excise

Disregarded entities . . . . . . . . . . . . . . . . . . . . 63 Form 1041, U.S. Income Tax Return for Tax Return for Black Lung Benefit Trusts

Section 501(c)(9) organizations .......... 8 Estates and Trusts . . . . . . . . . . . . . . . . . . . 68 and Certain Related Persons .......... 5

Employment tax return ..................... 6 Form 1065, U.S. Return of Partnership Form 990–EZ, Short Form Return of

Endowment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 income ............................... 5 Organization Exempt From Income

Form 1096, Annual Summary and Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 e-Postcard (see also Form 990–N) . . . . . . . . 57

Transmittal of U.S. Information Form 990–N, Electronic Notice (e-Postcard) Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Returns for Tax-Exempt Organizations not Escrow or custodial account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 . . . . . . . . . . . . . . . 38

Form 1098 series Required to File Form 990 or . . . . . . . . . . . . . . . . . . . . . . 68 Estates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 990–EZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Form 1099–MISC, Miscellaneous Estimate, reasonable ...................... 9 Form 990–PF, Return of Private Foundation Income ............................... 2 Excess benefit transaction ............. 64, 65 or Section 4947(a)(1) Nonexempt Form 1120–POL, U.S. Income Tax Return Churches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Charitable Trust Treated as a Private for Certain Political Organizations . . . . . 69 Correction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Foundation ........................... 5 Form 1128, Application To Adopt, Change or Donor advised funds . . . . . . . . . . . . . . . . . . . . 67 Form 990–T, Exempt Organization Business Retain a Tax Year . . . . . . . . . . . . . . . . . . . . 69 Excess payment . . . . . . . . . . . . . . . . . . . . . . . 67 Income Tax Return . . . . . . . . . . . . . . . . . . . 68 Form 2848, Power of Attorney and Excise tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Form Annual Certification of Racial Declaration of Representative . . . . . . . . . 69 Insufficient payment . . . . . . . . . . . . . . . . . . . . 67 nondiscrimination for a Private School Form 3115, Application for Change in Revenue sharing transactions . . . . . . . . . . . 67 Exempt From Federal income Tax. . . . . 69 Accounting Method . . . . . . . . . . . . . . . . . . . 69 Revocation of Exemption . . . . . . . . . . . . . . . 67 Form SS-4, Application for Employer Form 4506, Request for Copy of Tax Section 4958 . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Identification Number . . . . . . . . . . . . . . . . . 69 Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Excess business holdings . . . . . . . . . . . . . . . . . 14 Form TD F 90–22.1, Report of Foreign Bank Form 4506–A, Request for Public Inspection Excise taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 and Financial Accounts . . . . . . . . . . . . . . . 69 or Copy of Exempt or Political Executive director . . . . . . . . . . . . . . . . . . . . . . . . 19 Form W-2, Wage and Tax Statement . . . . 68 Organization IRS Form . . . . . . . . . . . . . . . 69

Exempt function . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Forms and publications . . . . . . . . . . . . . . . . . . . 13 Form 4562, Depreciation and

Exempt organizations, types of . . . . . . . . . . . . 56 Amortization Foundations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 . . . . . . . . . . . . . . . . . . . . . . . . . 69

Exempt purposes .................. 10, 17, 33 Form 4720, Return of Certain Excise Taxes Fringe benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

on Charities and Other Persons Under De minimis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Chapters 41 and 42 of the Internal Nontaxable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Allocating indirect . . . . . . . . . . . . . . . . . . . . . . 33

Direct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Revenue Code . . . . . . . . . . . . . . . . . . . . . . . 69 Functional expenses . . . . . . . . . . . . . . . . . . . . . . 33

Functional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Form 5500, Annual Return/Report of Allocating indirect . . . . . . . . . . . . . . . . . . . . . . 33

Fundraising ......................... 32, 33 Employee Benefit Plan . . . . . . . . . . . . . . . 69 Fundraising . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Indirect Expenses . . . . . . . . . . . . . . . . . . . . . . 33 Form 5768, Election/Revocation of Election Management and general . . . . . . . . . . . . . . . 33

Management and general . . . . . . . . . . . . . . . 33 by an Eligible Section 501(c)(3) Program service . . . . . . . . . . . . . . . . . . . . . . . . 33

Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Organization To Make Expenditures To Fund Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Political . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Influence Legislation . . . . . . . . . . . . . . . . . 69 Fundraising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Postage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Form 7004, Application for Automatic Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Extension of Time to File Corporation Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Program service ..................... 33, 37 Expenses Income Tax Return . . . . . . . . . . . . . . . . . . . 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Form 8038 series, Tax Exempt Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Records for tax deductible

Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Form 8274, Certification by Churches and contributions .......................... 7

Extension of Time to File ................... 6 Qualified Church-Controlled Organizations Fundraising activities . . . . . . . . . . . . . . . . . . . . . 32

Electing Exemption from Employer Social Fundraising events . . . . . . . . . . . . . . . . . . . . . . . 32

Security and Medicare Taxes . . . . . . . . . 69 Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

F Form 8282, Donee Information

Facility/facilities . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Facts and circumstances . . . . . . . . . . . . . . . . . . 61 Form 8283, Noncash Charitable G

Fair market value . . . . . . . . . . . . . . . . . . . . . . . . . 65 Contributions . . . . . . . . . . . . . . . . . . . . . . . . 69 Gaming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Family: Form 8300, Report of Cash Payments Over GEN (Group exemption number) ........... 9 $10,000 Received in a Trade or Family member . . . . . . . . . . . . . . . . . . . . . . . . 64 Generally accepted accounting Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Federal unemployment tax (FUTA) . . . . . . . . 68 principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Form 8328, Carryfoward Election of Unused Federated fundraising agencies . . . . . . . . . . . 29 Gifts .................................. 29, 30 Private Activity Bond Volume Cap . . . . . 69

Federated fundraising organizations . . . . . . . 34 Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Form 8718, User Fee for Exempt Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Goods or services . . . . . . . . . . . . . . . . . . . . . . 32 Organization Determination Letter Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Goods sold, cost of . . . . . . . . . . . . . . . . . . . . . 33 Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Form 8821, Tax Information Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Fundraising . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 69 Governing body . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Government agencies . . . . . . . . . . . . . . . . . . 31 Form 8822, Change of Address . . . . . . . . . 69 Governing documents . . . . . . . . . . . . . . . . . . . . 17

Initiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Form 8868, Application for Extension of Government:

Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Time to File an Exempt Organization Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Form 8870, Information Return for Transfers Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Figuring gross receipts . . . . . . . . . . . . . . . . . . . . 57 Associated With Certain personal Benefit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

FIN 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Grants .............................. 30, 33

-72-
Government: (Cont.) J OMB Circular A-133 . . . . . . . . . . . . . . . . . . . . . . 39

Official . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Joint Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Ordinary course of business . . . . . . . . . . . . . . . 16

Organization ............................ 5 Joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Organization manager . . . . . . . . . . . . . . . . . . . . 67

unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . 5, 67 Government unit . . . . . . . . . . . . . . . . . . . . . . . . . 38 Affiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Governmental issuer . . . . . . . . . . . . . . . . . . . . . . 31 K Not required to file ....................... 4

Grants Key employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 ............................ 10, 29, 34 Type ................................... 9

Allocations, and . . . . . . . . . . . . . . . . . . . . . . . . 10 Organizational documents . . . . . . . . . . . . . . . . 62

Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 L Organizations: Government contributors . . . . . . . . . . . . . . . . 30 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Foreign countries, in ..................... 5

Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Late filing ................................. 6 Organizing document ...................... 8 Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Grants and other assistance . . . . . . . . . . . . . . 68

Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Other compensation . . . . . . . . . . . . . . . . . . . . . . 21 Gross receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Liabilities, total . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 $25,000 or less . . . . . . . . . . . . . . . . . . . . . . . . . 57

Acting as agent . . . . . . . . . . . . . . . . . . . . . . . . 57 Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Figuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 List of states .............................. 6 P Gross receipts test: Loans: Paid preparer ............................. 9 $25,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Officers, Directors, et al . . . . . . . . . . . . . . . . . 37

Receivable Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 $5,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Paperwork Reduction Act notice . . . . . . . . . . . 40 Gross rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Lobbying:

Gross revenue Activity/Activities . . . . . . . . . . . . . . . . . . . . . . . 11 Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Gross sales price Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 . . . . . . . . . . . . . . . . . . . . . . . . . 32

Group exemption Grassroots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Payments: . . . . . . . . . . . . . . . . . . . . . . . . . 60 In-house expenditures . . . . . . . . . . . . . . . . . . 35 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Central/parent organization . . . . . . . . . . . . . 60

Group exemption number (GEN) Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 65 ......... 9

Lobbying expenditures . . . . . . . . . . . . . . . . . . . . 62 Nonfixed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Subordinate organization ................ 9

Local governmental unit . . . . . . . . . . . . . . . . . . . 38 Severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Group return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 To affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Lotteries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

H Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 13, 68

Heading .................................. 8 M Failure to file ............................ 6

Health benefit plan . . . . . . . . . . . . . . . . . . . . . . . 24 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Perjury ................................. 7

Health benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Management and general expenses . . . . . . . 33 Pension plan contributions . . . . . . . . . . . . . . . . 35

Helpful hints ............................... 3 Management company . . . . . . . . . . . . . . . . . . . . 17 Personal benefit contracts . . . . . . . . . . . . . . . . . 14

Highest compensated employee . . . . . . . . . . . 63 Medicaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Phone help ............................... 3

Historical treasure . . . . . . . . . . . . . . . . . . . . . . . . 11 Medical research . . . . . . . . . . . . . . . . . . . . . . . . . 59 Photographs of missing children ............ 3

Hospital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Medicare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Pledges receivable . . . . . . . . . . . . . . . . . . . . . . . 37

Hours per week . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Medicare taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Policies:

Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Charity care . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Member of the governing body . . . . . . . . . . . . 15 Conflicts of interest . . . . . . . . . . . . . . . . . . . . . 17

I Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Document retention and destruction . . . . . 19

Identifying number (of paid preparer) . . . . . . 10 Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Joint Venture . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Income: Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Nondiscrimination . . . . . . . . . . . . . . . . . . . . . . 69

Exempt function . . . . . . . . . . . . . . . . . . . . . . . . 10 Dues ............................... 29, 36 Whistleblower . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Merger, articles of Political: ......................... 8

Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Miscellaneous Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 ............................. 6 Unrelated business . . . . . . . . . . . . . . . . . . . . . 13 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Political campaign activities ................ 2

Incomplete return .......................... 7 Income ................................. 2 Political organization ....................... 5

Independent contractor . . . . . . . . . . . . . . . . . . . 29 Mission ................................... 4 Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Independent voting member of governing Public inspection Mission society . . . . . . . . . . . . . . . . . . . . . . . 58 ............................ 4

body . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Section 527 ............................. 4 Money market funds . . . . . . . . . . . . . . . . . . . . . . 37 Information return . . . . . . . . . . . . . . . . . . . . . . . . 58 State or local ............................ 4 Mortgage interest . . . . . . . . . . . . . . . . . . . . . . . . . 38

Initial contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Postage cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Museums ................................. 2

Initial return ............................... 8 Power of attorney . . . . . . . . . . . . . . . . . . . . . . . . . 69 Mutual or cooperative electric Instant bingo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Institutional trustee . . . . . . . . . . . . . . . . . . . . . . . 20 Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . 38

Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Insurance contract . . . . . . . . . . . . . . . . . . . . . . . . 58 N Private business use . . . . . . . . . . . . . . . . . . . . . . 64

Integrated auxiliary ........................ 4 Name: Private delivery services ................... 6

Name and address ...................... 8 Intellectual property . . . . . . . . . . . . . . . . . . . . . . . 14 Private foundation . . . . . . . . . . . . . . . . . . . . . . . . 64 Name change ........................... 8 Interest ............................... 31, 36 Privileged relationship . . . . . . . . . . . . . . . . . . . . 16 Name change ............................. 8 Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Tax-exempt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Professional fundraising services . . . . . . . . . . 35 Non-cash contribution . . . . . . . . . . . . . . . . . . . . 30 Interest income ........................ 30, 31 Program service . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Notes and loans receivable . . . . . . . . . . . . . 31 Nondiscrimination policy . . . . . . . . . . . . . . . . . . 69 Program service accomplishments, statement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Nonexempt charitable trusts . . . . . . . . . . . . . . . 37 of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Interested persons . . . . . . . . . . . . . . . . . . . . . . . . 63 Nonfixed payments . . . . . . . . . . . . . . . . . . . . . . . 66 Program service expenses . . . . . . . . . . . . . . . . 33

Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Nontaxable fringe benefit . . . . . . . . . . . . . . . . . 66 Program service revenue .............. 30, 31

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Government agency . . . . . . . . . . . . . . . . . . . . 31

Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . 37 Insurance premiums . . . . . . . . . . . . . . . . . . . . 30

Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Number of employees . . . . . . . . . . . . . . . . . . . . 62 Interest income . . . . . . . . . . . . . . . . . . . . . . . . . 31

Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Nursing homes . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Medicaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Medicare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Membership fees . . . . . . . . . . . . . . . . . . . . . . . 31

Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 O Program-related investments . . . . . . . . . . . . 30

Program-related . . . . . . . . . . . . . . . . . . . . . . . . 31 Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Rental income . . . . . . . . . . . . . . . . . . . . . . . . . 30

Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Section 501(c)(9) organization . . . . . . . . . . 30

Savings and temporary cash . . . . . . . . . . . . 37 Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Unrelated trade or business activities . . . . 30

Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Program-related investment . . . . . . . . . . . . . . . 30

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Prohibited tax shelter transactions . . . . . . . . . 13 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Scholarships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Proxy tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 School .................................... 2

Public charity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Reasonable effort . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 4947(a)(1) trusts . . . . . . . . . . . . . . . . . . 10

Public Inspection . . . . . . . . . . . . . . . . . . . . . . . . . 58 Reasonableness, rebuttable presumption Section 4958 ...................... 64, 66, 67

Public interest law firm . . . . . . . . . . . . . . . . . . . . 10 of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Section 4958, excise taxes:

Public support . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Disqualified persons . . . . . . . . . . . . . . . . . . . . 64

Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Organization managers . . . . . . . . . . . . . . . . . 67

A Charity’s Guide to Vehicle Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Section 501(c)(12) . . . . . . . . . . . . . . . . . . . . . . . . 15

Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Section 501(c)(15) . . . . . . . . . . . . . . . . . . . . . . 4, 57

A Donor’s Guide to Vehicle Reconciliation ............................. 6 Section 501(c)(3) .......................... 4

Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Recordkeeping ............................ 7 Applicable organization . . . . . . . . . . . . . . . . . 64

Compliance Guide for 501(c)(3) Private Refunding escrow . . . . . . . . . . . . . . . . . . . . . . . . 12 Disclosure of transactions and

Foundations . . . . . . . . . . . . . . . . . . . . . . . . . 69 Reimbursement: relationships . . . . . . . . . . . . . . . . . . . . . . . . . 15

Exempt Organizations Products and Of expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Section 501(c)(4): Services Navigator . . . . . . . . . . . . . . . . . . . 69 Of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Applicable organization . . . . . . . . . . . . . . . . . 64

Gaming Publication for Tax-Exempt Related organization ................... 16, 20 Section 501(c)(5): Organizations . . . . . . . . . . . . . . . . . . . . . . . . 69 Religious order . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Lobbying expenses . . . . . . . . . . . . . . . . . . . . . 11 Pub. 15, Circular E Employer’s Tax Religious organization ..................... 4 Membership dues . . . . . . . . . . . . . . . . . . . . . . 31 Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Rent/rental Section 501(c)(6): Pub. 15–A, Employer’s Supplemental Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Expense Lobbying expenses . . . . . . . . . . . . . . . . . . . . . 11 guide (Fringe Benefits) . . . . . . . . . . . . . . . 69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Membership dues . . . . . . . . . . . . . . . . . . . . . . 31 Pub. 1771, Charitable Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Reportable compensation Section 501(c)(7) ...................... 14, 63 Contributions-Substantiation and . . . . . . . . . . . . . . . . . 12

Disclosure Requirements Section 501(c)(9) .......................... 8 . . . . . . . . . . . . . 69 Requirements for a properly completed Form

Pub. 1779, Independent Contractor or 990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Section 6033(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Pub. 1828, Tax Guide for Churches and Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 39 Security/Securities . . . . . . . . . . . . . . . . . . . . . . . . 32

Religious Organizations . . . . . . . . . . . . . . 69 Returns and allowances . . . . . . . . . . . . . . . . . . 32 Sequencing list To Complete the Form and Pub. 3386, Tax Guide for Veterans Revenue Schedules .............................. 5 .............................. 33, 38 Organizations . . . . . . . . . . . . . . . . . . . . . . . . 69 Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Severance payments . . . . . . . . . . . . . . . . . . . . . 35

Pub. 3833, Disaster Relief, Providing Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 SFAS 116, Accounting for Contributions Assistance Through Charitable Program service . . . . . . . . . . . . . . . . . . . . . . . . 30 Received and Contributions Made . . . . . 6, 29 Organizations . . . . . . . . . . . . . . . . . . . . . . . . 69 Special events . . . . . . . . . . . . . . . . . . . . . . . . . 32 SFAS 117, Financial Statements of Pub. 4220, Applying for 501(c)(3) Sweepstakes, raffles, and lotteries . . . . . . 32 Not-for-Profit Organizations .......... 11, 39 Tax-Exempt Status . . . . . . . . . . . . . . . . . . . 69

Revenue-sharing transactions . . . . . . . . . . . . . 67 Shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Pub. 4221–PC, Compliance Guide for

501(c)(3) Public Charities . . . . . . . . . . . . . 69 Review of financial statements . . . . . . . . . . . . 11 Short accounting period .................... 5

Pub. 525, Taxable and Nontaxable Revocation of exemption . . . . . . . . . . . . . . . . . . 67 Signature ................................. 9

Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Rounding off to whole dollars ............... 7 Signature block ............................ 9

Pub. 526, Charitable Contributions . . . . . . 69 Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Significant disposition of assets . . . . . . . . . . . . 63

Pub. 538, Accounting Periods and Social club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Social security: Pub. 892, Exempt Organization Appeal S Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Procedures for Unagreed Issues . . . . . . 69 Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Pub. 910, IRS Guide to Free Tax Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Social welfare organization ................. 1 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Of inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Solicitations of nondeductible Pub. 946, How To Depreciate Sarbanes-Oxley . . . . . . . . . . . . . . . . . . . . . . . . . . 19 contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Pub. 947, Practice Before the IRS and Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Special events . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Power of Attorney . . . . . . . . . . . . . . . . . . . . 10 Savings accounts . . . . . . . . . . . . . . . . . . . . . . . . . 37 Specific instructions for Form 990 .......... 8

Publication 557, Tax-Exempt Status for Your Schedule of contributors . . . . . . . . . . . . . . . . . . 11 Sponsoring organization ................... 4

Organization . . . . . . . . . . . . . . . . . . . . . . . . . 69 Schedules: State:

Publication 561, Determining the Value of Schedule A, Public Charity Status and Public Filing requirement . . . . . . . . . . . . . . . . . . . . . . 69

donated Property . . . . . . . . . . . . . . . . . . . . . 69 Support ............................... 2 Reporting requirements .................. 6

Publication 598, Tax on Unrelated Business Schedule B, Schedule of Contributors .... 2 State of legal domicile ..................... 9

Income of Exempt Organizations . . . . . . 69 Schedule C, Political Campaign and Statement(s): Travel, Entertainment, Gift, and Car Lobbying Activities .................... 2 Activities Outside of U.S. . . . . . . . . . . . . . . . . 11

Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Schedule D, Supplemental Financial Audited Financial . . . . . . . . . . . . . . . . . . . . . . . 62

Publicly traded securities . . . . . . . . . . . . . . . . . . 38 Statements ........................... 2 Changes in net assets . . . . . . . . . . . . . . . . . . 70

Pull-tabs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Schedule E, Schools .................... 2 Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Purchases from affiliates . . . . . . . . . . . . . . . . . . 36 Schedule F, Statement of Activities Outside Financial Accounting Standards (SFAS

Purpose of Form .......................... 3 the United States ...................... 2 116) .................................. 6

Schedule G, Supplemental Information Functional Expenses . . . . . . . . . . . . . . . . . . . 33

Regarding Fundraising or Gaming Position 98–2 . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Q Activities .............................. 2 Program service accomplishments . . . . . . 10

Qualified intellectual property . . . . . . . . . . . . . . 14 Schedule H. Hospitals ................... 2 Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Qualified state or local political Schedule I, Grants and Other Assistance to Supplemental Financial .................. 2

organization ............................. 4 Organizations, Governments and Subordinate organization . . . . . . . . . . . . . . . . . 60

Quid pro quo contribution: Individuals in the U.S. ................. 2 Substantial contributor ................. 46, 64

Disclosure statement . . . . . . . . . . . . . . . . . . . 14 Schedule J, Compensation Substantial influence . . . . . . . . . . . . . . . . . . . . . . 64 Information ........................... 2 Substantiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Schedule K, Supplemental Information for R Supported organization . . . . . . . . . . . . . . . . . . . 64 Tax-Exempt Bonds .................... 2

Raffles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Schedule L. Transactions with Interested Supporting organization ................ 14, 65

Reasonable: Persons .............................. 2 Excess business holdings . . . . . . . . . . . . . . . 14

Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Schedule M, Non-Cash Contributions ..... 2 Sweepstakes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Belief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Schedule N, Liquidation, Termination,

Burden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Dissolution, or Significant Disposition of T Cause .................................. 6 Assets ................................ 2

Tax shelter transaction . . . . . . . . . . . . . . . . . . . . 13 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 16 Schedule O, Supplemental Information to

Effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Form 990 ............................. 2 Tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Estimate ................................ 9 Schedule R, Related Organizations and Tax-exempt bond .......................... 2

Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Unrelated Partnerships ................ 2 TE/GE EO Determinations . . . . . . . . . . . . . . . . 58

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Telephone number ........................ 8 U.S. Treasury bills . . . . . . . . . . . . . . . . . . . . . . . . 37 Volunteer exception . . . . . . . . . . . . . . . . . . . . . . 23

Term endowment . . . . . . . . . . . . . . . . . . . . . . . . . 11 Uniform Prudent Management of Institutional Voting member of the governing

Termination/terminated .................... 8 Funds Act (UPMIFA) . . . . . . . . . . . . . . . . . . . 39 body/board . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Top financial official . . . . . . . . . . . . . . . . . . . . . . 21 Unincorporated association ................ 8

Top management official . . . . . . . . . . . . . . . . . . 20 United States ............................. 9 W

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 University/universities . . . . . . . . . . . . . . . . . . . . . 11 Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Unrelated business . . . . . . . . . . . . . . . . . . . . . . . 13 Website address .......................... 9

Transfers: Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Whistleblower policy . . . . . . . . . . . . . . . . . . . . . . 18

Personal benefit contracts . . . . . . . . . . . . . . 14 Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Who must file ............................. 3

To controlled entities . . . . . . . . . . . . . . . . . . . 12 Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Widely available . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Travel expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Withholding: Unrelated business income . . . . . . . . . . . . . . . 33 Trust ..................................... 8 Backup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Unrelated organization . . . . . . . . . . . . . . . . . . . . 12 Trust fund recovery penalty . . . . . . . . . . . . . . . 68 Works of art . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Unrelated trade or business: Trust, section 4947(a)(1) . . . . . . . . . . . . . . . . . . 10 Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Trustee(s) . . . . . . . . . . . . . . . . . . . . . . . 9, 12, 15, 20 Gross income . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Y Institutional . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Year of formation .......................... 9 Tuition assistance . . . . . . . . . . . . . . . . . . . . . . . . 24

V ■ Vehicle donations . . . . . . . . . . . . . . . . . . . . . . . . 69 U Voluntary employees’ benefit association . . . 8 U.S. Possession ........................... 4 Volunteer ................................. 9

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