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)

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Instructions for Form 990 and Form 990-EZ

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2006

Department of the Treasury
Internal Revenue Service

Instructions for Form 990
and Form 990-EZ
Return of Organization Exempt From Income Tax and
Short Form Return of Organization Exempt From Income Tax
Under Section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code
(except black lung benefit trust or private foundation)
Caution: Form 990-EZ is for use by organizations other than sponsoring organizations and controlling organizations defined in section
512(b)(13), with gross receipts of less than $100,000 and total assets of less than $250,000 at the end of the year.
Section references are to the Internal Revenue Code unless otherwise noted.
Contents
• What’s New . . . . . . . . . . . . . . . .
• Purpose of Form . . . . . . . . . . . .
• Phone Help . . . . . . . . . . . . . . . .
• Email Subscription . . . . . . . . . . .
• Photographs of Missing Children
• General Instructions . . . . . . . . . .
A Who Must File . . . . . . . . . . . . .
B Organizations Not Required to
File Form 990 or Form 990-EZ . .
C Exempt Organization Reference
Chart . . . . . . . . . . . . . . . . . . . .
D Forms and Publications . . . . . . .
E Use of Form 990, or Form
990-EZ, To Satisfy State
Reporting Requirements . . . . . . .
F Other Forms as Partial
Substitutes for Form 990 or Form
990-EZ . . . . . . . . . . . . . . . . . . .
G Accounting Periods and
Methods . . . . . . . . . . . . . . . . . .
H When, Where, and How to File . .
I Extension of Time To File . . . . . .
J Amended Return/Final Return . . .
K Failure to File Penalties . . . . . . .
L Contributions . . . . . . . . . . . . . .
M Public Inspection of Returns,
etc. . . . . . . . . . . . . . . . . . . . . .
N Disclosures Regarding Certain
Information and Services
Furnished . . . . . . . . . . . . . . . . .
O Disclosures Regarding Certain
Transactions and Relationships . .
P Intermediate Sanction
Regulations — Excess Benefit
Transactions . . . . . . . . . . . . . . .
Q Erroneous Backup Withholding . .
R Group Return . . . . . . . . . . . . . .
S Organizations in Foreign
Countries and U.S. Possessions
T Public Interest Law Firms . . . . . .
U Political Organizations . . . . . . . .
V Information Regarding Transfers
Associated with Personal Benefit
Contracts . . . . . . . . . . . . . . . . .
W Prohibited Tax Shelter
Transactions and Related
Disclosure Requirements . . . . . .

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Contents
X Requirements for a Properly
Completed Form 990 or Form
990-EZ . . . . . . . . . . . . . . . . .
• Specific Instructions for Form
990 and Table of Contents for
These Specific Instructions . . .
• Specific Instructions for Form
990-EZ and Table of Contents
for These Specific Instructions .
• Index . . . . . . . . . . . . . . . . . .

Page
. . . . . 18
. . . . . 21
. . . . . 46
. . . . . 56

What’s New
The following items reflect changes
made by the Pension Protection Act of
2006.
• Item K has been revised to reflect the
requirement that a section 509(a)(3)
supporting organization must generally file
Form 990 (or Form 990-EZ, if applicable),
even if its gross receipts are normally
$25,000 or less.
• Sponsoring organizations and controlling
organizations as defined in section
512(b)(13) cannot file Form 990-EZ. These
organizations must file their return on Form
990.
• The definitions for disqualified persons
and excess benefit transactions have been
revised. See General Instruction P.
• New lines 1a and 22a were added to
Form 990 to show the total contributions to,
and grants made from, donor advised funds
for the year. The change reflects section
6033(k) requirements for sponsoring
organizations (defined in section
4966(d)(1)). Prior year’s lines 1a – 1d were
renumbered 1b – 1e.
• New lines 25a, 25b, and 25c replace the
prior year’s line 25 on Form 990. New lines
25a and 25b reflect compensation of current
and former officers, directors, trustees, and
key employees and line 25c reflects
compensation and distributions to certain
disqualified and other persons. Also, the
descriptions for lines 26 through 28 were
clarified to reflect the changes to line 25.
• New line 50b was added to Form 990 to
reflect the amount of receivables from
certain disqualified and other persons.
Cat. No. 22386X

• New lines 54a and 54b were added to
Form 990 to separate investments in
publicly traded securities from investments
in other securities. See the instructions for
lines 54a and 54b for more information.
• New line 88b and new Part XI were added
to reflect section 6033(h) which requires
controlling organizations, within the meaning
of section 512(b)(13), filing Form 990 after
August 17, 2006, to report the information
requested.
• New line 89f was added to Form 990 to
ask if the organization acquired a direct or
indirect interest in an applicable insurance
contract after August 17, 2006.
• New line 89g was added to Form 990 to
ask if supporting organizations and
sponsoring organizations maintaining donor
advised funds had any excess business
holdings at any time during the tax year.
• Section 501(c)(3) organizations that file
Form 990-T after August 17, 2006, to report
unrelated business income must make that
Form 990-T available for public inspection
under section 6104(d)(1)(A)(ii).
The following item reflects changes
made by Act section 516 of the Taxpayer
Increase Prevention and Reconciliation
Act of 2005.
• Form 990, line 89e and Form 990-EZ,
line 40e have been added to ask if the
organization was a party to any prohibited
tax shelter transactions. See new General
Instruction W for more information.
The following changes were also made to
the instructions.
• For 2006, an exempt organization must
file its return electronically if it files at least
250 returns during the calendar year and
has total assets of $10 million or more at the
end of the tax year. See General Instruction
H for more information.
• The discussion for determining whether a
non-life insurance company qualifies as a
tax-exempt organization under section
501(c)(15) was revised to reflect the
meaning of gross receipts for purposes of
section 501(c)(15)(A). See General
Instruction A for more information.

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Instructions for Form 990 and Form 990-EZ

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• The discussion of an excess benefit

transaction was revised to include
embezzlement. See General Instruction P.
• The instructions for line 43 of Form 990
were revised to require additional reporting
for certain expenses.
• The instructions for Part V-A of Form 990
and Part IV of Form 990-EZ, have been
revised and expanded to add greater clarity
to the subject.

photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.

General Instructions
The General Instructions apply to both Form
990 and Form 990-EZ. See also the Specific
Instructions for each of these forms.
Certain Form 990 filers must file
electronically, see General
CAUTION Instruction H for who must file
electronically.

!

Purpose of Form
Form 990 and Form 990-EZ are used by
tax-exempt organizations, nonexempt
charitable trusts, and section 527 political
organizations to provide the IRS with the
information required by section 6033.
An organization’s completed Form 990,
Form 990-EZ, and the Form 990-T of
501(c)(3) organizations is available for
public inspection as required by section
6104. Schedule B (Form 990, 990-EZ, or
990-PF), Schedule of Contributors, is open
for public inspection for section 527
organizations filing Form 990 or Form
990-EZ. For other organizations that file
Form 990 or Form 990-EZ, parts of
Schedule B may be open to public
inspection. See the Instructions for
Schedule B for more details.
Some members of the public rely on
Form 990, or Form 990-EZ, as the primary
or sole source of information about a
particular organization. How the public
perceives an organization in such cases
may be determined by the information
presented on its return. Therefore, the return
must be complete, accurate, and fully
describe the organization’s programs and
accomplishments.
Use Form 990 or Form 990-EZ, to send
a required election to the IRS, such as the
election to capitalize costs under section
266.

Phone Help
If you have questions and/or need help
completing Form 990, or Form 990-EZ,
please call 1-877-829-5500. This toll-free
telephone service is available Monday
through Friday.

Email Subscription
The IRS has established a new
subscription-based email service for tax
professionals and representatives of
tax-exempt organizations. Subscribers will
receive periodic updates from the IRS
regarding exempt organization tax law and
regulations, available services, and other
information. To subscribe, visit www.irs.gov/
eo.

Photographs of Missing
Children
The Internal Revenue Service is a proud
partner with the National Center for Missing
and Exploited Children. Photographs of
missing children selected by the Center may
appear in instructions on pages that would
otherwise be blank. You can help bring
these children home by looking at the

A. Who Must File
Filing Tests
Organizations exempt from income tax
under Internal Revenue Code section
501(a), which includes sections 501(c),
501(e), 501(f), 501(k), 501(n), and
4947(a)(1) must generally file Form 990 or
Form 990-EZ based on their gross receipts
for the tax year. (See General Instruction B
below for exceptions to the filing
requirement.) For this purpose, gross
receipts is the organization’s total revenues
from all sources during its annual
accounting period, without subtracting any
costs or expenses.
However, in addition to the above
filing test, 501(c)(15) insurance
CAUTION companies are subject to a separate
series of tests to determine whether small
insurance companies qualify as tax exempt
under section 501(c)(15) for the tax year.
These separate tests use a different
definition for gross receipts only for
purposes of determining whether such
insurance companies qualify as tax exempt.
See Section 501(c)(15) Organizations below
for additional information.

!

If the organization does not meet any of
the exceptions listed in General Instruction
B, and its annual gross receipts are normally
more than $25,000, it must file Form 990 or
Form 990-EZ. If the organization is a
sponsoring organization, or a controlling
organization within the meaning of section
512(b)(13), it must file Form 990. However,
if the organization is a supporting
organization described in section 509(a)(3),
it generally must file Form 990 (Form
990-EZ if applicable) even if its gross
receipts are normally $25,000, or less.
Supporting organizations of religious
organizations need not file Form 990 (or
form 990-EZ) if their gross receipts are
normally $5,000, or less. See the gross
receipts discussion in General Instruction B.
If the organization’s gross receipts during
the year are less than $100,000 and its total
assets at the end of the year are less than
$250,000, it may file Form 990-EZ instead of
Form 990. Even if the organization meets
this test, it can still file Form 990.
Organizations required to file Schedule A
(Form 990 or 990-EZ), Organization Exempt
Under Section 501(c)(3), that do not meet
the support tests discussed in the
instructions for Part IV of that schedule
should contact the IRS at the following
address to re-evaluate their
determination-of-filing requirements.

-2-

Internal Revenue Service
TE/GE EO Determinations
P.O. Box 2508
Cincinnati, OH 45201

Section 501(a), (e), (f), (k), and (n)
Organizations
Except for those types of organizations
listed in General Instruction B, an annual
return on Form 990, or Form 990-EZ, is
required from every organization exempt
from tax under section 501(a), including
foreign organizations and cooperative
service organizations described in sections
501(e) and (f); child care organizations
described in section 501(k); and charitable
risk pools described in section 501(n).
Section 501(c)(3), 501(e), (f), (k), and (n)
organizations must also attach a completed
Schedule A (Form 990 or 990-EZ) to their
Form 990 or Form 990-EZ.
For purposes of these instructions,

TIP the term section 501(c)(3) includes
organizations exempt under sections
501(e), (f), (k), and (n).

Section 501(c)(15) Organizations
A section 501(c)(15) organization applies
the same gross receipts test as other
organizations to determine whether they
must file the Form 990 or Form 990-EZ.
However, section 501(c)(15) insurance
companies are also subject to separate
tests to determine whether they qualify as
tax-exempt for the tax year. The following
tests use a specific definition for gross
receipts defined, below only for purposes of
the following tests. Insurance companies
that do not qualify as tax-exempt must file
Form 1120-PC, U.S. Property and Casualty
Insurance Company Income Tax Return, or
Form 1120, U.S. Corporation Income Tax
Return, as taxable entities. See Notice
2006-42, 2006-19 I.R.B. 878 for more
information.
Tests for section 501(c)(15) insurance
companies to qualify as tax-exempt for
the tax year. If any section 501(c)(15)
insurance company (other than life
insurance) normally has gross receipts of
more than $25,000 for the tax year and
meets both parts of the following test, then
the company can file Form 990 (or Form
990-EZ, if applicable).
1. The company’s gross receipts must
be equal to or less than $600,000, and
2. The company’s premiums must be
more than 50% of its gross receipts.
If the company did not meet this test and
the company is a mutual insurance
company, then it must meet the Alternate
test to qualify to file Form 990 (or Form
990-EZ, if applicable). Otherwise, the
company must file Form 1120 or Form
1120-PC, as appropriate.
Alternate test. If any section 501(c)(15)
insurance company (other than life
insurance) is a mutual insurance company
and it did not meet the above test, then the
company must meet both parts of the
following alternate test.
1. The company’s gross receipts must
be equal to or less than $150,000, and
2. The company’s premiums must be
more than 35% of its gross receipts.

General Instructions for Form 990 and Form 990-EZ

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If the company does not meet either test,
then it must file Form 1120-PC or Form
1120 (if the company is not entitled to
insurance reserves) instead of Form 990 or
Form 990-EZ.

division of its parent organization for federal
tax purposes. Therefore, financial and other
information applicable to a disregarded
entity must be reported as the parent
organization’s information.

The alternate test does not apply if
any employee of the mutual
CAUTION insurance company or a member of
the employee’s family is an employee of
another company that is exempt under
section 501(c)(15)(or would be exempt if this
provision did not apply).
Gross receipts. To determine whether a
section 501(c)(15) organization satisfies
either of the above tests, figure gross
receipts by adding (1) premiums (including
deposits and assessments) without
reduction for return premiums or premiums
paid for reinsurance; (2) gross investment
income of a non-life insurance company (as
described in section 834(b)); and (3) other
items that are included in the filer’s gross
income under Subchapter B, Chapter 1,
Subtitle A of the Code. This definition does
not, however, include contributions to
capital. For more information, see Notice
2006-42, 2006-19 I.R.B. 878.
Premiums consist of all amounts
received as a result of entering into an
insurance contract. For information about
the reporting of premiums, see the
instructions for Form 990 Part I, line 2.
Anti-abuse rule. The anti-abuse rule,
found in section 501(c)(15)(C), explains how
gross receipts (including premiums) from all
members of a controlled group are
aggregated in figuring the above tests.

Section 4947(a)(1) Nonexempt
Charitable Trusts

!

Political Organizations
Tax-exempt political organizations must file
Form 990 or Form 990-EZ (if applicable)
unless the organization is excepted from
filing under Exemption 14 or 15 of General
Instruction B. A qualified state or local
political organization (defined below) must
file Form 990 (not Form 990-EZ) only if it
has gross receipts of $100,000 or more.
Qualified state or local political
organizations. This is a political
organization that meets all of the following
requirements.
1. The organization’s exempt functions
are solely for the purpose of influencing or
attempting to influence the selection,
nomination, election, or appointment of any
individual to any state or local public office
or office in a state or local political
organization.
2. The organization is subject to state
law that requires it to report the information
that is similar to that required on Form 8872.
3. The organization files the required
reports with the state.
4. The state makes such reports public
and the organization makes them open to
public inspection in the same manner that
organizations must make Form 8872
available for public inspection.
For additional information, including the
prohibition of involvement in the
organization of a federal candidate or office
holder, see section 527(e)(5).

Disregarded Entities
A disregarded entity, as described in
Regulations sections 301.7701-1 through
301.7701-3, is treated as a branch or

Any nonexempt charitable trust (described
in section 4947(a)(1)) not treated as a
private foundation is also required to file
Form 990, or Form 990-EZ, along with a
completed Schedule A (Form 990 or
990-EZ). See the discussion in General
Instruction D for exceptions to filing Form
1041, U.S. Income Tax Return for Estates
and Trusts.

If an Organization’s Exemption
Application Is Pending
If the organization’s application for
exemption is pending, check the Application
pending box in the heading of the return and
complete the return.

Organizations That Filed a Return
in the Prior Year but Are Not
Required To File in the Current
Year
Organizations that previously filed Form 990
or Form 990-EZ and meet exemption 15
under General Instruction B do not have to
file a return even if they received a Form
990 Package.
Exempt organizations that filed Form
990, or Form 990-EZ, but are no longer
required to file because they meet a specific
exemption (other than exemption 15 in
General Instruction B) should advise their
IRS area office so their filing status can be
updated.
Exempt organizations that are not sure of
their area office may call the IRS at
1-877-829-5500. Exempt organizations that
stop filing Form 990, or Form 990-EZ,
without notifying their area office may
receive service center correspondence
inquiring about their returns. When
responding to these inquiries, these
organizations should give the specific
reason for not filing.

Failure To File and Its Effect on
Contributions
Organizations that are eligible to receive tax
deductible contributions are listed in
Publication 78, Cumulative List of
Organizations described in Section 170(c) of
the Internal Revenue Code of 1986. An
organization may be removed from this
listing if our records show that it is required
to file Form 990, or Form 990-EZ, but it does
not file a return or advises us that it is no
longer required to file. However,
contributions to such an organization may
continue to be deductible by the general
public until the IRS publishes a notice to the
contrary in the Internal Revenue Bulletin.

B. Organizations Not Required
To File Form 990 or 990-EZ
Organizations not required to file

TIP Form 990, or Form 990-EZ with the
IRS may wish to use it to satisfy
state reporting requirements. For details,
see General Instruction E.

General Instructions for Form 990 and Form 990-EZ

-3-

The following types of organizations
exempt from tax under section 501(a)
(section 527 for political organizations) do
not have to file Form 990, or Form 990-EZ,
with the IRS. However, if the organization
chooses to file a Form 990 or Form 990-EZ,
it must also attach the schedules and
statements described in the instructions for
these forms.
1. A church, an interchurch organization of
local units of a church, a convention or
association of churches, an integrated
auxiliary of a church (such as a men’s or
women’s organization, religious school,
mission society, or youth group).
2. A church-affiliated organization that is
exclusively engaged in managing funds
or maintaining retirement programs and
is described in Rev. Proc. 96-10, 1996-1
C.B. 577.
3. A school below college level affiliated
with a church or operated by a religious
order.
4. A mission society sponsored by, or
affiliated with, one or more churches or
church denominations, if more than half
of the society’s activities are conducted
in, or directed at, persons in foreign
countries.
5. An exclusively religious activity of any
religious order.
6. A state institution whose income is
excluded from gross income under
section 115.
7. An organization described in section
501(c)(1). A section 501(c)(1)
organization is a corporation organized
under an Act of Congress that is:
• An instrumentality of the United
States, and
• Exempt from federal income taxes.
8. A private foundation exempt under
section 501(c)(3) and described in
section 509(a). Use Form 990-PF,
Return of Private Foundation.
9. A black lung benefit trust described in
section 501(c)(21). Use Form 990-BL,
Information and Initial Excise Tax Return
for Black Lung Benefit Trusts and
Certain Related Persons.
10. A stock bonus, pension, or profit-sharing
trust that qualifies under section 401.
Use Form 5500, Annual Return/Report
of Employee Benefit Plan.
11. A religious or apostolic organization
described in section 501(d). Use Form
1065, U.S. Return of Partnership
Income.
12. A foreign organization whose annual
gross receipts from sources within the
U.S. are normally $25,000 or less (Rev.
Proc. 94-17, 1994-1 C.B. 579). See the
$25,000 Gross Receipts Test below.
13. A governmental unit or affiliate of a
governmental unit described in Rev.
Proc. 95-48, 1995-2 C.B. 418.

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14. A political organization that is:
• A state or local committee of a political
party;
• A political committee of a state or local
candidate;
• A caucus or association of state or
local officials;
• An authorized committee (as defined
in section 301(6) of the Federal Election
Campaign Act of 1971) of a candidate
for federal office;
• A national committee (as defined in
section 301(14) of the Federal Election
Campaign Act of 1971) of a political
party;
• A United States House of
Representatives or United States Senate
campaign committee of a political party
committee;
• Required to report under the Federal
Election Campaign Act of 1971 as a
political committee (as defined in section
301(4) of such Act); or
• An organization described under
section 6033(g)(3)(G).
15. Except for supporting organizations
described in section 509(a)(3), an
organization whose gross receipts are
normally $25,000 or less.
16. A section 509(a)(3) supporting
organization of a religious organization, if
the supporting organization’s gross
receipts are normally $5,000 or less.

How to Determine If an
Organization’s Gross Receipts
are Normally $25,000 (or $5,000)
or Less
To figure whether an organization has to file
Form 990-EZ (or Form 990) apply the
$25,000 (or $5,000) gross receipts test
(below) using the following definition of
gross receipts and information in Figuring
Gross Receipts below.

Gross Receipts
Do not use the definition of gross
receipts described in General
CAUTION Instructions A, under Section
501(c)(15) Organizations to figure gross
receipts.

!

Gross receipts are the total amounts the
organization received from all sources
during its annual accounting period, without
subtracting any costs or expenses.
Gross receipts when acting as an agent.
If a local chapter of a section 501(c)(8)
fraternal organization collects insurance
premiums for its parent lodge and merely
sends those premiums to the parent without
asserting any right to use the funds or
otherwise deriving any benefit from
collecting them, the local chapter does not
include the premiums in its gross receipts.
The parent lodge reports them instead. The
same treatment applies in other situations in
which one organization collects funds
merely as an agent for another.

Form 990. Gross receipts are the sum of
lines 1e, 2, 3, 4, 5, 6a, 7, 8a (both columns),
9a, 10a, and 11 of Part I. Gross receipts can
also be figured by adding back the amounts
on lines 6b, 8b (both columns), 9b, and 10b
to the total revenue reported on line 12.
Form 990-EZ. Gross receipts are the sum
of lines 1, 2, 3, 4, 5a, 6a, 7a, and 8 of Part I.
Gross receipts can also be figured by
adding back the amounts on lines 5b, 6b,
and 7b to the total revenue reported on line
9.
Example. Organization M reported
$50,000 as total revenue on line 9 of its
Form 990-EZ. M added back the costs and
expenses it had deducted on lines 5b
($2,000); 6b ($1,500); and 7b ($500) to its
total revenue of $50,000 and determined
that its gross receipts for the tax year were
$54,000.

$25,000 Gross Receipts Test
To determine if an organization’s gross
receipts are normally $25,000 or less, apply
the following test. An organization’s gross
receipts normally are considered to be
$25,000 or less if the organization is:
1. Up to a year old and has received, or
donors have pledged to give, $37,500 or
less during its first tax year;
2. Between 1 and 3 years old and
averaged $30,000 or less in gross receipts
during each of its first 2 tax years; or
3. Three years old or more and
averaged $25,000 or less in gross receipts
for the immediately preceding 3 tax years
(including the year in which the return would
be filed).

$5,000 Gross Receipts Test
To determine if an organization’s gross
receipts are normally $5,000 or less, apply
the following test. An organization’s gross
receipts normally are considered to be
$5,000 or less if the organization is:
1. Up to a year old and has received, or
donors have pledged to give, $7,500 or less
during its first tax year;
2. Between 1 and 3 years old and
averaged $6,000 or less in gross receipts
during each of its first 2 tax years; or
3. Three years old or more and
averaged $5,000 or less in gross receipts for
the immediately preceding 3 tax years
(including the year in which the return would
be filed).

C. Exempt Organization
Reference Chart
To determine how the instructions for

TIP Form 990 and Form 990-EZ apply to
the organization, you 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)

Figuring Gross Receipts

Charitable, Religious, Educational,
Scientific, etc., Organizations . . . . . . 501(c)(3)

Figure gross receipts for Form 990 and
Form 990-EZ as follows.

Civic Leagues and Social Welfare
Organizations . . . . . . . . . . . . . . . . 501(c)(4)

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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)
& (10)

Voluntary Employees’ Beneficiary
Associations . . . . . . . . . . . . . . . . . 501(c)(9)
Teachers’ Retirement Fund Associations 501(c)(11)
Benevolent Life Insurance Associations,
Mutual Ditch or Irrigation Companies,
Mutual or Cooperative Telephone
Companies, etc. . . . . . . . . . . . . . . 501(c)(12)
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 6/25/59) . . . . . . . . . 501(c)(18)
Organizations of Past or Present
501(c)(19)
Members of the Armed Forces . . . . .
& (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 Individuals . . . . . . . . . . . 501(c)(26)
State-Sponsored Workmen’s
Compensation and Insurance and
Reinsurance Organizations . . . . . . . 501(c)(27)
Religious and Apostolic Associations . .

501(d)

Cooperative Hospital Service
Organizations . . . . . . . . . . . . . . . .

501(e)

Cooperative Service Organizations of
Operating Educational Organizations

501(f)

Child Care Organizations . . . . . . . . . .

501(k)

Charitable Risk Pools . . . . . . . . . . . .

501(n)

Political Organizations . . . . . . . . . . . .

527

D. Forms and Publications
Internet. You can access the IRS
website 24 hours a day, 7 days a
week, at www.irs.gov to:
• Download forms, instructions, and
publications.
• Order IRS products online.
• Research your tax questions online.
• Search publications online by topic or
keyword.
• View Internal Revenue Bulletins (IRBs)
published in the last few years.
• Sign up to receive local and national tax
news by email.
CD for tax products. You can order
Publication 1796, IRS Tax Products
CD, and obtain:
• A CD that is released twice so you have
the latest products. The first release ships in
late December and the final release ships in
late February.
• Current-year forms, instructions, and
publications.

General Instructions for Form 990 and Form 990-EZ

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• Prior-year forms, instructions, and

publications.
• Tax Map: an electronic research tool and
finding aid.
• Tax law frequently asked questions
(FAQs).
• Tax Topics from the IRS telephone
response system.
• Fill-in, print, and save features for most
tax forms.
• Internal Revenue Bulletins.
• Toll-free and email technical support.
Buy the CD from National Technical
Information Service (NTIS) at www.irs.gov/
cdorders for $35 (no handling fee) or call
1-877-233-6767 toll free to buy the CD for
$35 (plus a $5 handling fee).
By phone and in person. You can order
forms and publications by calling
1-800-TAX-FORM (1-800-829-3676). You
can also get most forms and publications at
your local IRS office.

Other Forms That May Be Required
Schedule A (Form 990 or 990-EZ).
Organization Exempt Under Section
501(c)(3) (Except Private Foundation) and
Section 501(e), 501(f), 501(k), 501(n), or
Section 4947(a)(1), Nonexempt Charitable
Trust. An organization is not required to file
Schedule A (Form 990 or 990-EZ) if its
gross receipts are normally $25,000 or less.
See the gross receipts discussion in
General Instruction B.
Schedule B (Form 990, 990-EZ, or
990-PF). Schedule of Contributors.
Schedule B (Form 990, 990-EZ, or 990-PF)
provides contributor information for line 1 of
Form 990 and 990-EZ. All Form 990 and
990-EZ filers must complete and attach this
schedule to their return unless they meet an
exception, and check the box in item M of
Form 990 (item H on Form 990-EZ).
Forms W-2 and W-3. Wage and Tax
Statement; and Transmittal of Wage and
Tax Statements.
Form W-9. Request for Taxpayer
Identification Number and Certification.
Form 940. Employer’s Annual Federal
Unemployment (FUTA) Tax Return.
Form 941. Employer’s QUARTERLY
Federal Tax Return. Used to report social
security, Medicare, and income taxes
withheld by an employer and social security
and Medicare taxes paid by an employer.
Form 943. Employer’s Annual Federal Tax
Return for Agricultural Employees.
Trust Fund Recovery Penalty. If
certain excise, income, social security, and
Medicare taxes that must be collected or
withheld are not collected or withheld, or
these taxes are not paid to the IRS, a Trust
Fund Recovery Penalty may apply. The
Trust Fund Recovery Penalty may be
imposed on all persons (including
volunteers) who the IRS determines were
responsible for collecting, accounting for,
and paying over these taxes, and who acted
willfully in not doing so.
This penalty does not apply to volunteer
unpaid members of any board of trustees or
directors of a tax-exempt organization, if
these members are solely serving in an
honorary capacity, do not participate in the
day-to-day or financial activities of the
organization, and do not have actual
knowledge of the failure to collect, account

for, and pay over these taxes. However, the
preceding sentence does not apply if it
results in no person being liable for the
penalty.
The penalty is equal to the unpaid trust
fund tax. See Pub. 15 (Circular E),
Employer’s Tax Guide, for more details,
including the definition of responsible
persons.
Form 990-T. Exempt Organization
Business Income Tax Return (and proxy tax
under section 6033(e)). Filed separately for
organizations with gross income of $1,000
or more from business unrelated to the
organization’s exempt purpose. The Form
990-T is also filed to pay the section
6033(e)(2) proxy tax. For Form 990, see line
85 and its instructions; for Form 990-EZ, see
line 35 and its instructions.
Form 990-W. Estimated Tax on Unrelated
Business Taxable Income for Tax-Exempt
Organizations.
Form 1040. U.S. Individual Income Tax
Return.
Form 1041. U.S. Income Tax Return for
Estates and Trusts. Required of section
4947(a)(1) nonexempt charitable trusts that
also file Form 990 or Form 990-EZ.
However, if such a trust does not have any
taxable income under Subtitle A of the
Code, it can file Form 990, or Form 990-EZ,
and does not have to file Form 1041 to meet
its section 6012 filing requirement. If this
condition is met, complete Form 990, or
Form 990-EZ, and do not file Form 1041.
A section 4947(a)(1) nonexempt
charitable trust that normally has gross
receipts of not more than $25,000 (see the
gross receipts discussion in General
Instruction B) and has no taxable income
under Subtitle A must complete line 92 and
the signature block on page 9 of the Form
990. On the Form 990-EZ, complete line 43
and the signature block on page 3 of the
return. In addition, complete only the
following items in the heading of Form 990
or Form 990-EZ:
Item
A
Tax year (fiscal year or short period, if
applicable)
B
Applicable checkboxes
C
Name and address
D
Employer identification number (EIN)
J
Section 4947(a)(1) nonexempt charitable
trust box

Form 1096. Annual Summary and
Transmittal of U.S. Information Returns.
Form 1098 series. Information returns to
report mortgage interest, student loan
interest, qualified tuition and related
expenses received, and a contribution of a
qualified vehicle that has a claimed value of
more than $500.
Form 1099 series. Information returns to
report acquisitions or abandonments of
secured property, proceeds from broker and
barter exchange transactions, cancellation
of debt, dividends and distributions, certain
government and state qualified tuition
program payments, taxable distributions
from cooperatives, interest payments,
payments of long-term care and accelerated
death benefits, miscellaneous income
payments, distributions from an HSA, Archer
MSA or Medicare Advantage MSA, original
issue discount, distributions from pensions,

General Instructions for Form 990 and Form 990-EZ

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annuities, retirement or profit-sharing plans,
IRAs, insurance contracts, etc., and
proceeds from real estate transactions.
Also, use certain of these returns to report
amounts that were received as a nominee
on behalf of another person.
Form 1120-POL. U.S. Income Tax Return
for Certain Political Organizations.
Form 1128. Application To Adopt, Change,
or Retain a Tax Year.
Form 3115. Application for Change in
Accounting Method.
Form 4506. Request for Copy of Tax
Return.
Form 4506-A. Request for Public
Inspection or Copy of Exempt or Political
Organization IRS Form.
Form 4562. Depreciation and Amortization.
Form 4720. Return of Certain Excise Taxes
Under Chapters 41 and 42 of the Internal
Revenue Code.
Form 5500. Annual Return/Report of
Employee Benefit Plan. Employers who
maintain pension, profit-sharing, or other
funded deferred compensation plans are
generally required to file the Form 5500.
This requirement applies whether or not the
plan is qualified under the Internal Revenue
Code and whether or not a deduction is
claimed for the current tax year.
Form 5768. Election/Revocation of Election
by an Eligible Section 501(c)(3)
Organization To Make Expenditures To
Influence Legislation.
Form 8282. Donee Information Return.
Required of the donee of charitable
deduction property who sells, exchanges, or
otherwise disposes of donated property
within 3 years after receiving it. The form is
also required of any successor donee who
disposes of charitable deduction property
within 3 years after the date that the donor
gave the property to the original donee. It
does not matter who gave the property to
the successor donee. It may have been the
original donee or another successor donee.
Form 8283. Noncash Charitable
Contributions.
Form 8300. Report of Cash Payments Over
$10,000 Received in a Trade or Business.
Used to report cash amounts in excess of
$10,000 that were received in a single
transaction (or in two or more related
transactions) in the course of a trade or
business (as defined in section 162).
However, if the organization receives a
charitable cash contribution in excess of
$10,000, it is not subject to the reporting
requirement since the funds were not
received in the course of a trade or
business.
Form 8822. Change of Address. Used to
notify the IRS of a change in mailing
address that occurs after the return is filed.
Form 8868. Application for Extension of
Time To File an Exempt Organization
Return.
Form 8870. Information Return for
Transfers Associated With Certain Personal
Benefit Contracts. Used to identify those
personal benefit contracts for which funds
were transferred to the organization, directly
or indirectly, as well as the transferors for,
and beneficiaries of, those contracts.

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Form 8871. Political Organization Notice of
Section 527 Status.
Form 8872. Political Organization Report of
Contributions and Expenditures.
Form 8886-T. Disclosure by Tax-Exempt
Entity Regarding Prohibited Tax Shelter
Transaction.
Form 8899. Notice of Income from
Donated Intellectual Property. Used to
report net income from qualified intellectual
property to the IRS and the donor.
Form 8921. Transaction Involving a Pool of
Applicable Insurance Contracts.
Form 8922. Applicable Insurance Contract
Information Return.
Form TD F 90-22.1. Report of Foreign
Bank and Financial Accounts.

Helpful Publications
Publication 463. Travel, Entertainment,
Gift, and Car Expenses.
Publication 525. Taxable and Nontaxable
Income.
Publication 526. Charitable Contributions.
Publication 538. Accounting Periods and
Methods.
Publication 598. Tax on Unrelated
Business Income of Exempt Organizations.
Publication 910. IRS Guide to Free Tax
Services.
Publication 946. How To Depreciate
Property.
Publication 1771. Charitable
Contributions — Substantiation and
Disclosure Requirements.

E. Use of Form 990, or Form
990-EZ, To Satisfy State
Reporting Requirements
Some states and local government units will
accept a copy of Form 990, or Form 990-EZ,
Schedule A (Form 990 or 990-EZ), and
Schedule B (Form 990, 990-EZ, or 990-PF)
in place of all or part of their own financial
report forms. The substitution applies
primarily to section 501(c)(3) organizations,
but some of the other types of section
501(c) organizations are also affected.
If the organization uses Form 990, or
Form 990-EZ, to satisfy state or local filing
requirements, such as those under state
charitable solicitation acts, note the following
discussions.

Determine State Filing
Requirements
The organization should consult the
appropriate officials of all states and other
jurisdictions in which it does business to
determine their specific filing requirements.
Doing business in a jurisdiction may include
any of the following: (a) soliciting
contributions or grants by mail or otherwise
from individuals, businesses, or other
charitable organizations; (b) conducting
programs; (c) having employees within that
jurisdiction; (d) maintaining a checking
account; or (e) owning or renting property
there.

Monetary Tests May Differ
Some or all of the dollar limitations
applicable to Form 990, or Form 990-EZ,
when filed with the IRS may not apply when
using Form 990, or Form 990-EZ, in place of

state or local report forms. Examples of the
IRS dollar limitations that do not meet some
state requirements are the $25,000 gross
receipts minimum that creates an obligation
to file with the IRS (see the gross receipts
discussion in General Instruction B) and the
$50,000 minimum for listing professional
fees in Part II-A of Schedule A (Form 990 or
990-EZ).

Additional Information May Be
Required
State or local filing requirements may
require the organization to attach to Form
990, or Form 990-EZ, one or more of the
following: (a) additional financial statements,
such as a complete analysis of functional
expenses or a statement of changes in net
assets; (b) notes to financial statements; (c)
additional financial schedules; (d) a report
on the financial statements by an
independent accountant; and (e) answers to
additional questions and other information.
Each jurisdiction may require the additional
material to be presented on forms they
provide. The additional information does not
have to be submitted with the Form 990, or
Form 990-EZ, filed with the IRS.
Even if the Form 990, or Form 990-EZ,
that the organization files with the IRS is
accepted by the IRS as complete, a copy of
the same return filed with a state will not
fully satisfy that state’s filing requirement if
required information is not provided,
including any of the additional information
discussed above, or if the state determines
that the form was not completed by following
the applicable Form 990, or Form 990-EZ,
instructions or supplemental state
instructions. If so, the organization may be
asked to provide the missing information or
to submit an amended return.

Use Of Audit Guides May Be
Required
To ensure that all organizations report
similar transactions uniformly, many states
require that contributions, gifts, grants, etc.,
and functional expenses be reported
according to the AICPA industry audit and
accounting guide, Not-for-Profit
Organizations (New York, NY, AICPA,
2003), supplemented by Standards of
Accounting and Financial Reporting for
Voluntary Health and Welfare Organizations
(Washington, DC, National Health Council,
Inc., 1998, 4th edition).

Donated Services And Facilities
Even though reporting donated services and
facilities as items of revenue and expense is
called for in certain circumstances by the
two publications named above, many states
and the IRS do not permit the inclusion of
those amounts in Parts I and II of Form 990
or Part I of Form 990-EZ. The optional
reporting of donated services and facilities is
discussed in the instructions for Part III for
both Form 990 and Form 990-EZ.

Amended Returns
If the organization submits supplemental
information or files an amended Form 990,
or Form 990-EZ, with the IRS, it must also
send a copy of the information or amended
return to any state with which it filed a copy
of Form 990, or Form 990-EZ, originally to
meet that state’s filing requirement.

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If a state requires the organization to file
an amended Form 990, or Form 990-EZ, to
correct conflicts with Form 990, or Form
990-EZ, instructions, it must also file an
amended return with the IRS.

Method of Accounting
Most states require that all amounts be
reported based on the accrual method of
accounting. See also General Instruction G.

Time For Filing May Differ
The deadline for filing Form 990, or Form
990-EZ, with the IRS differs from the time
for filing reports with some states.

Public Inspection
The Form 990, or Form 990-EZ, information
made available for public inspection by the
IRS may differ from that made available by
the states. See the discussion of Schedule
B (Form 990, 990-EZ, or 990-PF) in General
Instruction L.

F. Other Forms as Partial
Substitutes for Form 990 or
Form 990-EZ
Except as provided below, the Internal
Revenue Service will not accept any form as
a substitute for one or more parts of Form
990 or Form 990-EZ.

Labor Organizations (section
501(c)(5))
A labor organization that files Form LM-2,
Labor Organization Annual Report, or the
shorter Form LM-3, Labor Organization
Annual Report, with the U.S. Department of
Labor (DOL) can attach a copy of the
completed DOL form to Form 990, or Form
990-EZ, to provide some of the information
required by Form 990 or Form 990-EZ. This
substitution is not permitted if the
organization files a DOL report that
consolidates its financial statements with
those of one or more separate subsidiary
organizations.

Employee Benefit Plans (Section
501(c)(9), (17), or (18))
An employee benefit plan may be able to
substitute Form 5500 for part of Form 990 or
Form 990-EZ. The substitution can be made
if the organization filing Form 990, or Form
990-EZ, and the plan filing Form 5500, meet
all the following tests:
1. The Form 990, or Form 990-EZ, filer
is organized under section 501(c)(9), (17),
or (18);
2. The Form 990, or Form 990-EZ, filer
and Form 5500 filer are identical for financial
reporting purposes and have identical
receipts, disbursements, assets, liabilities,
and equity accounts;
3. The employee benefit plan does not
include more than one section 501(c)
organization, and the section 501(c)
organization is not a part of more than one
employee benefit plan;
4. The organization’s accounting year
and the employee plan year are the same. If
they are not, the organization may want to
change its accounting year, as explained in
General Instruction G, so it will coincide with
the plan year.

General Instructions for Form 990 and Form 990-EZ

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Allowable Substitution Areas
Whether an organization files Form 990, or
Form 990-EZ, for a labor organization or for
an employee benefit plan, the areas of Form
990, or Form 990-EZ, for which other forms
can be substituted are the same. These
areas are:
Form 990.
• Lines 13 through 15 of Part I (but
complete lines 16 through 21);
• Part II; and
• Part IV (but complete lines 59, 66, and 74,
columns (A) and (B)).
Form 990-EZ.
• Lines 10 through 16 of Part I (but
complete lines 17 through 21).
• Part II (but complete lines 25 through 27,
columns (A) and (B)).
If an organization substitutes Form LM-2
or LM-3 for any of the Form 990, or Form
990-EZ, parts or line items mentioned
above, it must attach a reconciliation sheet
to show the relationship between the
amounts on the DOL forms and the amounts
on Form 990 or Form 990-EZ. This is
particularly true of the relationship of
disbursements shown on the DOL forms
and the total expenses on line 17, Part I, of
both Form 990 and Form 990-EZ. The
organization must make this reconciliation
because the cash disbursements section of
the DOL forms includes nonexpense items.
If the organization substitutes Form LM-2,
be sure to complete its separate schedule of
expenses.

G. Accounting Periods and
Methods
For more information about these

TIP topics, see Pub. 538.

Accounting Periods
Calendar year. Use the 2006 Form 990, or
Form 990-EZ, to report on the 2006
calendar year accounting period. A calendar
year accounting period begins on January 1
and ends on December 31.
Fiscal year. If the organization has
established a fiscal year accounting period,
use the 2006 Form 990, or Form 990-EZ, to
report on the organization’s fiscal year that
began in 2006 and ended 12 months later. A
fiscal year accounting period should
normally coincide with the natural operating
cycle of the organization. Be certain to
indicate in the heading of Form 990, or Form
990-EZ, the date the organization’s fiscal
year began in 2006 and the date the fiscal
year ended in 2007.
Short period. A short accounting period is
a period of less than 12 months.
If the Form 990, or Form 990-EZ, for the
short year is not available until the
subsequent year, use the prior year Form
990, or Form 990-EZ, to meet the
organization’s filing requirement. Cross out
the year on the form and show the short
year.
Accounting period change. If the
organization changes its accounting period,
it must file a return on Form 990, or Form
990-EZ, for the short period resulting from
the change. Write “Change of Accounting
Period” at the top of this short-period return.

If the organization changed its
accounting period within the
10-calendar-year period that includes the
beginning of the short period, and it had a
Form 990, or Form 990-EZ, filing
requirement at any time during that 10-year
period, it must also attach a Form 1128 to
the short-period return. See Rev. Proc.
85-58, 1985-2 C.B. 740.
Group return. When affiliated
organizations authorize their central
organization to file a group return for them,
the accounting period of the affiliated
organizations and the central organization
must be the same. See General Instruction
R.

does not conflict with the Form 990, or Form
990-EZ, instructions.
An organization should keep a
reconciliation of any differences between its
books of account and the Form 990, or
Form 990-EZ, that is filed.
Most states that accept Form 990, or
Form 990-EZ, in place of their own forms
require that all amounts be reported based
on the accrual method of accounting. For
further information, see General Instruction
E.

Accounting Methods

File Form 990, or Form 990-EZ, by the 15th
day of the 5th month after the organization’s
accounting period ends. If the regular due
date falls on a Saturday, Sunday, or legal
holiday, file on the next business day. A
business day is any day that is not a
Saturday, Sunday, or legal holiday.
If the organization is liquidated,
dissolved, or terminated, file the return by
the 15th day of the 5th month after the
liquidation, dissolution, or termination.
If the return is not filed by the due date
(including any extension granted), attach a
statement giving the reasons for not filing on
time. Send the return to the:

Unless instructed otherwise, the
organization should generally use the same
accounting method on the return to figure
revenue and expenses as it regularly uses
to keep its books and records. To be
acceptable for Form 990, or Form 990-EZ,
reporting purposes, however, the method of
accounting used must clearly reflect income.
Generally, the organization must file
Form 3115 to change its accounting
method. Notice 96-30, 1996-1 C.B. 378,
provides relief from filing Form 3115 to
section 501(c) organizations that change
their method of accounting to comply with
the provisions of SFAS 116, Accounting for
Contributions Received and Contributions
Made. In SFAS 116, the Financial
Accounting Standards Board revised certain
generally accepted accounting principles
relating to contributions received and
contributions awarded by not-for-profit
organizations.
A not-for-profit organization that
changes its method of accounting for federal
income tax purposes to conform to the
method provided in SFAS 116 should report
any adjustment required by section 481(a)
on line 20 of Form 990, or Form 990-EZ, as
a net asset adjustment made during the
year the change is made. The adjustment
should be identified as the effect of
changing to the method provided in SFAS
116. The beginning of year statement of
financial position (balance sheet) should not
be restated to reflect any prior period
adjustments.
State reporting. If the organization
prepares Form 990, or Form 990-EZ, for
state reporting purposes, it may file an
identical return with the IRS even though the
return does not agree with the books of
account, unless the way one or more items
are reported on the state return conflicts
with the instructions for preparing Form 990,
or Form 990-EZ, for filing with the IRS.
Example 1. The organization maintains
its books on the cash receipts and
disbursements method of accounting but
prepares a state return based on the accrual
method. It could use that return for reporting
to the IRS.
Example 2. A state reporting
requirement requires the organization to
report certain revenue, expense, or balance
sheet items differently from the way it
normally accounts for them on its books. A
Form 990, or Form 990-EZ, prepared for
that state is acceptable for the IRS reporting
purposes if the state reporting requirement

General Instructions for Form 990 and Form 990-EZ

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H. When, Where, and How To
File

Internal Revenue Service Center
Ogden, UT 84201-0027
Private delivery services. The
organization can use certain private delivery
services designated by the IRS to meet the
“timely mailing as timely filing/paying” rule
for tax returns and payments. These private
delivery services include only the following.
• DHL Express (DHL): DHL “Same Day”
Service, DHL Next Day 10:30 AM, DHL Next
Day 12:00 PM, DHL Next Day 3:00 PM, and
DHL 2nd Day Service.
• Federal Express (FedEx): FedEx Priority
Overnight, FedEx Standard Overnight,
FedEx 2Day, FedEx International Priority,
FedEx International First.
• United Parcel Service (UPS): UPS Next
Day Air, UPS Next Day Air Saver, UPS 2nd
Day Air, UPS 2nd Day Air A.M., UPS
Worldwide Express Plus, and UPS
Worldwide Express.
The private delivery service can tell you
how to get written proof of the mailing date.

Electronic Filing
The organization can file Form 990, or Form
990-EZ, and related forms, schedules, and
attachments electronically. However, if an
organization files at least 250 returns during
the calendar year and has total assets of
$10 million or more at the end of the tax
year, it must file Form 990 electronically.
To determine if the organization meets
the $10 million asset test, use the amount
that will be entered on line 59 (total assets),
column (B).
If an organization is required to file a
return electronically but does not, the
organization is considered to have not filed
its return. See Temporary Regulations
section 301.6033-4T for more information.
For additional information on the
electronic filing requirement, visit www.irs.
gov/efile.

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The IRS may waive the requirements

TIP to file electronically in cases of
undue hardship. For information on
filing a waiver, see Notice 2005-88, 2005-48
I.R.B. 1060.

I. Extension of Time To File
Use Form 8868 to request an automatic
3-month extension of time to file. Use Form
8868 also to apply for an additional (not
automatic) 3-month extension if the original
3 months was not enough time. To obtain
this additional extension of time to file, the
organization must show reasonable cause
for the additional time requested. See the
Instructions for Form 8868.

J. Amended Return / Final
Return
To change the organization’s return for any
year, file a new return including any required
attachments. Use the revision of Form 990,
or Form 990-EZ, applicable to the year
being amended. The amended return must
provide all the information called for by the
form and instructions, not just the new or
corrected information. Check the Amended
return box in the heading of the return.
The organization may file an amended
return at any time to change or add to the
information reported on a previously filed
return for the same period. It must make the
amended return available for public
inspection for 3 years from the date of filing
or 3 years from the date the original return
was due, whichever is later.
The organization must also send a copy
of the information or amended return to any
state with which it filed a copy of Form 990,
or Form 990-EZ, originally to meet that
state’s filing requirement.
Use Form 4506 to obtain a copy of a
previously filed return. For information on
getting blank tax forms, see General
Instruction D.
If the return is a final return, see the
Specific Instructions for Form 990 for line
79, Part VI. For Form 990-EZ, see the
Specific Instructions for line 36, Part V.

K. Failure to File Penalties
Against the Organization
Under section 6652(c)(1)(A), a penalty of
$20 a day, not to exceed the smaller of
$10,000 or 5% of the gross receipts of the
organization for the year, may be charged
when a return is filed late, unless the
organization can show that the late filing
was due to reasonable cause. Organizations
with annual gross receipts exceeding $1
million are subject to a penalty of $100 for
each day the failure continues (with a
maximum penalty with respect to any one
return of $50,000). The penalty begins on
the due date for filing the Form 990 or Form
990-EZ.
The penalty may also be charged if the
organization files an incomplete return. To
avoid having to supply missing information
later, be sure to complete all applicable line
items; answer “Yes,” “No,” or “N/A” (not
applicable) to each question on the return;
make an entry (including a zero when

appropriate) on all total lines; and enter
“None” or “N/A” if an entire part does not
apply.
Also, this penalty may be imposed if the
organization’s return contains incorrect
information. For example, an organization
that reports contributions net of related
fundraising expenses may be subject to this
penalty.
Use of a paid preparer does not relieve
the organization of its responsibility to file a
complete and accurate return.

Against Responsible Person(s)
If the organization does not file a complete
return or does not furnish correct
information, the IRS will send the
organization a letter that includes a fixed
time to fulfill these requirements. After that
period expires, the person failing to comply
will be charged a penalty of $10 a day. The
maximum penalty on all persons for failures
with respect to any one return shall not
exceed $5,000 (section 6652(c)(1)(B)(ii)).
Any person who does not comply with
the public inspection requirements, as
discussed in General Instruction M, will be
assessed a penalty of $20 for each day that
inspection was not permitted, up to a
maximum of $10,000 for each return. The
penalties for failure to comply with the public
inspection requirements for applications is
the same as those for annual returns,
except that the $10,000 limitation does not
apply (sections 6652(c)(1)(C) and (D)). Any
person who willfully fails to comply with the
public inspection requirements for annual
returns or exemption applications will be
subject to an additional penalty of $5,000
(section 6685).
There are also penalties (fines and
imprisonment) for willfully not filing returns
and for filing fraudulent returns and
statements with the IRS (sections 7203,
7206, and 7207). States may impose
additional penalties for failure to meet their
separate filing requirements. See also the
discussion of the Trust Fund Recovery
Penalty, under General Instruction D.

easily recognizable format whether the
solicitation is made in written or printed
form, by television or radio, or by telephone.
This provision applies only to those
organizations whose annual gross receipts
are normally more than $100,000 (section
6113 and Notice 88-120, 1988-2 C.B. 454).
Failure to disclose that contributions are
not deductible could result in a penalty of
$1,000 for each day on which a failure
occurs. The maximum penalty for failures by
any organization, during any calendar year,
shall not exceed $10,000. In cases where
the failure to make the disclosure is due to
intentional disregard of the law, more severe
penalties apply. No penalty will be imposed
if the failure is due to reasonable cause
(section 6710).

Keeping Fundraising Records for
Tax-Deductible Contributions
Section 501(c) organizations that are eligible
to receive tax-deductible contributions under
section 170(c) of the Code must keep
sample copies of their fundraising materials,
such as:
• Dues statements,
• Fundraising solicitations,
• Tickets,
• Receipts, or
• Other evidence of payments received in
connection with fundraising activities.
IF . . .

THEN . . .

Organizations advertise They must keep
their fundraising events, samples of the
advertising copy.
Organizations use radio They must keep
or television to make
samples of:
their solicitations,
• Scripts,
• Transcripts, or
• Other evidence of
on-air solicitations.
Organizations use
outside fundraisers,

They must keep
samples of the
fundraising materials
used by the outside
fundraisers.

L. Contributions
Schedule B (Form 990, 990-EZ, or
990-PF)
Schedule B (Form 990, 990-EZ, or 990-PF),
generally, is a required attachment for the
Form 990, 990-EZ, or 990-PF, and is used
to report on tax-deductible and
non-tax-deductible contributions. See the
Instructions for Schedule B for the public
inspection rules applicable to that form. See
also the Specific Instructions for both Form
990 and Form 990-EZ, under Completing
the Heading . . . where the instructions are
keyed to items in the heading of Form 990
or Form 990-EZ.

Solicitations of Nondeductible
Contributions
Any fundraising solicitation by or on behalf
of any section 501(c) or 527 organization
that is not eligible to receive contributions
deductible as charitable contributions for
federal income tax purposes must include
an explicit statement that contributions or
gifts to it are not deductible as charitable
contributions. The statement must be in an

-8-

For each fundraising event, organizations
must keep records to show the portion of
any payment received from patrons that is
not deductible; that is, the retail value of the
goods or services received by the patrons.
See Disclosure statement for quid pro quo
contributions, later.

Noncash Contributions
See the Instructions for Schedule B (Form
990, 990-EZ, or 990-PF).
If the organization received a partially
completed Form 8283 from a donor,
complete it and return it so the donor can
get a charitable contribution deduction. The
organization should keep a copy for its
records. See also the reference to Form
8282 in General Instruction D.
Qualified intellectual property. An
organization described in section 170(c)
(except a private foundation) that receives
or accrues net income from a qualified
intellectual property contribution must file
Form 8899. The organization must file the
return for any tax year that includes any part
of the 10-year period beginning on the date

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of contribution but not for any tax years in
which the legal life of the qualified
intellectual property has expired or the
property failed to produce net income.
An organization (donee) reports all
income from donated qualified intellectual
property as income other than contributions
(for example, royalty income from a patent).
Charities are not required to report as
contributions any of the additional
deductions claimed by donors under
section 170(m)(1). Likewise, these
additional deductions are not required to be
reported on Schedule B (Form 990, 990-EZ,
or 990-PF) and donees are not required to
comply with the substantiation requirements
of section 170(f)(8) with regard to any
donor’s additional deductions. See Pub.
526.
Motor vehicles, boats, and airplanes.
Special rules apply to charitable
contributions of motor vehicles, boats, or
airplanes with a claimed value of more than
$500. See section 170(f)(12) and the
Instructions for Form 1098-C.

Substantiation and Disclosure
Requirements for Charitable
Contributions
Acknowledgment to substantiate
charitable contributions. An organization
(donee) should be aware that a donor of a
charitable contribution of $250 or more
cannot take an income tax deduction unless
the donor obtains the organization’s
acknowledgment to substantiate the
charitable contribution.
The organization’s acknowledgment
must:
1. Be written.
2. Be contemporaneous.
3. State the amount of any cash it
received.
4. State:
a. Whether the organization gave the
donor any intangible religious benefits (no
valuation needed).
b. Whether or not the organization gave
the donor any goods or services in return for
the donor’s contribution (a quid pro quo
contribution).
5. Describe goods or services the
organization:
a. Received (no valuation needed).
b. Gave (good faith estimate needed).
Exception. An organization need not
make a good faith estimate of a quid pro
quo contribution if the goods or services
given to a donor are:
• Insubstantial in value.
• Certain membership benefits for $75 or
less per year. See Certain membership
benefits, later.
• Certain goods or services given to the
donor’s employees or partners.
Disclosure statement for quid pro quo
contributions. If the organization receives
a quid pro quo contribution of more than
$75, an organization must provide a
disclosure statement to the donor. The
organization’s disclosure statement must:
1. Be written.
2. Estimate in good faith the
organization’s goods or services given in
return for donor’s contribution.

3. Describe, but need not value, certain
goods or services given donor’s employees
or partners.
4. Inform the donor that a deductible
charitable contribution deduction is limited
as follows:
Donor’s contribution
Less
Organization’s money, and goods or services
given in return
Equals
Donor’s deductible charitable contribution.

Exception. No disclosure statement is
required if the organization gave the
following.
1. Goods or services of insubstantial
value.
2. Certain membership benefits.
3. An intangible religious benefit.
See Regulations sections 1.170A-1,
1.170A-13, and 1.6115-1.
Certain goods or services disregarded
for substantiation and disclosure
purposes.
Goods or services with insubstantial
value. Generally, under section 170, the
deductible amount of a contribution is
determined by taking into account the fair
market value, not the cost to the charity, of
any benefits received in return. However,
the cost to the charity may be used in
determining whether the benefits are
insubstantial. See below.
Cost basis. If a taxpayer makes a
payment of $43 or more to a charity and
receives only token items in return, the
items have insubstantial value if they:
• Bear the charity’s name or logo, and
• Have an aggregate cost to the charity of
$8.60 or less (low-cost article amount of
section 513(h)(2)).
Fair market value basis. If a taxpayer
makes a payment to a charitable
organization in a fundraising campaign and
receives benefits with a fair market value of
not more than 2% of the amount of the
payment, or $86, whichever is less, the
benefits received have insubstantial value in
determining the taxpayer’s contribution.
The dollar amounts given above are

TIP applicable to tax year 2006 under
Rev. Proc. 2005-70, 2005-47 I.R.B.
979 (and other successor documents). They
are adjusted annually for inflation.
When a donee organization provides a
donor only with goods or services having
insubstantial value under Rev. Proc.
2005-70 (and any successor documents),
the contemporaneous written
acknowledgment may indicate that no goods
or services were provided in exchange for
the donor’s payment.
Certain membership benefits. Other
goods or services that are disregarded for
substantiation and disclosure purposes are
annual membership benefits offered to a
taxpayer in exchange for a payment of $75
or less per year that consist of:
1. Any rights or privileges that the
taxpayer can exercise frequently during the
membership period such as:

General Instructions for Form 990 and Form 990-EZ

-9-

a. Free or discounted admission to the
organization’s facilities or events,
b. Free or discounted parking.
2. Admission to events that are:
a. Open only to members, and are, per
person,
b. Within the low-cost article limitation.
Examples.
1. E offers a basic membership benefits
package for $75. The package gives
members the right to buy tickets in advance,
free parking, and a gift shop discount of
10%. E’s $150 preferred membership
benefits package also includes a $20 poster.
Both the basic and preferred membership
packages are for a 12-month period and
include about 50 productions. E offers F, a
patron of the arts, the preferred membership
benefits in return for a payment of $150 or
more. F accepts the preferred membership
benefits package for $300. E’s written
acknowledgment satisfies the substantiation
requirement if it describes the poster, gives
a good faith estimate of its fair market value
($20), and disregards the remaining
membership benefits.
2. If F received only the basic
membership package for its $300 payment,
E’s acknowledgment need state only that no
goods or services were provided.
3. G Theater Group performs four plays.
Each play is performed twice. Nonmembers
can purchase a ticket for $15. For a $60
membership fee, however, members are
offered free admission to any of the
performances. H makes a payment of $350
and accepts this membership benefit.
Because of the limited number of
performances, the membership privilege
cannot be exercised frequently. Therefore,
G’s acknowledgment must describe the free
admission benefit and estimate its value in
good faith.
Certain goods or services provided to
donor’s employees or partners. Certain
goods or services provided to employees or
partners of donors may be disregarded for
substantiation and disclosure purposes.
Describe such goods or services. A good
faith estimate is not needed.
Example. Museum J offers a basic
membership benefits package for $40. It
includes free admission and a 10% gift shop
discount. Corporation K makes a $50,000
payment to J and in return, J offers K’s
employees free admission, a tee shirt with
J’s logo that costs J $4.50, and a 25% gift
shop discount. Because the free admission
is offered in both benefit packages and the
value of the tee shirts is insubstantial, K’s
written acknowledgment need not value the
free admission benefit or the tee shirts.
However, because the 25% gift shop
discount to K’s employees differs from the
10% discount offered in the basic
membership benefits package, K’s written
acknowledgment must describe the 25%
discount, but need not estimate its value.
Definitions.
Substantiation. It is the responsibility of
the donor:
• To value a donation, and
• To obtain an organization’s written
acknowledgment substantiating the
donation.

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There is no prescribed format for the
organization’s written acknowledgment of a
donation. Letters, postcards, or
computer-generated forms may be
acceptable. The acknowledgment must,
however, provide sufficient information to
substantiate the amount of the deductible
contribution.
The organization may either provide:
• Separate statements for each contribution
of $250 or more, or
• Furnish periodic statements
substantiating contributions of $250 or more.
Separate contributions of less than $250
are not subject to the requirements of
section 170(f)(8), regardless of whether the
sum of the contributions made by a taxpayer
to a donee organization during a tax year
equals $250 or more.
Contemporaneous. A written
acknowledgment is contemporaneous if the
donor obtains it on or before the earlier of:
• The date the donor files the original return
for the tax year in which the contribution was
made, or
• The due date (including extensions) for
filing the donor’s original return for that year.
Substantiation of payroll
contributions. An organization may
substantiate a payroll contribution by:
• A pay stub, Form W-2, or other document
showing a contribution to a donee
organization; and
• A pledge card or other document from the
donee organization stating that organization
provides no goods or services for any
payroll contributions.
The amount withheld from each payment
of wages to a taxpayer is treated as a
separate contribution.
Substantiation of payments to a
college or university for the right to
purchase tickets to athletic events. The
right to purchase tickets for an athletic event
is valued at 20% of the payment.
Example. When a taxpayer pays
$312.50 for the right to purchase tickets for
an athletic event, the right is valued at
$62.50. The remaining $250 is a charitable
contribution that the taxpayer must
substantiate.
Substantiation of matched payments.
If a taxpayer’s payment to a donee
organization is matched by another payor,
and the taxpayer receives goods or services
in consideration for its payment and some or
all of the matching payment, those goods or
services will be treated as provided in
consideration for the taxpayer’s payment
and not in consideration for the matching
payment.
Disclosure statement. An organization
must provide a written disclosure statement
to donors who make a payment, described
as a quid pro quo contribution, in excess of
$75 (section 6115). This requirement is
separate from the written substantiation
acknowledgment a donor needs for
deductibility purposes. While, in certain
circumstances, an organization may be able
to meet both requirements with the same
written document, an organization must be
careful to satisfy the section 6115 written
disclosure statement requirement in a timely
manner because of the penalties involved.
Quid pro quo contribution. A quid pro
quo contribution is a payment that is given

both as a contribution and as a payment for
goods or services provided by the donee
organization.
Example. A donor gives a charity $100
in consideration for a concert ticket valued
at $40 (a quid pro quo contribution). In this
example, $60 would be deductible. Because
the donor’s payment exceeds $75, the
organization must furnish a disclosure
statement even though the taxpayer’s
deductible amount does not exceed $75.
Separate payments of $75 or less made at
different times of the year for separate
fundraising events will not be aggregated for
purposes of the $75 threshold.
Good faith estimate. An organization
may use any reasonable method in making
a good faith estimate of the value of goods
or services provided by an organization in
consideration for a taxpayer’s payment to
that organization. A good faith estimate of
the value of goods or services that are not
generally available in a commercial
transaction may be determined by reference
to the fair market value of similar or
comparable goods or services. Goods or
services may be similar or comparable even
though they do not have the unique qualities
of the goods or services that are being
valued.
Goods or services. Goods or services
are:
• Cash,
• Property,
• Services,
• Benefits, and
• Privileges.
In consideration for. A donee
organization provides goods or services in
consideration for a taxpayer’s payment if, at
the time the taxpayer makes the payment to
the donee organization, the taxpayer
receives, or expects to receive, goods or
services in exchange for that payment.
Goods or services a donee organization
provides in consideration for a payment by a
taxpayer include goods or services provided
in a year other than the year in which the
donor makes the payment to the donee
organization.
Intangible religious benefits.
Intangible religious benefits must be
provided by organizations organized
exclusively for religious purposes. Examples
include:
• Admission to a religious ceremony, and
• De minimis tangible benefits, such as
wine, provided in connection with a religious
ceremony.
Distributing organization as donee.
An organization described in section 170(c),
or an organization described as a Principal
Combined Fund Organization for purposes
of the Combined Federal Campaign, that
receives a payment made as a contribution
is treated as a donee organization even if
the organization distributes the amount
received to one or more organizations
described in section 170(c).
Penalties. A charity that knowingly
provides a false substantiation
acknowledgment to a donor may be subject
to the penalties under section 6701 for
aiding and abetting an understatement of
tax liability.
Charities that fail to provide the required
disclosure statement for a quid pro quo

-10-

contribution of more than $75 will incur a
penalty of $10 per contribution, not to
exceed $5,000 per fundraising event or
mailing. The charity may avoid the penalty if
it can show that the failure was due to
reasonable cause (section 6714).

M. Public Inspection of
Returns, etc.
Some members of the public rely on Form
990, or Form 990-EZ, as the primary or sole
source of information about a particular
organization. How the public perceives an
organization in such cases may be
determined by the information presented on
its returns.
An organization’s completed Form 990,
or Form 990-EZ is available for public
inspection as required by section 6104.
Schedule B (Form 990, 990-EZ, or 990-PF),
is open for public inspection for section 527
organizations filing Form 990 or Form
990-EZ. For other organizations that file
Form 990 or Form 990-EZ, parts of
Schedule B may be open to public
inspection. Form 990-T filed after August 17,
2006, by a 501(c)(3) organization is also
available for public inspection and
disclosure.

Through the IRS
Use Form 4506-A to request:
• A copy of an exempt or political
organization’s return, report, notice, or
exemption application;
• An inspection of a return, report, notice, or
exemption application at an IRS office.
The IRS can provide copies of exempt
organization returns on a compact disc
(CD). Requesters can order the complete
set (all Forms 990 and 990-EZ or all Forms
990-PF filed for a year) or a partial set by
state or by month. For more information on
the cost and how to order CDs, call the
TEGE Customer Account Services toll-free
number (1-877-829-5500) or write to the IRS
in Cincinnati, OH, at the address in General
Instruction A.
The IRS may not disclose portions of an
exemption application relating to any trade
secrets, etc. Additionally, the IRS may not
disclose the names and addresses of
contributors. See the Instructions for
Schedule B (Form 990, 990-EZ, or 990-PF)
for more information about the disclosure of
that schedule.
Forms 990 or 990-EZ can only be
requested for section 527 organizations for
tax years beginning after June 30, 2000.
A return, report, notice, or exemption
application may be inspected at an IRS
office free of charge. Copies of these items
may also be obtained through the
organization as discussed in the following
section.

Through the Organization
Public inspection and distribution of
certain returns of unrelated business
income. Section 501(c)(3) organizations
that are required to file Form 990-T after
August 17, 2006, must make Form 990-T
available for public inspection under section
6104(d)(1)(A)(ii).
Public inspection and distribution of
returns and reports for a political

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organization. Section 527 political
organizations required to file Form 990, or
Form 990-EZ, must, in general, make their
Form 8871, 8872, 990, or 990-EZ available
for public inspection in the same manner as
annual information returns of section 501(c)
organizations and 4947(a)(1) nonexempt
charitable trusts are made available. See
the public inspection rules for Tax-exempt
organization, later. Generally, Form 8871
and Form 8872 are available for inspection
and printing from the Internet. The website
address for both of these forms is http://
eforms.irs.gov.
Note that a section 527 political

TIP organization (and an organization
filing Form 990-PF) must disclose
their Schedule B (Form 990, 990-EZ, or
990-PF). See the Instructions for Schedule
B.
The penalties discussed in General
Instruction K also apply to section 527
political organizations (Rev. Rul. 2003-49,
2003-204 I.R.B. 903).
Public inspection and distribution of
applications for tax exemption and
annual information returns of tax-exempt
organizations. Under Regulations sections
301.6104(d)-1 through 301.6104(d)-3, a
tax-exempt organization must:
• Make its application for recognition of
exemption and its annual information returns
available for public inspection without
charge at its principal, regional and district
offices during regular business hours.
• Make each annual information return
available for a period of 3 years beginning
on the date the return is required to be filed
(determined with regard to any extension of
time for filing) or is actually filed, whichever
is later.
• Provide a copy without charge, other than
a reasonable fee for reproduction and actual
postage costs, of all or any part of any
application or return required to be made
available for public inspection to any
individual who makes a request for such
copy in person or in writing (except as
provided in Regulations sections
301.6104(d)-2 and -3).
Definitions.
Tax-exempt organization is any
organization that is described in section
501(c) or (d) and is exempt from taxation
under section 501(a). The term tax-exempt
organization also includes any section
4947(a)(1) nonexempt charitable trust or
nonexempt private foundation that is subject
to the reporting requirements of section
6033.
Application for tax exemption
includes:
• Any prescribed application form (such as
Form 1023 or Form 1024),
• All documents and statements the IRS
requires an applicant to file with the form,
• Any statement or other supporting
document submitted in support of the
application, and
• Any letter or other document issued by
the IRS concerning the application.
Application for tax exemption does
not include:

• Any application for tax exemption filed
before July 15, 1987, unless the

organization filing the application had a copy
of the application on July 15, 1987;
• In the case of a tax-exempt organization
other than a private foundation, the name
and address of any contributor to the
organization; or
• Any material that is not available for
public inspection under section 6104.

!

CAUTION

If there is no prescribed application
form, see Regulations section
301.6104(d)-1(b)(4)(i).

Annual information return includes:

• An exact copy of the Form 990, or Form

990-EZ, filed by a tax-exempt organization
as required by section 6033.
• Any amended return the organization files
with the IRS after the date the original return
is filed.
The copy must include all information
furnished to the IRS on Form 990, or Form
990-EZ, as well as all schedules,
attachments and supporting documents,
except for the name and address of any
contributor to the organization. See the
Instructions for Schedule B (Form 990,
990-EZ, or 990-PF).
Annual returns more than 3 years old.
An annual information return does not
include any return after the expiration of 3
years from the date the return is required to
be filed (including any extension of time that
has been granted for filing such return) or is
actually filed, whichever is later.
If an organization files an amended
return, however, the amended return must
be made available for a period of 3 years
beginning on the date it is filed with the IRS.
Local or subordinate organizations.
For rules relating to annual information
returns of local or subordinate organizations,
see Regulations section 301.6104(d)-1(f)(2).
Regional or district offices. A regional
or district office is any office of a tax-exempt
organization, other than its principal office,
that has paid employees, whether part-time
or full-time, whose aggregate number of
paid hours a week are normally at least 120.
A site is not considered a regional or
district office, however, if:
• The only services provided at the site
further exempt purposes (such as day care,
health care or scientific or medical
research); and
• The site does not serve as an office for
management staff, other than managers
who are involved solely in managing the
exempt function activities at the site.
Special rules relating to public
inspection.
Permissible conditions on public
inspection. A tax-exempt organization:
• May have an employee present in the
room during an inspection.
• Must allow the individual conducting the
inspection to take notes freely during the
inspection.
• Must allow the individual to photocopy the
document at no charge, if the individual
provides photocopying equipment at the
place of inspection.
Organizations that do not maintain
permanent offices. A tax-exempt
organization with no permanent office:

General Instructions for Form 990 and Form 990-EZ

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• Must make its application for tax
exemption and its annual information returns
available for inspection at a reasonable
location of its choice.
• Must permit public inspection within a
reasonable amount of time after receiving a
request for inspection (normally not more
than 2 weeks) and at a reasonable time of
day.
• May mail, within 2 weeks of receiving the
request, a copy of its application for tax
exemption and annual information returns to
the requester instead of allowing an
inspection.
• May charge the requester for copying and
actual postage costs only if the requester
consents to the charge.
An organization that has a permanent
office, but has no office hours, or very
limited hours during certain times of the
year, must make its documents available
during those periods when office hours are
limited, or not available, as though it were
an organization without a permanent office.
Special rules relating to copies.
Time and place for providing copies in
response to requests made in-person. A
tax-exempt organization must:
• Provide copies of required documents
under section 6104(d) in response to a
request made in person at its principal,
regional and district offices during regular
business hours.
• Provide such copies to a requester on the
day the request is made, except for unusual
circumstances (see below).
Unusual circumstances. In the case of
an in-person request, where unusual
circumstances exist so that fulfilling the
request on the same business day causes
an unreasonable burden to the tax-exempt
organization, the organization must provide
the copies no later than the next business
day following the day that the unusual
circumstances cease to exist, or the 5th
business day after the date of the request,
whichever occurs first.
Unusual circumstances include:

• Requests received that exceed the

organization’s daily capacity to make copies;

• Requests received shortly before the end

of regular business hours that require an
extensive amount of copying; or
• Requests received on a day when the
organization’s managerial staff capable of
fulfilling the request is conducting special
duties, such as student registration or
attending an off-site meeting or convention,
rather than its regular administrative duties.

Agents for providing copies. For rules
relating to use of agents to provide copies,
see Regulations sections
301.6104(d)-1(d)(1) and (2).
Request for copies in writing. A
tax-exempt organization must honor a
written request for a copy of documents (or
the requested part) required under section
6104(d) if the request:
1. Is addressed to, and delivered by
mail, electronic mail, facsimile, or a private
delivery service, as defined in section
7502(f), to a principal, regional, or district
office of the organization; and
2. Sets forth the address to which the
copy of the documents should be sent.

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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
Is deemed to have
transmitted by electronic received it the day the
mail or facsimile,
request is transmitted
successfully.
Receives a written
request without payment
or with an insufficient
payment, when payment
in advance is required,

Must notify the
requester of the
prepayment policy and
the amount due 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
document. A tax-exempt organization must
fulfill a request for a copy of the
organization’s entire application for tax
exemption or annual information return or
any specific part or schedule of its
application or return. A request for a copy of
less than the entire application or less than
the entire return must specifically identify the
requested part or schedule.
Fees for copies. A tax-exempt
organization may charge a reasonable fee
for providing copies.
Before the organization provides the
documents, it may require that the individual
requesting copies of the documents pay the
fee. If the organization has provided an
individual making a request with notice of
the fee, and the individual does not pay the
fee within 30 days, or if the individual pays
the fee by check and the check does not
clear upon deposit, the organization may
disregard the request.
Form of payment — (A) Request made
in person. If a tax-exempt organization

charges a fee for copying, it must accept
payment by cash and money order for
requests made in person. The organization
may accept other forms of payment, such as
credit cards and personal checks.
(B) Request made in writing. If a
tax-exempt organization charges a fee for
copying and postage, it must accept
payment by certified check, money order,
and either personal check or credit card for
requests made in writing. The organization
may accept other forms of payment.
Avoidance of unexpected fees. Where
a tax-exempt organization does not require
prepayment and a requester does not
enclose payment with a request, an
organization must receive consent from a
requester before providing copies for which
the fee charged for copying and postage
exceeds $20.
Documents to be provided by regional
and district offices. Except as otherwise
provided, a regional or district office of a
tax-exempt organization must satisfy the
same rules as the principal office with
respect to allowing public inspection and
providing copies of its application for tax
exemption and annual information returns.
A regional or district office is not
required, however, to make its annual
information return available for inspection or
to provide copies until 30 days after the date
the return is required to be filed (including
any extension of time that is granted for
filing such return) or is actually filed,
whichever is later.
Documents to be provided by local
and subordinate organizations.
Applications for tax exemption. Except as
otherwise provided, a tax-exempt
organization that did not file its own
application for tax exemption (because it is a
local or subordinate organization covered by
a group exemption letter) must, upon
request, make available for public
inspection, or provide copies of, the
application submitted to the IRS by the
central or parent organization to obtain the
group exemption letter and those
documents which were submitted by the
central or parent organization to include the
local or subordinate organization in the
group exemption letter.
However, if the central or parent
organization submits to the IRS a list or
directory of local or subordinate
organizations covered by the group
exemption letter, the local or subordinate
organization is required to provide only the
application for the group exemption ruling
and the pages of the list or directory that
specifically refer to it. The local or
subordinate organization must permit public
inspection, or comply with a request for
copies made in person, within a reasonable
amount of time (normally not more than 2
weeks) after receiving a request made in
person for public inspection or copies and at
a reasonable time of day. See Regulations
section 301.6104(d)-1(f) for further
information.
Annual information returns. A local or
subordinate organization that does not file
its own annual information return (because it
is affiliated with a central or parent
organization that files a group return) must,
upon request, make available for public

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inspection, or provide copies of, the group
returns filed by the central or parent
organization.
However, if the group return includes
separate schedules with respect to each
local or subordinate organization included in
the group return, the local or subordinate
organization receiving the request may omit
any schedules relating only to other
organizations included in the group return.
The local or subordinate organization
must permit public inspection, or comply
with a request for copies made in person,
within a reasonable amount of time
(normally not more than 2 weeks) after
receiving a request made in person for
public inspection or copies and at a
reasonable time of day.
In a case where the requester seeks
inspection, the local or subordinate
organization may mail a copy of the
applicable documents to the requester
within the same time period instead of
allowing an inspection. In such a case, the
organization may charge the requester for
copying and actual postage costs only if the
requester consents to the charge.
If the local or subordinate organization
receives a written request for a copy of its
annual information return, it must fulfill the
request by providing a copy of the group
return in the time and manner specified in
the paragraph earlier, Request for copies in
writing.
The requester has the option of
requesting from the central or parent
organization, at its principal office,
inspection or copies of group returns filed by
the central or parent organization. The
central or parent organization must fulfill
such requests in the time and manner
specified in the paragraphs, Special rules
relating to public inspection and Special
rules relating to copies earlier.
Failure to comply. If an organization
fails to comply with the requirements
specified in this paragraph, the penalty
provisions of sections 6652(c)(1)(C),
6652(c)(1)(D), and 6685 apply.
Making applications and returns widely
available. A tax-exempt organization is not
required to comply with a request for a copy
of its application for tax exemption or an
annual information return if the organization
has made the requested document widely
available (see below).
An organization that makes its
application for tax exemption and/or annual
information return widely available must
nevertheless make the document available
for public inspection as required under
Regulations section 301.6104(d)-1(a).
A tax-exempt organization makes its
application for tax exemption and/or an
annual information return widely available if
the organization complies with the Internet
posting requirements and the notice
requirements given below.
Internet posting. A tax-exempt
organization can make its application for tax
exemption and/or an annual information
return widely available by posting the
document on a World Wide Web page that
the tax-exempt organization establishes and
maintains or by having the document
posted, as part of a database of similar

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documents of other tax-exempt
organizations, on a World Wide Web page
established and maintained by another
entity. The document will be considered
widely available only if:
• The World Wide Web page through which
it is available clearly informs readers that the
document is available and provides
instructions for downloading it;
• The document is posted in a format that,
when accessed, downloaded, viewed and
printed in hard copy, exactly reproduces the
image of the application for tax exemption or
annual information return as it was originally
filed with the IRS, except for any information
permitted by statute to be withheld from
public disclosure; and
• Any individual with access to the Internet
can access, download, view and print the
document without special computer
hardware or software required for that
format (other than software that is readily
available to members of the public without
payment of any fee) and without payment of
a fee to the tax-exempt organization or to
another entity maintaining the World Wide
Web page.
Reliability and accuracy. In order for
the document to be widely available through
an Internet posting, the entity maintaining
the World Wide Web page must have
procedures for ensuring the reliability and
accuracy of the document that it posts on
the page and must take reasonable
precautions to prevent alteration, destruction
or accidental loss of the document when
posted on its page. In the event that a
posted document is altered, destroyed or
lost, the entity must correct or replace the
document.
Notice requirement. If a tax-exempt
organization has made its application for tax
exemption and/or an annual information
return widely available, it must notify any
individual requesting a copy where the
documents are available (including the
address on the World Wide Web, if
applicable). If the request is made in person,
the organization must provide such notice to
the individual immediately. If the request is
made in writing, the notice must be provided
within 7 days of receiving the request.
Tax-exempt organization subject to
harassment campaign. If the Director EO
Examination (or designee) determines that
the organization is being harassed, a
tax-exempt organization is not required to
comply with any request for copies that it
reasonably believes is part of a harassment
campaign.
Whether a group of requests constitutes
a harassment campaign depends on the
relevant facts and circumstances such as:
A sudden increase in requests; an
extraordinary number of requests by form
letters or similarly worded correspondence;
hostile requests; evidence showing bad faith
or deterrence of the organization’s exempt
purpose; prior provision of the requested
documents to the purported harassing
group; and a demonstration that the
organization routinely provides copies of its
documents upon request.
A tax-exempt organization may disregard
any request for copies of all or part of any
document beyond the first two received
within any 30-day period or the first four

received within any 1-year period from the
same individual or the same address,
regardless of whether the Director EO
Examination (or designee) has determined
that the organization is subject to a
harassment campaign.
A tax-exempt organization may apply for
a determination that it is the subject of a
harassment campaign and that compliance
with requests that are part of the campaign
would not be in the public interest by
submitting a signed application to the
Director EO Examination (or designee) for
the area where the organization’s principal
office is located.
In addition, the organization may
suspend compliance with any request it
reasonably believes to be part of the
harassment campaign until it receives a
response to its application for a harassment
campaign determination. However, if the
Director EO Examination (or designee)
determines that the organization did not
have a reasonable basis for requesting a
determination that it was subject to a
harassment campaign or reasonable belief
that a request was part of the campaign, the
officer, director, trustee, employee, or other
responsible individual of the organization
remains liable for any penalties for not
providing the copies in a timely fashion. See
Regulations section 301.6104(d)-3.

N. Disclosures Regarding
Certain Information and
Services Furnished
A section 501(c) organization that offers to
sell or solicits money for specific information
or for a routine service for any individual that
could be obtained by such individual from a
federal government agency free or for a
nominal charge, must disclose that fact
conspicuously when making such offer or
solicitation. Any organization that
intentionally disregards this requirement will
be subject to a penalty for each day on
which the offers or solicitations are made.
The penalty imposed for a particular day is
the greater of $1,000 or 50% of the total
cost of the offers and solicitations made on
that day that lacked the required disclosure
(section 6711).

O. Disclosures Regarding
Certain Transactions and
Relationships
In their annual returns on Schedule A (Form
990 or 990-EZ), section 501(c)(3)
organizations must disclose information
regarding their direct or indirect transfers to,
and other direct or indirect relationships
with, other section 501(c) organizations
(except other section 501(c)(3)
organizations) or section 527 political
organizations (section 6033(b)(9)). This
provision helps prevent the diversion or
expenditure of a section 501(c)(3)
organization’s funds for purposes not
intended by section 501(c)(3). All section
501(c)(3) organizations must maintain
records regarding all such transfers,
transactions, and relationships. See also
General Instruction K regarding penalties.

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P. Intermediate Sanction
Regulations—Excess Benefit
Transactions
The intermediate sanction regulations are
important to the exempt organization
community as a whole, and for ensuring
compliance in this area. The rules provide a
roadmap by which an organization may
steer clear of situations that may give rise to
inurement.
Under section 4958, any disqualified
person who benefits from an excess benefit
transaction with an applicable tax-exempt
organization is liable for a 25% tax on the
excess benefit. The disqualified person is
also liable for a 200% tax on the excess
benefit if the excess benefit is not corrected
by a certain date. Also, organization
managers who participate in an excess
benefit transaction knowingly, willfully, and
without reasonable cause are liable for a
10% tax on the excess benefit, not to
exceed $10,000 ($20,000 for tax years
beginning after August 17, 2006) for all
participating managers on each transaction.

Applicable Tax-Exempt
Organization
These rules only apply to certain applicable
section 501(c)(3) and 501(c)(4)
organizations. An applicable tax-exempt
organization is a section 501(c)(3) or a
section 501(c)(4) organization that is
tax-exempt under section 501(a), or was
such an organization at any time during a
5-year period ending on the day of the
excess benefit transaction.
An applicable tax-exempt organization
does not include:
• A private foundation as defined in section
509(a).
• A governmental entity that is exempt from
(or not subject to) taxation without regard to
section 501(a) or relieved from filing an
annual return under Regulations section
1.6033-2(g)(6).
• Certain foreign organizations.
An organization is not treated as a
section 501(c)(3) or 501(c)(4) organization
for any period covered by a final
determination that the organization was not
tax-exempt under section 501(a), so long as
the determination was not based on private
inurement or one or more excess benefit
transactions.

Disqualified Person
The vast majority of section 501(c)(3) or
501(c)(4) organization employees and
contractors will not be affected by these
rules. Only the few influential persons within
these organizations are covered by these
rules when they receive benefits, such as
compensation, fringe benefits, or contract
payments. The IRS calls this class of
covered individuals disqualified persons.
A disqualified person, regarding any
transaction, is 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

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organization. This would include, for
example, voting members of the governing
body, and persons holding the power of:
• Presidents, chief executive officers, or
chief operating officers.
• Treasurers and chief financial officers.
A disqualified person also includes
certain family members of a disqualified
person, and 35% controlled entities of a
disqualified person.
For transactions occurring after August
17, 2006, the following persons will be
considered disqualified persons along with
certain family members and 35% controlled
entities associated with them:
• Donors of donor advised funds,
• Investment advisors of sponsoring
organizations, and
• The disqualified persons of a section
509(a)(3) supporting organization for the
organizations that organization supports.
For transactions occurring after July 25,
2006, substantial contributors to supporting
organizations also will be considered
disqualified persons along with their family
members and 35% controlled entities.
See the Instructions for Form 4720,
Schedule I for more information regarding
these disqualified persons.
Who is not a disqualified person? The
rules also clarify which persons are not
considered to be in a position to exercise
substantial influence over the affairs of an
organization. They include:
• An employee who receives benefits that
total less than the highly compensated
amount ($100,000 in 2006) and who does
not hold the executive or voting powers just
mentioned; is not a family member of a
disqualified person; and is not a substantial
contributor;
• Tax-exempt organizations described in
section 501(c)(3); and
• Section 501(c)(4) organizations with
respect to transactions engaged in with
other section 501(c)(4) organizations.
Who else may be considered a
disqualified person? Other persons not
described above can also be considered
disqualified persons, depending on all the
relevant facts and circumstances.
Facts and circumstances tending to
show substantial influence:
• The person founded the organization.
• The person is a substantial contributor to
the organization under the section
507(d)(2)(A) definition, only taking into
account contributions to the organization for
the past 5 years.
• The person’s compensation is primarily
based on revenues derived from activities of
the organization that the person controls.
• The person has or shares authority to
control or determine a substantial portion of
the organization’s capital expenditures,
operating budget, or compensation for
employees.
• The person manages a discrete segment
or activity of the organization that represents
a substantial portion of the activities, assets,
income, or expenses of the organization, as
compared to the organization as a whole.
• The person owns a controlling interest
(measured by either vote or value) in a
corporation, partnership, or trust that is a
disqualified person.

• The person is a nonstock organization
controlled directly or indirectly by one or
more disqualified persons.
Facts and circumstances tending to
show no substantial influence:
• The person is an independent contractor
whose sole relationship to the organization
is providing professional advice (without
having decision-making authority) with
respect to transactions from which the
independent contractor will not economically
benefit.
• The person has taken a vow of poverty.
• Any preferential treatment the person
receives based on the size of the person’s
donation is also offered to others making
comparable widely solicited donations.
• The direct supervisor of the person is not
a disqualified person.
• The person does not participate in any
management decisions affecting the
organization as a whole or a discrete
segment of the organization that represents
a substantial portion of the activities, assets,
income, or expenses of the organization, as
compared to the organization as a whole.
What about persons who staff affiliated
organizations? In the case of multiple
affiliated organizations, the determination of
whether a person has substantial influence
is made separately for each applicable
tax-exempt organization. A person may be a
disqualified person with respect to
transactions with more than one
organization.
Excess Benefit Transaction
An excess benefit transaction is a
transaction in which an economic benefit is
provided by an applicable tax-exempt
organization, directly or indirectly, to or for
the use of any disqualified person, and the
value of the economic benefit provided by
the organization exceeds the value of the
consideration (including the performance of
services) received for providing such
benefit. An excess benefit transaction also
can occur when a disqualified person
embezzles from the exempt organization.
To determine whether an excess benefit
transaction has occurred, all consideration
and benefits exchanged between a
disqualified person and the applicable
tax-exempt organization, and all entities it
controls, are taken into account.
For purposes of determining the value of
economic benefits, the value of property,
including the right to use property, is the fair
market value. Fair market value is the price
at which property, or the right to use
property, would change hands between a
willing buyer and a willing seller, neither
being under any compulsion to buy, sell or
transfer property or the right to use property,
and both having reasonable knowledge of
relevant facts.
Donor advised funds.

!

CAUTION

The following discussion applies to
transactions occurring after August
17, 2006.

For a donor advised fund, an excess
benefit transaction 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, or

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• 35% controlled entity of a donor, or donor
advisor
• 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 payment. For
additional information see the Instructions
for Form 4720.
Supporting organizations.

!

CAUTION

The following discussion applies to
transactions occurring after July 25,
2006.

For any supporting organization, defined
in section 509(a)(3), an excess benefit
transaction includes grants, loans,
compensation, or similar payment provided
by the supporting organization to a:
• Substantial contributor,
• Family member of a substantial
contributor, or
• 35% controlled entity of a substantial
contributor, or
• 35% controlled entity of a family member
of a substantial contributor.
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).)
The excess benefit for substantial
contributors and parties related to those
contributors includes the amount of the
grant, loan, compensation, or similar
payment. For additional information see the
Instructions for Form 4720.
When does an excess benefit transaction
usually occur? An excess benefit
transaction occurs on the date the
disqualified person receives the economic
benefit from the organization for federal
income tax purposes. However, when a
single contractual arrangement provides for
a series of compensation payments or other
payments to a disqualified person during the
disqualified person’s tax year, any excess
benefit transaction with respect to these
payments occurs on the last day of the
taxpayer’s tax year.
In the case of the transfer of property
subject to a substantial risk of forfeiture, or
in the case of rights to future compensation
or property, the transaction occurs on the
date the property, or the rights to future
compensation or property, is not subject to a
substantial risk of forfeiture. Where the
disqualified person elects to include an
amount in gross income in the tax year of
transfer under section 83(b), the excess
benefit transaction occurs on the date the
disqualified person receives the economic
benefit for federal income tax purposes.
Section 4958 applies only to
post-September 1995 transactions.
Section 4958 applies to excess benefit
transactions occurring on or after
September 14, 1995. Section 4958 does not
apply to any transaction occurring pursuant
to a written contract that was binding on
September 13, 1995, and at all times
thereafter before the transaction occurs.
What is reasonable compensation?
Reasonable compensation is the valuation
standard that is used to determine if there is
an excess benefit in the exchange of a

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disqualified person’s services for
compensation.
Reasonable compensation is the value
that would ordinarily be paid for like services
by like enterprises under like circumstances.
This is the section 162 standard that will
apply in determining the reasonableness of
compensation. The fact that a bonus or
revenue-sharing arrangement is subject to a
cap is a relevant factor in determining the
reasonableness of compensation.
For determining the reasonableness of
compensation, all items of compensation
provided by an applicable tax-exempt
organization in exchange for the
performance of services are taken into
account in determining the value of
compensation (except for certain economic
benefits that are disregarded, as discussed
in What benefits are disregarded? later).
Items of compensation include:
• All forms of cash and noncash
compensation, including salary, fees,
bonuses, severance payments, and
deferred and noncash compensation.
• The payment of liability insurance
premiums for, or the payment or
reimbursement by the organization of taxes
or certain expenses under section 4958,
unless excludable from income as a de
minimis fringe benefit under section
132(a)(4). (A similar rule applies in the
private foundation area.) Inclusion in
compensation for purposes of determining
reasonableness under section 4958 does
not control inclusion in income for income
tax purposes.
• All other compensatory benefits, whether
or not included in gross income for income
tax purposes.
• Taxable and nontaxable fringe benefits,
except fringe benefits described in section
132.
• Foregone interest on loans.
Written intent required to treat
benefits as compensation. An economic
benefit is not treated as consideration for the
performance of services unless the
organization providing the benefit clearly
indicates its intent to treat the benefit as
compensation when the benefit is paid.
An applicable tax-exempt organization
(or entity that it controls) is treated as clearly
indicating its intent to provide an economic
benefit as compensation for services only if
the organization provides written
substantiation that is contemporaneous with
the transfer of the economic benefits under
consideration. Ways to provide
contemporaneous written substantiation of
its intent to provide an economic benefit as
compensation include:
• The organization produces a signed
written employment contract;
• The organization reports the benefit as
compensation on an original Form W-2,
Form 1099 or Form 990, or on an amended
form filed prior to the start of an IRS
examination; or
• The disqualified person reports the benefit
as income on the person’s original Form
1040 or on an amended form filed prior to
the start of an IRS examination.
Exception. To the extent the economic
benefit is excluded from the disqualified
person’s gross income for income tax
purposes, the applicable tax-exempt
organization is not required to indicate its

intent to provide an economic benefit as
compensation for services. (For example,
employer provided health benefits, and
contributions to qualified plans under section
401(a).)
What benefits are disregarded? The
following economic benefits are disregarded
for purposes of section 4958.
• Nontaxable fringe benefits. An economic
benefit that is excluded from income under
section 132.
• Benefits to volunteer. An economic
benefit provided to a volunteer for the
organization if the benefit is provided to the
general public in exchange for a
membership fee or contribution of $75 or
less per year.
• Benefits to members or donors. An
economic benefit provided to a member of
an organization due to the payment of a
membership fee, or to a donor as a result of
a deductible contribution, if a significant
number of nondisqualified persons make
similar payments or contributions and are
offered a similar economic benefit.
• Benefits to a charitable beneficiary. An
economic benefit provided to a person
solely as a member of a charitable class that
the applicable tax-exempt organization
intends to benefit as part of the
accomplishment of its exempt purpose.
• Benefits to a governmental unit. A transfer
of an economic benefit to or for the use of a
governmental unit, as defined in section
170(c)(1), if exclusively for public purposes.
Is there an exception for initial
contracts? Section 4958 does not apply to
any fixed payment made to a person
pursuant to an initial contract. This is a very
important exception, since it would
potentially apply, for example, to all initial
contracts with new, previously unrelated
officers and contractors.
An initial contract is 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.
A fixed payment is an amount of cash or
other property specified in the contract, or
determined by a fixed formula that is
specified in the contract, which is to be paid
or transferred in exchange for the provision
of specified services or property.
A fixed formula may, in general,
incorporate an amount that depends upon
future specified events or contingencies, as
long as no one has discretion when
calculating the amount of a payment or
deciding whether to make a payment (such
as a bonus).
Treatment as new contract. A binding
written contract providing that it may be
terminated or cancelled by the applicable
tax-exempt organization without the other
party’s consent (except as a result of
substantial non-performance) and without
substantial penalty, is treated as a new
contract, as of the earliest date that any
termination or cancellation would be
effective. Also, a contract in which there is a
material change, which includes an
extension or renewal of the contract (except
for an extension or renewal resulting from
the exercise of an option by the disqualified
person), or a more than incidental change to
the amount payable under the contract, is
treated as a new contract as of the effective

General Instructions for Form 990 and Form 990-EZ

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date of the material change. Treatment as a
new contract may cause the contract to fall
outside the initial contract exception, and it
thus would be tested under the fair market
value standards of section 4958.

Rebuttable Presumption of
Reasonableness
Payments under a compensation
arrangement are presumed to be
reasonable and the transfer of property (or
right to use property) is presumed to be at
fair market value, if the following three
conditions are met.
1. The transaction is approved by an
authorized body of the organization (or an
entity it controls) which is composed of
individuals who do not have a conflict of
interest concerning the transaction.
2. Prior to making its determination, the
authorized body obtained and relied upon
appropriate data as to comparability. There
is a special safe harbor for small
organizations. If the organization has gross
receipts of less than $1 million, appropriate
comparability data includes data on
compensation paid by three comparable
organizations in the same or similar
communities for similar services.
3. The authorized body adequately
documents the basis for its determination
concurrently with making that determination.
The documentation should include:
a. The terms of the approved
transaction and the date approved;
b. The members of the authorized body
who were present during debate on the
transaction that was approved and those
who voted on it;
c. The comparability data obtained and
relied upon by the authorized body and how
the data was obtained;
d. Any actions by a member of the
authorized body having a conflict of interest;
and
e. Documentation of the basis for the
determination before the later of the next
meeting of the authorized body or 60 days
after the final actions of the authorized body
are taken, and approval of records as
reasonable, accurate and complete within a
reasonable time thereafter.
Special rebuttable presumption rule for
nonfixed payments. As a general rule, in
the case of a nonfixed payment, no
rebuttable presumption arises until the exact
amount of the payment is determined, or a
fixed formula for calculating the payment is
specified, and the three requirements
creating the presumption have been
satisfied. However, if the authorized body
approves an employment contract with a
disqualified person that includes a nonfixed
payment (for example, discretionary bonus)
with a specified cap on the amount, the
authorized body may establish a rebuttable
presumption as to the nonfixed payment
when the employment contract is entered
into by, in effect, assuming that the
maximum amount payable under the
contract will be paid, and satisfying the
requirements giving rise to the rebuttable
presumption for that maximum amount.
An IRS challenge to the presumption of
reasonableness. The Internal Revenue
Service may refute the presumption of
reasonableness only if it develops sufficient

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contrary evidence to rebut the probative
value of the comparability data relied upon
by the authorized body. This provision gives
taxpayers added protection if they faithfully
find and use contemporaneous persuasive
comparability data when they provide the
benefits.
Organizations that do not establish a
presumption of reasonableness. An
organization may still comply with section
4958 even if it did not establish a
presumption of reasonableness. In some
cases, an organization may find it
impossible or impracticable to fully
implement each step of the rebuttable
presumption process described above. In
such cases, the organization should try to
implement as many steps as possible, in
whole or in part, in order to substantiate the
reasonableness of benefits as timely and as
well as possible. If an organization does not
satisfy the requirements of the rebuttable
presumption of reasonableness, a facts and
circumstances approach will be followed,
using established rules for determining
reasonableness of compensation and
benefit deductions in a manner similar to the
established procedures for section 162
business expenses.

Section 4958 Taxes
Tax on disqualified persons. An excise
tax equal to 25% of the excess benefit is
imposed on each excess benefit transaction
between an applicable tax-exempt
organization and a disqualified person. The
disqualified person who benefited from the
transaction is liable for the tax. If the 25%
tax is imposed and the excess benefit
transaction is not corrected within the
taxable period, an additional excise tax
equal to 200% of the excess benefit is
imposed.
If a disqualified person makes a payment
of less than the full correction amount, the
200% tax is imposed only on the unpaid
portion of the correction amount. If more
than one disqualified person received an
excess benefit from an excess benefit
transaction, all such disqualified persons are
jointly and severally liable for the taxes.
To avoid the imposition of the 200% tax,
a disqualified person must correct the
excess benefit transaction during the
taxable period. The taxable period begins on
the date the transaction occurs and ends on
the earlier of the date the statutory notice of
deficiency is issued or the section 4958
taxes are assessed. This 200% tax may be
abated if the excess benefit transaction
subsequently is corrected during a 90-day
correction period.
Tax on organization managers. An excise
tax equal to 10% of the excess benefit may
be imposed on the participation of an
organization manager in an excess benefit
transaction between an applicable
tax-exempt organization and a disqualified
person. This tax, which may not exceed
$10,000 ($20,000 for tax years beginning
after August 17, 2006) with respect to any
single transaction, is only imposed if the
25% tax is imposed on the disqualified
person, the organization manager knowingly
participated in the transaction, and the
manager’s participation was willful and not
due to reasonable cause. There is also joint
and several liability for this tax. An

organization manager may be liable for both
the tax on disqualified persons and on
organization managers in appropriate
circumstances.
An organization manager is 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. An
organization manager is not considered to
have participated in an excess benefit
transaction where the manager has
opposed the transaction in a manner
consistent with the fulfillment of the
manager’s responsibilities to the
organization. For example, a director who
votes against giving an excess benefit would
ordinarily not be subject to this tax.
A person participates in a transaction
knowingly if the person has actual
knowledge of sufficient facts so that, based
solely upon such facts, the transaction
would be an excess benefit transaction.
Knowing does not mean having reason to
know. The organization manager ordinarily
will not be considered knowing if, after full
disclosure of the factual situation to an
appropriate professional, the organization
manager relied on the professional’s
reasoned written opinion on matters within
the professional’s expertise or if the
manager relied on the fact that the
requirements for the rebuttable presumption
of reasonableness have been satisfied.
Participation by an organization manager is
willful if it is voluntary, conscious, and
intentional. An organization manager’s
participation is due to reasonable cause if
the manager has exercised responsibility on
behalf of the organization with ordinary
business care and prudence.

Correcting an Excess Benefit
Transaction
A disqualified person corrects an excess
benefit transaction by undoing the excess
benefit to the extent possible, and by taking
any additional measures necessary to place
the organization in a financial position not
worse than that in which it would be if the
disqualified person were dealing under the
highest fiduciary standards. The
organization is not required to rescind the
underlying agreement; however, the parties
may need to modify an ongoing contract
with respect to future payments.
A disqualified person corrects an excess
benefit by making a payment in cash or
cash equivalents equal to the correction
amount to the applicable tax-exempt
organization. The correction amount equals
the excess benefit plus the interest on the
excess benefit; the interest rate may be no
lower than the applicable Federal rate.
There is an anti-abuse rule to prevent the
disqualified person from effectively
transferring property other than cash or cash
equivalents.
Exception. For a correction of an
excess benefit transaction described in
Donor advised funds (discussed earlier), no
amount repaid in a manner prescribed by
the Secretary may be held in a donor
advised fund.
Property. With the agreement of the
applicable tax-exempt organization, a
disqualified person may make a payment by

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returning the specific property previously
transferred in the excess benefit transaction.
The return of the property is considered a
payment of cash (or cash equivalent) equal
to the lesser of:
• The fair market value of the property on
the date the property is returned to the
organization, or
• The fair market value of the property on
the date the excess benefit transaction
occurred.
Insufficient payment. If the payment
resulting from the return of the property is
less than the correction amount, the
disqualified person must make an additional
cash payment to the organization equal to
the difference.
Excess payment. If the payment
resulting from the return of the property
exceeds the correction amount described
above, the organization may make a cash
payment to the disqualified person equal to
the difference.

Churches and Section 4958
The regulations make it clear that the IRS
will apply the procedures of section 7611
when initiating and conducting any inquiry or
examination into whether an excess benefit
transaction has occurred between a church
and a disqualified person.

Revenue Sharing Transactions
Proposed intermediate sanction regulations
were issued in 1998. The proposed
regulations had special provisions covering
“any transaction in which the amount of any
economic benefit provided to or for the use
of a disqualified person is determined in
whole or in part by the revenues of one or
more activities of the organization. . .” —
so-called revenue-sharing transactions.
Rather than setting forth additional rules on
revenue-sharing transactions, the final
regulations reserve this section.
Consequently, until the Service issues new
regulations for this reserved section on
revenue-sharing transactions, these
transactions will be evaluated under the
general rules (for example, the fair market
value standards) that apply to all contractual
arrangements between applicable
tax-exempt organizations and their
disqualified persons.

Revocation of Exemption and
Section 4958
Section 4958 does not affect the substantive
standards for tax exemption under section
501(c)(3) or section 501(c)(4), including the
requirements that the organization be
organized and operated exclusively for
exempt purposes, and that no part of its net
earnings inure to the benefit of any private
shareholder or individual. The legislative
history indicates that in most instances, the
imposition of this intermediate sanction will
be in lieu of revocation. The IRS has
indicated that the following four factors will
be considered in determining whether to
revoke an applicable tax-exempt
organization’s exemption status where an
excess benefit transaction has occurred:
• Whether the organization has been
involved in repeated excess benefit
transactions;
• The size and scope of the excess benefit
transaction;

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• Whether, after concluding that it has been

party to an excess benefit transaction, the
organization has implemented safeguards to
prevent future recurrences; and
• Whether there was compliance with other
applicable laws.

Q. Erroneous Backup
Withholding
Recipients of dividend or interest payments
generally must certify their correct taxpayer
identification number to the bank or other
payer on Form W-9. If the payer does not
get this information, it must withhold part of
the payments as backup withholding. If the
organization was subject to erroneous
backup withholding because the payer did
not realize it was an exempt organization
and not subject to this withholding, it can
claim credit on Form 990-T for the amount
withheld. See the Instructions for Form
990-T. Claims for refund must be filed within
3 years after the date the original return was
due; 3 years after the date the organization
filed it; or 2 years after the date the tax was
paid, whichever is later.

R. Group Return
If a parent organization wants to file a group
return for two or more of its subsidiaries, it
must use Form 990. The parent organization
cannot use a Form 990-EZ for the group
return.
A central, parent, or like organization can
file a group return on Form 990 for two or
more local organizations that are:
1. Affiliated with the central organization
at the time its annual accounting period
ends,
2. Subject to the central organization’s
general supervision or control,
3. Exempt from tax under a group
exemption letter that is still in effect, and
4. Have the same accounting period as
the central organization.
If the parent organization is required to
file a return for itself, it must file a separate
return and may not be included in the group
return. See General Instruction B for a list of
organizations not required to file.
Every year, each local organization must
authorize the central organization in writing
to include it in the group return and must
declare, under penalty of perjury, that the
authorization and the information it submits
to be included in the group return are true
and complete.
If the central organization prepares a
group return for its affiliated organizations,
check the “Yes” box in item H(a), in the
heading of Form 990, and indicate the
number of organizations for which the group
return is filed in item H(b).
For item H(c), check “Yes,” to indicate
that the group return includes all affiliated
organizations covered by the group ruling. If
the organization answers “No” to H(c),
attach a list showing the name, address,
and EIN of each affiliated organization
included in the group return. If either box in
H(a) or H(d) is checked “Yes,” enter the
four-digit group exemption number (GEN).
Do not confuse the four-digit GEN number
to be reported for item I with the nine-digit

EIN number reported in item D of the form’s
heading.
The central organization should send the
annual information required to maintain a
group exemption letter to the:
Internal Revenue Service Center
Ogden, UT 84201-0027
An affiliated organization covered by a
group ruling may file a separate return
instead of being included in the group
return. In such case, check the “Yes” box in
item H(d), in the heading of Form 990, and
enter the GEN number in item I.
Parts IV-A and IV-B of Form 990 do not
have to be completed on group returns.

S. Organizations in Foreign
Countries and U.S.
Possessions
Refer to General Instruction B for the filing
exemption for foreign organizations with
$25,000 or less in gross receipts from U.S.
sources.
Report amounts in U.S. dollars and state
what conversion rate the organization uses.
Combine amounts from within and outside
the United States and report the total for
each item. All information must be written in
English.

T. Public Interest Law Firms
A public interest law firm exempt under
section 501(c)(3) or 501(c)(4) must attach a
statement that lists the cases in litigation, or
that have been litigated during the year. For
each case, describe the matter in dispute
and explain how the litigation will benefit the
public generally. Also attach a report of all
fees sought and recovered in each case.
See Rev. Proc. 92-59, 1992-2 C.B. 411.

U. Political Organizations
A political organization subject to section
527 is a party, committee, association, fund,
or other organization (whether or not
incorporated) organized and operated
primarily for the purpose of directly or
indirectly accepting contributions or making
expenditures, or both, for an exempt
function.
The exempt function of a political
organization is influencing or attempting to
influence the selection, nomination, election
or appointment of an individual to a federal,
state, or local public office or office in a
political organization. A political organization
must be organized for the primary purpose
of carrying on exempt function activities.
A political organization does not need to
be formally chartered or established as a
corporation, trust, or association. A separate
bank account in which political campaign
funds are deposited and disbursed only for
political campaign expenses can qualify as a
political organization.

V. Information Regarding
Transfers Associated With
Personal Benefit Contracts
Filers of Form 990 that engaged in activities
involving personal benefit contracts must
declare in Part X, Information Regarding

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Transfers Associated With Personal Benefit
Contracts, whether or not they:
1. Received any funds, directly or
indirectly, to pay premiums on a personal
benefit contract.
2. Paid any premiums, directly or
indirectly, on a personal benefit contract.

!

CAUTION

Filers of Form 990-EZ must make
this declaration in a statement
attached to their form.

If premiums were paid on a personal
benefit contract, the organization must
report these payments on Form 8870 and
pay an excise tax, equal to premiums paid,
with Form 4720.
Section 170(f)(10)(F)(iii) requires a
charitable organization to report annually its
premium payments on a personal benefit
contract with respect to a transferor and to
identify the beneficiaries of those contracts.
A transferor of funds to a charitable
organization receives no charitable
contribution deduction if the organization,
directly or indirectly pays, or has previously
paid, any premium on a personal benefit
contract with respect to the transferor, or
there is an understanding or expectation
that any person will directly or indirectly pay
any premium on a personal benefit contract
with respect to the transferor (section
170(f)(10)(A)).
A personal benefit contract, generally, is
any life insurance, annuity, or endowment
contract that benefits, directly or indirectly,
the transferor, a member of the transferor’s
family, or any other person designated by
the transferor (other than an organization
described in section 170(c)). A charitable
organization is an organization described in
section 170(c).
Section 170(f)(10)(F)(i) imposes on a
charitable organization an excise tax equal
to the premiums paid by the organization on
any personal benefit contract, if the payment
of premiums is in connection with a transfer
for which a deduction is not allowed under
section 170(f)(10)(A). For purposes of this
excise tax, section 170(f)(10)(F)(ii) provides
that premium payments made by any other
person, pursuant to an understanding or
expectation described in section
170(f)(10)(A), are treated as made by the
charitable organization.
For more information on the reporting
requirements of section 170(f)(10), see
Notice 2000-24, 2000-17 I.R.B. 952 (2000-1
C.B. 952) and Announcement 2000-82,
2000-42 I.R.B. 385 (2000-2 C.B. 385).

W. Prohibited Tax Shelter
Transactions and
Related Disclosure
Requirements
New section 4965 imposes an excise tax on:
• Certain tax-exempt entities that are party
to prohibited tax shelter transactions, and
• Any entity manager who approves or
otherwise causes the entity to be a party to
a prohibited tax shelter transaction and
knows or has reason to know that the
transaction is a prohibited tax shelter
transaction.
Additionally, section 6033 provides new

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disclosure requirements on a tax-exempt
entity that is a party to a prohibited tax
shelter transaction.
Tax-exempt entities. Tax-exempt entities
that are subject to section 4965 include:
1. Entities described in section 501(c),
including but not limited to the following
common types of entities:
a. Instrumentalities of the United
States described in section 501(c)(1);
b. Churches, hospitals, museums,
schools, scientific research organizations
and other charities described in section
501(c)(3);
c. Civic leagues, social welfare
organizations, and local associations of
employees described in section
501(c)(4);
d. Labor, agricultural or horticultural
organizations described in section
501(c)(5);
e. Business leagues, chambers of
commerce, trade associations and other
organizations described in section
501(c)(6);
f. Voluntary employees’ beneficiary
associations (VEBAs) described in
section 501(c)(9);
g. Credit unions described in section
501(c)(14);
h. Insurance companies described in
section 501(c)(15); and
i. Veterans’ organizations described in
section 501(c)(19).
2. Religious or apostolic associations or
corporations described in section 501(d).
3. Entities described in section 170(c),
including states, possessions of the United
States, the District of Columbia, political
subdivisions of states and political
subdivisions of possessions of the United
States (but not including the United States).
4. Indian tribal governments within the
meaning of section 7701(a)(40).
Entity manager. An entity manager is any
person with authority or responsibility similar
to that exercised by an officer, director or
trustee, and, for any act, the person that has
authority or responsibility with respect to the
prohibited transaction.
Prohibited tax shelter transaction. A
prohibited tax shelter transaction is any
listed transaction, within the meaning of
section 6707A(c)(2), and any prohibited
reportable transactions. A prohibited
reportable transaction is a confidential
transaction within the meaning of
Regulations section 1.6011-4(b)(3), and a
transaction with contractual protection within
the meaning of Regulations section
1.6011-4(b)(4).

Entity-Level Excise Tax
For Form 990 and 990-EZ filers, section
4965(a)(1) imposes an entity level excise
tax on any tax-exempt entity that becomes a
party to a prohibited tax shelter transaction
or is a party to a subsequently listed
transaction (defined later). The excise tax
imposed on a tax-exempt entity applies to
tax years in which the entity becomes a
party to the prohibited tax shelter transaction
and any subsequent tax years. The amount
of the excise tax depends on whether the
tax-exempt entity knew or had reason to
know that the transaction was a prohibited

tax shelter transaction at the time it became
a party to the transaction.
To figure and report the excise tax
imposed on a tax-exempt entity for being a
party to a prohibited tax shelter transaction,
file Form 4720.
For more information about this excise
tax including information about how it is
figured, see the Instructions for Form 4720.
Subsequently listed transaction. Any
transaction to which the tax-exempt entity is
a party and is later determined to be a listed
transaction after the entity has become a
party to it, is a subsequently listed
transaction.

Required Disclosure
Every tax-exempt entity must file a
disclosure of:
• Such entity being a party to any prohibited
tax shelter transaction, and
• The identity of any other known party to
the prohibited tax shelter transaction.
Use Form 8886-T, to report the
disclosure. Entities that fail to file the
required disclosure are subject to a
nondisclosure penalty of $100 for each day
the failure continues with a maximum
penalty for any one disclosure of $50,000.
Also, if the IRS makes a written demand
on any entity subject to this penalty, giving
the entity a reasonable date to make the
disclosure and the entity fails to make
disclosure by that date, the entity is subject
to a penalty of $100 for each day after the
date specified by the IRS until disclosure is
made (with a maximum penalty for any one
disclosure of $10,000).

Excise Tax on Entity Managers
Section 4965(a)(2) imposes an excise tax
on any tax-exempt entity manager who
approves or otherwise causes the entity to
be a party to a prohibited tax shelter
transaction and knows (or has reason to
know) that the transaction is a prohibited tax
shelter transaction. The excise tax, in the
amount of $20,000, is assessed for each
approval or other act causing the
organization to be a party to the prohibited
tax shelter transaction. To report this tax, file
Form 4720.

X. Requirements for a Properly
Completed Form 990 or Form
990-EZ
Public inspection. In general, all
information the organization reports on or
with its Form 990, or Form 990-EZ, including
attachments, will be available for public
inspection. Note, however, the public
inspection rules for the Schedule B (Form
990, 990-EZ, or 990-PF), a required
attachment for organizations that file Form
990 or Form 990-EZ. Make sure the forms
and attachments are clear enough to
photocopy legibly.
Signature. To make the return complete,
an officer of the organization authorized to
sign it must sign in the space provided. For
a corporation, or association, this officer
may be the president, vice president,
treasurer, assistant treasurer, chief
accounting officer, or other corporate, or
association officer, such as a tax officer. A
receiver, trustee, or assignee must sign any

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return he or she files for a corporation or
association. For a trust, the authorized
trustee(s) must sign.
Generally, anyone who is paid to

TIP prepare the return must sign it in the
Paid Preparer’s Use Only area.
The paid preparer must:

• Sign the return in the space provided for
the preparer’s signature.

• Enter the preparer’s social security

number (SSN), preparer tax identification
number (PTIN), or employer identification
number (EIN), only if the Form 990, or Form
990-EZ, is for a section 4947(a)(1)
nonexempt charitable trust that is not filing
Form 1041.
• Complete the required preparer
information.
• Give a copy of the return to the
organization.
Leave the paid preparer’s space blank if
the return was prepared by a regular
employee of the filing organization.
Recordkeeping. The organization’s
records should be kept for as long as they
may be needed for the administration of any
provision of the Internal Revenue Code.
Usually, records that support an item of
income, deduction, or credit must be kept for
3 years from the date the return is due or
filed, whichever is later. Keep records that
verify the organization’s basis in property for
as long as they are needed to figure the
basis of the original or replacement
property.
The organization should also keep
copies of any returns it has filed. They help
in preparing future returns and in making
computations when filing an amended
return.
Rounding off to whole dollars. The
organization may round off cents to whole
dollars on the return and schedules. If the
organization does round to whole dollars, it
must round all amounts. To round, drop
amounts under 50 cents and increase
amounts from 50 to 99 cents to the next
dollar. For example, $1.39 becomes $1 and
$2.50 becomes $3.
If the organization has to add two or
more amounts to figure the amount to enter
on a line, include cents when adding the
amounts and round off only the total.
Completing all lines. Unless the
organization is permitted to use certain DOL
forms or Form 5500 as partial substitutes for
Form 990, or Form 990-EZ (see General
Instruction F), do not leave any applicable
lines blank or attach any other forms or
schedules instead of entering the required
information on the appropriate line on Form
990 or Form 990-EZ.
Assembling Form 990 or Form 990-EZ.
Before filing the Form 990, or Form 990-EZ,
assemble the package of forms and
attachments in the following order:
• Form 990 or Form 990-EZ.
• Schedule A (Form 990 or 990-EZ). The
requirement to attach Schedule A (Form 990
or 990-EZ) applies to all section 501(c)(3)
organizations and all section 4947(a)(1)
nonexempt charitable trusts that file Form
990 or Form 990-EZ.
• Schedule B (Form 990, 990-EZ, or
990-PF).

General Instructions for Form 990 and Form 990-EZ

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• Attachments to Form 990 or Form

990-EZ.
• Attachments to Schedule A (Form 990 or
990-EZ).
• Attachments to Schedule B (Form 990,
990-EZ, or 990-PF).
Attachments. Use the schedules on the
official form unless more space is needed. If
the organization uses attachments, the
attachments must:

1. Show the form number and tax year;
2. Show the organization’s name and
EIN;
3. Identify clearly the Part or line(s) to
which the attachments relate;
4. Include the information required by
the form and use the same format as the
form;

General Instructions for Form 990 and Form 990-EZ

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5. Follow the same Part and line
sequence as the form; and
6. Be on the same size paper as the
form.

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嘼

Checklist For A Properly Completed Return.

Complete Schedule A (Form 990 or 990-EZ) if the organization is a section 501(c)(3), 501(e), (f), (k), (n)
organization or a section 4947(a)(1) nonexempt charitable trust.
Complete Schedule A (Form 990 or 990-EZ), Part IV-A, Support Schedule, if the organization is required to
check a box on line 10, 11a, 11b, or 12 of Part IV of Schedule A.
File Form 990 instead of Form 990-EZ if the organization’s gross receipts are $100,000 or more or total assets
at the end of the year are $250,000 or more, or the organization is a sponsoring organization, or controlling
organization under section 512(b)(13).
Indicate the correct tax year in the heading of the form.
Have an officer of the organization sign the return.
Complete all Balance Sheet columns (Part IV (and IV-A and IV-B) of Form 990; Part II of Form 990-EZ).
Indicate “N/A” if a line, column, or Part does not apply. Indicate too, on the applicable line, if a schedule is
attached. Do not substitute another balance sheet instead of completing the Part II Balance Sheet of Form
990-EZ.
Attach all required pages and schedules to the return. Include a list of subordinates if filing a group return.
Double-check the accuracy of the organization’s EIN, tax period, and group exemption number (GEN), if
applicable.
Indicate the correct 501(c) subsection under which the organization is tax-exempt. If there has been a change,
attach a copy of the latest determination letter. If the letter is unavailable, attach a description of the
organization’s primary exempt purpose.
Be aware that the Form 990, Form 990-EZ, the Schedule A (Form 990 or 990-EZ), and the attachments to be
filed with these forms, are publicly disclosable. Note, however, the specific public inspection rules in the
Instructions for Schedule B (Form 990, 990-EZ, or 990-PF).
Section 501(c)(3) organizations required to complete lines 26, 27, or 28 of Schedule A (Form 990 or 990-EZ)
must prepare lists for their own records to substantiate amounts on those lines. These lists are not to be filed
with the return.
Do not check the Final return box in the heading of the Form 990 or 990-EZ unless the organization has
ceased operations.

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General Instructions for Form 990 and Form 990-EZ

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Specific Instructions for
Form 990
See also the General Instructions that apply
to both Form 990 and Form 990-EZ.
Contents

Page

Completing the Heading of Form 990 . . . . .

21

Part I — Revenue, Expenses, and Changes in
Net Assets or Fund Balances . . . . . . . . . .

22

Part II — Statement of Functional Expenses

27

Part III — Statement of Program Service
Accomplishments . . . . . . . . . . . . . . . . . .

31

Part IV — Balance Sheets . . . . . . . . . . . . .

31

Parts IV-A and IV-B — Reconciliation
Statements . . . . . . . . . . . . . . . . . . . . . .

34

Part V-A — Current Officers, Directors,
Trustees, and Key Employees . . . . . . . . . .

34

Part V-B — Former Officers, Directors,
Trustees, and Key Employees That Received
Compensation or Other Benefits . . . . . . . .

36

Part VI — Other Information . . . . . . . . . . . .

37

Part VII — Analysis of Income-Producing
Activities . . . . . . . . . . . . . . . . . . . . . . . .

43

Part VIII — Relationship of Activities to the
Accomplishment of Exempt Purposes . . . . .

44

Part IX — Information Regarding Taxable
Subsidiaries and Disregarded Entities . . . . .

44

Part X — Information Regarding Transfers
Associated With Personal Benefit Contracts

44

Part XI — Information Regarding Transfers to
and From Controlled Entities . . . . . . . . . . .

44

Exclusion Codes . . . . . . . . . . . . . . . . . . .

45

Completing the Heading of
Form 990
The instructions that follow are keyed to
items in the heading for Form 990.

Item A. Accounting Period
File the 2006 return for calendar year 2006
and fiscal years that begin in 2006 and end
in 2007. For a fiscal year return, fill in the tax
year space at the top of page 1. See
General Instruction G for additional
information on accounting periods and
methods.

Item B. Checkboxes
Address change, name change, and
initial return. Check the appropriate box if
the organization changed its address since it
filed its previous return, or if this is the first
time the organization is filing either a Form
990 or a Form 990-EZ.
If the tax-exempt organization has
changed its name, attach the following
documents:
IF the
organization is .
A corporation

THEN attach . . .
Amendments to the articles of
incorporation with proof of
filing with the state of
incorporation.

Specific Instructions for Form 990

A trust

Amendments to the trust
agreement signed by the
trustee.

An association

Amendments to the articles of
association, constitution,
bylaws, or other organizing
document, with the signatures
of at least two officers/
members.

Final return and Amended return.
Organizations should file final returns when
they cease to be section 501(a)
organizations or section 527 organizations;
for example, when they cease operations
and dissolve. See the instructions for line 79
that discuss liquidations, dissolutions,
terminations, or substantial contractions.
If the return is an amended return, check
the box. There are amended return
requirements when filing with a state. See
General Instructions E and J.
Application pending. If the organization’s
application for exemption is pending, check
this box and complete the return.

Item C. Name and Address
If we mailed the organization a Form 990
Package with a pre-addressed mailing label,
please attach the label in the name and
address space on the return. Using the label
helps us avoid errors in processing the
return. If any information on the label is
wrong, draw a line through that part and
correct it.
If the organization operates under a
name different from its legal name, give the
legal name of the organization but identify
its alternate name, after the legal name, by
writing “aka” (also known as) and the
alternate name of the organization.
However, if the organization has changed its
name, follow the instructions for Name
change in Item B — Checkboxes.
If the organization receives its mail in
care of a third party (such as an accountant
or an attorney), enter on the street address
line “C/O” followed by the third party’s name
and street address or P.O. box.
Include the suite, room, or other unit
number after the street address. If the Post
Office does not deliver mail to the street
address and the organization has a P.O.
box, show the box number instead of the
street address.
For foreign addresses, enter information
in the following order: city, province or state,
and the name of the country. Follow the
foreign country’s practice in placing the
postal code in the address. Please do not
abbreviate the country name.
If a change in address occurs after the
return is filed, use Form 8822 to notify the
IRS of the new address.

Item D. Employer Identification
Number
The organization should have only one
federal employer identification number
(EIN). If it has more than one and has not
been advised which to use, notify the:
Internal Revenue Service Center
Ogden, UT 84201-0027
State what numbers the organization has,
the name and address to which each

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number was assigned, and the address of
its principal office. The IRS will advise the
organization which number to use.
• A section 501(c)(9) voluntary employees’
beneficiary association must use its own
EIN and not the EIN of its sponsor.
• A disregarded entity, as described in
Regulations sections 301.7701-1 through
301.7701-3, however, may use the EIN of
the organization in Part IX if the disregarded
entity does not have its own EIN. See
General Instruction A and the instructions
for Part IX.

Item E. Telephone Number
Enter a telephone number of the
organization that members of the public and
government regulators may use during
normal business hours to obtain information
about the organization’s finances and
activities. If the organization does not have a
telephone number, enter the telephone
number of an organization official who can
provide such information.

Item F. Accounting Method
An organization must indicate the method of
accounting used in preparing this return.
See General Instruction G.

Item G. Website
Show the organization’s website address if a
website is available. Otherwise, write “N/A”
(not applicable). Consider adding the
organization’s email address to its website.

Item H. Group Return, etc.
See General Instruction R. Attach the
required list, if applicable, or the
organization will be contacted later for the
missing information.

Item I. Group Exemption Number
The group exemption number (GEN) is a
number assigned by the IRS to the central/
parent organization of a group that has a
group ruling.
Enter the four-digit group exemption
number if “Yes” was checked in item H(a)
and H(d). Contact the central/parent
organization if the organization is unsure of
the GEN assigned.

Item J. Organization Type
If the organization is exempt under section
501(c), check the applicable box and insert,
within the parentheses, the number that
identifies the type of section 501(c)
organization the filer is. See the chart in
General Instruction C. The term section
501(c)(3) includes organizations exempt
under sections 501(e), (f), (k), and (n).
Check the applicable box if the organization
is a section 527 political organization. See
General Instruction U.
If the organization is a section 4947(a)(1)
nonexempt charitable trust, check the
applicable box. Note also the discussion
regarding Schedule A (Form 990 or 990-EZ)
and Form 1041 in General Instruction D and
the instructions to line 92 of Form 990.

Item K. Gross Receipts of $25,000
or Less
Check this box if the organization is not a
section 509(a)(3) supporting organization
and its gross receipts are normally not more
than $25,000, but the organization chooses
to file a return. If the organization chooses to

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file a return, be sure to file a complete
return. For a discussion on gross receipts
for this purpose, see General Instruction B.
Also, see General Instruction X for a
discussion on a complete return.
To figure if a section 501(c)(15)
organization qualifies for tax
CAUTION exemption for the year, see the
definition of gross receipts for section
501(c)(15) purposes under Section
501(c)(15) Organizations in General
Instruction A. Do not use the section
501(c)(15) definition of gross receipts to
figure if the organization’s gross receipts are
normally $25,000 or less.

!

Item L. Figuring Gross Receipts
The organization’s gross receipts are the
total amount it received from all sources
during its annual accounting period, without
subtracting any costs or expenses. See the
gross receipts discussion in General
Instruction B.
To figure if a section 501(c)(15)
organization qualifies for tax
CAUTION exemption for the year, see the
definition of gross receipts for section
501(c)(15) purposes under Section
501(c)(15) Organizations in General
Instruction A. Do not use the section
501(c)(15) definition of gross receipts to
figure the amount to enter here.

!

Item M. Schedule B (Form 990,
990-EZ, or 990-PF)
Whether or not the organization enters any
amount on line 1e of Form 990, the
organization must either check the box in
item M or attach Schedule B (Form 990,
990-EZ, or 990-PF). The organization return
will be incomplete if it does not either check
the box in item M or file Schedule B (Form
990, 990-EZ, or 990-PF). See the
Instructions for Schedule B (Form 990,
990-EZ, or 990-PF), for more information.
Contributor includes individuals,

If . . . . . . . A section 501(c)(7), (8), or (10)
organization did not receive any
contribution or bequest for use
exclusively for religious,
charitable, scientific, literary, or
educational purposes, or the
prevention of cruelty to children or
animals (and did not receive any
noncharitable contributions of
$5,000 or more as described
below under general rule),
Then . . . . The organization should check the
box in item M to certify that it is
not required to attach Schedule B
(Form 990, 990-EZ, or 990-PF).
Otherwise Complete and attach Schedule B
(Form 990, 990-EZ, or 990-PF).
All Other Form 990 or Form 990-EZ
Organizations (General rule)
If . . . . . . . The organization did not show as
part of line 1e of the Form 990, a
contribution of $5,000 or more
from any one contributor,*
Then . . . . The organization should check the
box in item M to certify that it is
not required to attach Schedule B
(Form 990, 990-EZ, or 990-PF).
Otherwise Complete and attach Schedule B
(Form 990, 990-EZ, or 990-PF).
* Total a contributor’s gifts of $1,000 or more to
determine if a contributor gave $5,000 or more. Do
not include smaller gifts.

Part I. Revenue, Expenses, and
Changes in Net Assets or Fund
Balances
All organizations filing Form 990 with the
IRS or any state must complete Part I.
Some states that accept Form 990 in place
of their own forms require additional
information.

Line 1. In General

TIP fiduciaries, partnerships,
corporations, associations, trusts,
and exempt organizations.

Guidelines for Meeting the
Requirements for Schedule B
(Form 990, 990-EZ, or 990-PF)
Section 501(c)(3) org., meeting the 1/3
support test of 170(b)(1)(A)
If . . . . . . . A section 501(c)(3) organization
that met the 1/3 support test of the
regulations under 509(a)(1)/
170(b)(1)(A) did not receive a
contribution of the greater of
$5,000 or 2% of the amount on
line 1e of Form 990, from any one
contributor,*
Then . . . . The organization should check the
box in item M to certify that it is
not required to attach Schedule B
(Form 990, 990-EZ, or 990-PF).
Otherwise Complete and attach Schedule B
(Form 990, 990-EZ, or 990-PF).
Section 501(c)(7), (8), or (10) Organization

Contributions, Gifts, Grants, and
Similar Amounts Received
• Report the amount contributed to donor

advised funds on line 1a.
• On lines 1b through 1d, report amounts
received as voluntary contributions (other
than contributions to donor advised funds;
that is, payments, or the part of any
payment, for which the payer (donor) does
not receive full retail value (fair market
value) from the recipient (donee)
organization.
• Report gross amounts of contributions
collected in the charity’s name by
fundraisers.
• Report all expenses of raising
contributions in Fundraising, column (D),
Part II, and on line 15 of Part I. The
organization must show on line 30
professional fundraising fees relating to the
gross amounts of contributions collected in
the charity’s name by fundraisers.
• Report the value of noncash contributions
at the time of the donation. For example,
report the gross value of a donated car at
the time the car was received as a donation.
• For grants, see Grants that are Equivalent
to contributions, on the following page.

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Reporting for line 1, in accordance with
SFAS 116, is acceptable for Form 990
purposes, but not required by IRS. However,
see General Instruction E.
An organization that receives a grant to
be paid in future years should, according to
SFAS 116, report the grant’s present value
on line 1. Accruals of present value
increments to the unpaid grant should also
be reported on line 1 in future years.

Contributions Can Arise From
Special Events When an Excess
Payment Is Received for Items
Offered
Fundraising activities relate to soliciting and
receiving contributions. However, special
fundraising activities such as dinners,
door-to-door sales of merchandise,
carnivals, and bingo games can produce
both contributions and revenue.
If a buyer at such a special event, pays
more for goods or services than their retail
value, report, as a contribution, both on line
1b and on line 9a (within the parentheses),
any amount paid in excess of the retail
value. This situation usually occurs when
organizations seek public support through
solicitation programs that are in part special
events or activities and are in part
solicitations for contributions. The primary
purpose of such solicitations is to receive
contributions and not to sell the
merchandise at its retail value even though
this might produce a profit.
Example. An organization announces
that anyone who contributes at least $40 to
the organization can choose to receive a
book worth $16 retail value. A person who
gives $40, and who chooses the book, is
really purchasing the book for $16 and also
making a contribution of $24. The
contribution of $24, which is the difference
between the buyer’s payment and the $16
retail value of the book, would be reported
on line 1b and again on line 9a (within the
parentheses). The revenue received ($16
retail value of the book) would be reported in
the right-hand column on line 9a.
If a contributor gives more than $40, that
person would be making a larger
contribution, the difference between the
book’s retail value of $16 and the amount
actually given. Rev. Rul. 67-246, 1967-2
C.B. 104, explains this principle in detail.
See also the Lines 9a through 9c
instructions and Pub. 526.
Report the expenses that relate directly
to the sale of the book on line 9b. Report the
expenses of raising contributions (shown
within the parentheses on line 9a and again
on line 1b) in Fundraising, column (D), Part
II, and on line 15 of Part I.
At the time of any solicitation or
payment, organizations that are
CAUTION eligible to receive tax-deductible
contributions should advise patrons of the
amount deductible for federal tax purposes.
See General Instruction L.

!

Contributions Can Arise From
Special Events When Items of Only
Nominal Value Are Given or
Offered
If an organization offers goods or services of
only nominal value through a special event
or distributes free, unordered, low-cost items

Specific Instructions for Form 990

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to patrons, report the entire amount received
for such benefits as a contribution on line 1b
(direct public support). Report all related
expenses in Fundraising, column (D), Part
II. See General Instruction L for a definition
of benefits that have a nominal or
insubstantial value.

Section 501(c)(3) Organizations
Correctly dividing gross receipts from
special events into revenue and
contributions is especially important for a
section 501(c)(3) organization that claims
public support as described in section
509(a)(1)/170(b)(1)(A)(vi) or section
509(a)(2). In the public support
computations of these Code sections, the
revenue portion of gross receipts may be (a)
excluded entirely, (b) treated as public
support, or (c) if the revenue represents
unrelated trade or business income, treated
as nonpublic support.
Section 501(c)(3) organizations must
separate gross receipts from special events
into revenue and contributions when
preparing the Support Schedule in Part IV-A
of Schedule A (Form 990 or 990-EZ).

Section 501(c)(9), (17), and (18)
Organizations
These organizations provide participants
with life, sickness, accident, welfare, and
unemployment insurance, pensions, or
similar benefits, or a combination of these
benefits. When such an organization
receives payments from participants or their
employers to provide these benefits, report
the payments on line 2 as program service
revenue, rather than on line 1 as
contributions.

Donations of Services and the Use
of Property Are Not Contributions
In Part I, do not include as contributions on
line 1 the value of services donated to the
organization, or items such as the free use
of materials, equipment, or facilities. See the
instructions for Part III and for Part VI, line
82, for the optional reporting of such
amounts in Parts III and VI.
Any unreimbursed expenses of officers,
employees, or volunteers do not belong on
the Form 990 or Form 990-EZ. See the
discussions for charitable contributions and
employee business expenses in Pub. 526
and Pub. 463, respectively.

Grants That Are Equivalent to
Contributions
Grants that encourage an organization
receiving the grant to carry on programs or
activities that further its exempt purposes
are grants that are equivalent to
contributions. Report them on line 1. The
grantor may require that the programs of the
grant recipient (grantee) conform to the
grantor’s own policies and may specify the
use of the grant, such as use for the
restoration of a historic building or a voter
registration drive.
A grant is still equivalent to a contribution
if the grant recipient provides a service or
makes a product that benefits the grantor
incidentally. See Examples in the line 1d
instructions. However, a grant is a payment
for services, and not a contribution, if the
grant requires the grant recipient to provide
that grantor with a specific service, facility,

Specific Instructions for Form 990

or product rather than to give a direct benefit
primarily to the general public or to that part
of the public served by the organization. In
general, do not report as contributions any
payments for a service, facility, or product
that primarily give some economic or
physical benefit to the payer (grantor).
Example. A public interest organization
described in section 501(c)(4) makes a
grant to another organization to conduct a
nationwide survey to determine voter
attitudes on issues of interest to the grantor.
The grantor plans to use the results of the
survey to plan its own program for the next 3
years. Under these circumstances, since the
survey serves the grantor’s direct needs and
benefits the grantor more than incidentally,
the grant to the organization making the
survey is not a contribution. The grant
recipient should not report the grant as a
contribution but should report it on line 2 as
program service revenue.
Treat research to develop products for
the payer’s use or benefit as directly serving
the payer. However, generally, basic
research or studies in the physical or social
sciences should not be treated as serving
the payer’s needs.
See Regulations section 1.509(a)-3(g) to
determine if a grant is a contribution
reportable on line 1b or a revenue item
reportable elsewhere on Form 990.

Line 1a. Contributions to Donor
Advised Funds
Complete line 1a, only if the organization is
a sponsoring organization that maintains
one or more donor advised funds. Enter the
gross amounts of contributions, gifts, grants,
and bequests received for all donor advised
funds the organization maintains.
A sponsoring organization is any
organization which:
• Is described in section 170(c), except for
governmental entities described in section
170(c)(1),
• Is not a private foundation as defined in
section 509(a), and
• Maintains one or more donor advised
funds.
In general, a donor advised fund is a
fund or account:
1. Which is separately identified by
reference to contributions of a donor or
donors;
2. Which is owned and controlled by a
sponsoring organization; and
3. For which the donor (or any person
appointed or designated by the donor) has
or expects to have advisory privileges
concerning the distribution or investment of
amounts held in the donor advised funds or
accounts because of the donor’s status as a
donor.
Exception. A donor advised fund does not
include:
1. Any fund or account that makes
distributions only to a single identified
organization or governmental entity, or
2. Any fund or account for a person
described in 3 above that gives advice about
which individuals receive grants for travel,
study, or other similar purposes, if:
a. The person’s advisory privileges are
performed exclusively by such person in
their capacity as a committee member of

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which all of the committee members are
appointed by the sponsoring organization.
b. No combination of persons with
advisory privileges; described in 3 above, or
persons related to those in 3 above, directly
or indirectly control the committee.
c. All grants from the fund or account
are awarded on an objective and
nondiscriminatory basis according to 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).

Line 1b. Direct Public Support
Contributions, gifts, grants, and similar
amounts received. Enter the gross
amounts of contributions, gifts, grants, and
bequests that the organization received
directly from the public. Do not include any
amounts previously reported on line 1a on
this line. Include:
• All donated items. For example, a car is
donated to an organization. Immediately
after the organization receives the donated
car, the organization sells the car. The
organization includes the value of the car as
of the time of its receipt as a contribution on
line 1b and includes it in the total on line 1e
as a noncash contribution.
• All funds or the entire value of noncash
items raised by an outside fundraiser in a
charity’s name and not just the amount
actually received by the charity. For
example, a corporation solicits and sells
cars in a charity’s name. When a car is
received, its entire value is reported as a
contribution.
• Amounts received from individuals, trusts,
corporations, estates, and foundations, or
raised by an outside professional fundraiser.
• Include contributions and grants from
public charities and other exempt
organizations that are neither fundraising
organizations nor affiliates of the filing
organization.
• See the instructions for line 1c.
Membership dues. Report on line 1b
membership dues and assessments that
represent contributions from the public
rather than payments for benefits received
or payments from affiliated organizations.
See the instructions for line 3.
Government contributions (grants).
Report government grants on line 1d if they
represent contributions, or on line 2 (and on
line 93(g) of Part VII), if they represent fees
for services. See the instructions under the
heading, Grants that are equivalent to
contributions, earlier and the instructions for
line 1d later.
Commercial co-venture. Report amounts
contributed by a commercial co-venture on
line 1b as a contribution received directly
from the public. These are amounts
received by an organization (donee) for
allowing an outside organization (donor) to
use the donee’s name in a sales promotion
campaign. In such a campaign, the donor
advertises that it will contribute a certain
dollar amount to the donee organization for
each unit of a particular product or service
sold or for each occurrence of a specific
type.

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Contributions received through special
events. Report contributions received
through special events on line 1b. See the
preceding line 1 instructions and the
instructions for Lines 9a through 9c.

Line 1c. Indirect Public Support
Enter the total contributions received
indirectly from the public through solicitation
campaigns conducted by federated
fundraising agencies and similar fundraising
organizations (such as a United Way
organization and certain sectarian
federations). These organizations normally
conduct fundraising campaigns within a
single metropolitan area or some part of a
particular state and allocate part of the net
proceeds to each participating organization
on the basis of the donors’ individual
designations and other factors.
Include on line 1c amounts contributed
by other organizations closely associated
with the reporting organization. This
includes contributions received from a
parent organization, subordinate, or another
organization with the same parent. National
organizations that share in fundraising
campaigns conducted by their local affiliates
should report the amount they receive on
line 1c.
Do not include any amounts previously
reported on line 1a on this line.

Line 1d. Government Contributions
(Grants)
The general line 1 instructions, under the
heading, Grants That Are Equivalent to
Contributions, earlier, apply to this item in
particular. A grant or other payment from a
governmental unit is treated as a
contribution if its primary purpose is to
enable the donee to provide a service to, or
maintain a facility for, the direct benefit of
the public rather than to serve the direct and
immediate needs of the grantor even if the
public pays part of the expense of providing
the service or facility.
The following are examples of
governmental grants and other payments
that are treated as contributions.
Examples.
1. Payments by a governmental unit for
the construction or maintenance of library or
hospital facilities open to the public.
2. Payments under government
programs to nursing homes or homes for the
aged in order to provide health care or other
services to their residents.
3. Payments to child placement or child
guidance organizations under government
programs serving children in the community.
The general public gets the primary and
direct benefit from these payments and any
benefit to the governmental unit itself would
be indirect and insubstantial as compared to
the public benefit.
Do not include any amounts previously
reported on line 1a on this line.

Line 1e. Total Contributions, etc.
Enter the total of amounts reported on lines
1a through 1d. In the entry spaces in the
description column for line 1e, enter the
separate totals for cash and noncash
contributions, gifts, grants, and similar
amounts received. The total of the two
amounts must equal the total on line 1e.

Report as cash contributions, only
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. If the organization records
pledges as contributions, at the time the
pledges are made (rather than when the
pledges are collected), include as cash
contributions, only those pledges actually
collected in cash during the year and
pledges uncollected at the end of the year
that are reasonably expected to be paid in
cash in a later year.
Report all other contributions, as
noncash contributions in the space
provided. Be sure to include as a noncash
contribution donated items like cars and
clothing valued as of the time of their receipt
even if these items were made available for
sale immediately after they were received.
See General Instruction L and Schedule B
(Form 990, 990-EZ, or 990-PF), and the
instructions for lines 1 and 1b for a
discussion of noncash contributions.
Noncash contributions do not include
donated services, which may be reported on
line 82 and in the narrative section of Part
III.
Schedule of Contributors. Attach
Schedule B (Form 990, 990-EZ, or 990-PF).
See General Instruction L and the Specific
Instructions for Completing the Heading of
Form 990, Item M.

Lines 2 through 11
Do not enter any contributions on
lines 2 through 11. Enter all
CAUTION contributions on line 1. If the
organization enters contributions on lines 2
through 11, it will be unable to complete Part
VII correctly. Line 105 (the sum of amounts
entered in columns (B), (D), and (E) for lines
93 through 103 of Part VII, Analysis of
Income-Producing Activities) should match
the total of amounts entered for correlating
lines 2 through 11 of Part I. See the
instructions for Part VII.

!

Line 2. Program Service Revenue
Including Medicare, Medicaid
Payments and Government Fees
and Contracts
Enter the total of program service revenue
(exempt function income) as reported in Part
VII, lines 93(a) through (g), columns (B), (D),
and (E). Program services are primarily
those that form the basis of an
organization’s exemption from tax. For a
more detailed description of program
services, refer to the instructions for Part II,
column (B), Program services.
Example. A hospital would report on this
line all of its charges for medical services
(whether to be paid directly by the patients
or through Medicare, Medicaid, or other
third-party reimbursement), hospital parking
lot fees, room charges, laboratory fees for
hospital patients, and related charges for
services.
Insurance premiums. A section
501(c)(15) organization would report on this
line all of its insurance premiums received.
The amount reported here for insurance
premiums should correlate with the amounts
reported on line 93, columns (B), (D), and
(E).

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Program service revenue. Program
service revenue includes income earned by
the organization for providing a government
agency with a service, facility, or product
that benefited that government agency
directly rather than benefiting the public as a
whole. See the line 1d instructions for
reporting guidelines when payments are
received from a government agency for
providing a service, facility, or product for
the primary benefit of the general public.
Program service revenue also includes:
tuition received by a school; revenue from
admissions to a concert or other performing
arts event or to a museum; royalties
received as author of an educational
publication distributed by a commercial
publisher; interest income on loans a credit
union makes to its members; payments
received by a section 501(c)(9) organization
from participants, or employers of
participants, for health and welfare benefits
coverage; insurance premiums received by
a fraternal beneficiary society; and
registration fees received in connection with
a meeting or convention.
Program-related investments. Program
service revenue also includes income from
program-related investments. These
investments are made primarily to
accomplish an exempt purpose of the
investing organization rather than to
produce income. Examples are scholarship
loans and low interest loans to charitable
organizations, indigents, or victims of a
disaster.
Rental income from an exempt function
is another example of program-related
investment income. When an organization
rents to an unaffiliated exempt organization
at less than fair rental value for the purpose
of aiding that tenant’s exempt function, the
reporting organization should report such
rental income as program service revenue
on line 2. See also the instructions for line
6a. For purposes of this return, report all
rental income from an affiliated organization
on line 2.
Unrelated trade or business activities.
Unrelated trade or business activities (not
including any special events or activities)
that generate fees for services may also be
program service activities. A social club, for
example, should report as program service
revenue the fees it charges both members
and nonmembers for the use of its tennis
courts and golf course.
Sales of inventory items by hospitals,
colleges, and universities. Books and
records maintained in accordance with
generally accepted accounting principles for
hospitals, colleges, and universities are
more specialized than books and records
maintained according to those accounting
principles for other types of organizations
that file Form 990. Accordingly, hospitals,
colleges, and universities may report, as
program service revenue on line 2, sales of
inventory items otherwise reportable on line
10a. In that event, show the applicable cost
of goods sold as program service expense
on line 13 of Part I and in column (B) of Part
II. All other organizations, however, should
not report sales of inventory items on line 2.

Specific Instructions for Form 990

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Line 3. Membership Dues and
Assessments
Enter members’ and affiliates’ dues and
assessments that are not contributions.
Dues and assessments received that
compare reasonably with available
benefits. When dues and assessments are
received that compare reasonably with
membership benefits received, report such
dues and assessments on line 3.
Organizations described in section
501(c)(5), (6), or (7) generally provide
benefits that have a reasonable relationship
to dues, although benefits to members may
be indirect.
Dues or assessments received that
exceed the value of available
membership benefits. Whether or not
membership benefits are used, dues
received by an organization, to the extent
they are more than the monetary value of
the membership benefits available to the
dues payer, are a contribution that should
be reported on line 1b. See Rev. Rul.
54-565, 1954-2 C.B. 95 and Rev. Rul.
68-432, 1968-2 C.B. 104.
Dues received primarily for the
organization’s support. If a member pays
dues mainly to support the organization’s
activities and not to obtain benefits of more
than nominal monetary value, those dues
are a contribution to the organization
includible on line 1b.
Examples of membership benefits.
These include subscriptions to publications,
newsletters (other than one about the
organization’s activities only), free or
reduced-rate admissions to events the
organization sponsors, the use of its
facilities, and discounts on articles or
services that both members and
nonmembers can buy. In figuring the value
of membership benefits, do not include
intangible benefits, such as the right to
attend meetings, vote or hold office in the
organization, and the distinction of being a
member of the organization.

Line 4. Interest on Savings and
Temporary Cash Investments
Enter the amount of interest income from
savings and temporary cash investments
reportable on line 46. So-called dividends or
earnings received from mutual savings
banks, money market funds, etc., are
actually interest and should be entered on
line 4.

Line 5. Dividends and Interest from
Securities
Enter the amount of dividend and interest
income from equity and debt securities
(stocks and bonds) of the type reportable on
line 54. Include amounts received from
payments on securities loans, as defined in
section 512(a)(5). Do not include any capital
gains dividends that are reportable on line 8.
See the instructions for line 2 for reporting
income from program-related investments.

Line 6a. Gross Rents
Enter on line 6a the rental income received
for the year from investment property
reportable on line 55. Do not include on line
6a rental income related to the reporting
organization’s exempt function (program
service). Report such income on line 2. For
example, an exempt organization whose

Specific Instructions for Form 990

exempt purpose is to provide low-rental
housing to persons with low income would
report that rental income as program service
revenue on line 2. Rental income received
from an unaffiliated exempt organization is
generally considered as unrelated to the
reporting organization’s exempt purpose
and reportable on line 6a. However, note an
exception given in the instructions for line 2
when the reporting organization aids an
unaffiliated organization with its exempt
function.
Only for purposes of completing this
return, the reporting organization must
report any rental income received from an
affiliated exempt organization as program
service revenue on line 2.

Line 6b. Rental Expenses
Enter the expenses paid or incurred for the
income reported on line 6a. Include interest
related to rental property and depreciation if
it is recorded in the organization’s books
and records. Report in column (B) of Part II
Program services any rental expenses
allocable to rental income reportable as
program service revenue on line 2.

Line 6c. Net Rental Income or
(Loss)
Subtract line 6b from line 6a. Show any loss
in parentheses.

Line 7. Other Investment Income
Enter the amount of investment income not
reportable on lines 4 through 6 and describe
the type of income in the space provided or
in an attachment. The income should be the
gross amount derived from investments
reportable on line 56. Include, for example,
royalty income from mineral interests owned
by the organization. However, do not include
income from program-related investments.
See the instructions for line 2. Also, do not
include unrealized gains and losses on
investments carried at market value. See
the instructions for line 20.

Lines 8a through 8d. Gains (or
Losses) From Sale of Assets Other
Than Inventory
Report, on lines 8a through 8c, all sales of
securities in column (A). Use column (B) to
report sales of all other types of investments
(such as real estate, royalty interests, or
partnership interests) and all other
noninventory assets (such as
program-related investments and fixed
assets used by the organization in its related
and unrelated activities).
On line 8a, for each column, enter the
total gross sales price of all such assets.
Total the cost or other basis (less
depreciation) and selling expenses and
enter the result on line 8b. On line 8c, enter
the net gain or loss.
On lines 8a and 8c, also report capital
gains dividends, the organization’s share of
capital gains and losses from a partnership,
and capital gains distributions from trusts.
Indicate the source on the schedule
described later.
Combine the gain and/or loss figures
reported on line 8c, columns (A) and (B) and
report that total on line 8d. Do not include
any unrealized gains or losses on securities
carried at market value in the books of
account. See the instructions for line 20.

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For reporting sales of securities on Form
990, the organization may use the more
convenient average cost basis method to
figure the organization’s gain or loss. When
a security is sold, compare its sales price
with the average cost basis of the particular
security to determine gain or loss. However,
generally, for reporting sales of securities on
Form 990-T, do not use the average cost
basis to determine gain or loss.
Nonpublicly traded securities and
noninventory items. Attach a schedule
showing the sale or exchange of nonpublicly
traded securities and the sale or exchange
of other assets that are not inventory items.
The schedule should show security
transactions separately from the sale of
other assets. Show for each of these assets:
• Date acquired and how acquired,
• Date sold and to whom sold,
• Gross sales price,
• Cost, other basis, or if donated, value at
time acquired (state which),
• Expense of sale and cost of
improvements made after acquisition, and
• If depreciable property, depreciation since
acquisition.
Publicly traded securities. On the
attached schedule, for sales of publicly
traded securities through a broker, total the
gross sales price, the cost or other basis,
and the expenses of sale on all such
securities sold, and report lump-sum figures
in place of the detailed reporting required by
the above paragraph. Publicly traded
securities include common and preferred
stocks, bonds (including governmental
obligations), and mutual fund shares that
are listed and regularly traded in an
over-the-counter market or on an
established exchange and for which market
quotations are published or otherwise
readily available.

Lines 9a through 9c. Special
Events and Activities
On the appropriate line, enter the gross
revenue, expenses, and net income (or loss)
from all special events and activities, such
as dinners, dances, carnivals, raffles, bingo
games, other gaming activities, and
door-to-door sales of merchandise.
These activities only incidentally
accomplish an exempt purpose. Their sole
or primary purpose is to raise funds that are
other than contributions to finance the
organization’s exempt activities. This is
done by offering goods or services that have
more than a nominal value (compared to the
price charged) for a payment that is more
than the direct cost of those goods or
services.
The gross revenue from gaming activities
and other special events must be reported in
the right-hand column on line 9a without
reduction for cash or noncash prizes, cost of
goods sold, compensation, fees, or other
expenses. Check the box for gaming if the
organization conducted directly, or through a
promoter, any amount of gaming during the
year.
Gaming includes (but is not limited to):
bingo, pull tabs, instant bingo, 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

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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.
Characterizing any required payment as
a donation or contribution on tickets or on
advertising or solicitation materials does not
affect how such payments should be
reported on Form 990 or Form 990-EZ. As
discussed in the instructions for line 1, the
amount of the contribution is the excess of
the amount paid over the retail value of the
goods or services received by the payer.
See also Pub. 526.
Special events may generate both
revenue and contributions. Special
events sometimes generate both
contributions and revenue. When a buyer
pays more than the retail value of the goods
or services furnished, enter:
• As gross revenue, on line 9a (in the
right-hand column), the retail value of the
goods or services,
• As a contribution, on both line 1b and line
9a (within the parentheses), the amount
received that exceeds the retail value of the
goods or services given.
Report on line 9b only the expenses
directly attributable to the goods or services
the buyer receives from a special event.
Fundraising expenses attributable to
contributions, reported on both line 1b and
line 9a (within the parentheses), are
reportable in Part II, column (D),
Fundraising. If the organization includes an
expense on line 9b, do not report it again on
line 10b or in Part II. Expenses reported on
line 10b relate to sales of inventory.
Expenses reported in Part II, column (D),
relate to contributions raised through
fundraising.
Example. At a special event, an
organization received $100 in gross receipts
for goods valued at $40. The organization
entered gross revenue of $40 on line 9a (in
the right-hand column) and entered a
contribution of $60 on both line 1b and line
9a (within the parentheses). The
contribution of $60 was the difference
between the gross revenue of $40 and the
gross receipts of $100.
The expenses directly relating to the sale
of the goods would be reported on line 9b.
However, all expenses of raising
contributions would be reported in column
(D), Fundraising, Part II and not on line 9b.
For more details about contributions
received through fundraising, and
contributions and revenue received through
special events, see the line 1 instructions.
See also General Instruction L and its
references.
Sales or gifts of goods or services of
only nominal value. If the goods or
services given or offered at special events
have only nominal value, include all of the
receipts as contributions on line 1b and all of
the related expenses as fundraising
expenses on line 15 and in column (D) of
Part II. See General Instruction L for a
description of nominal or insubstantial
benefits.
An activity may generate only
contributions. An activity that generates
only contributions, such as a solicitation

campaign by mail, is not a special event and
should not be reported on line 9.
Contributions from such an activity are
reportable on line 1, and the related
fundraising expenses are reportable in
column (D), Part II.
The proceeds of solicitation campaigns in
which the names of contributors and other
respondents are entered in a drawing for the
awarding of prizes (so-called sweepstakes
or lotteries) are contributions, reportable on
line 1, and the related expenses are
fundraising expenses, reportable in column
(D) of Part II. However, raffles and lotteries
in which a payment of at least a specified
minimum amount is required for each entry
are special events, reportable on line 9,
unless the prizes awarded have only
nominal value. Reporting payments in their
entirety as contributions when gifts or
services given are nominal in value is
discussed above.
Attached schedule. Attach a schedule
listing the three largest fundraising events,
as measured by gross receipts. If gaming is
conducted, treat different types of gaming
separately to determine the three largest
events. For example, treat bingo and pull
tabs as separate fundraising events.
Describe each of these events by listing the
type of event and the number of occasions
that the event occurred and show (for each
event):
1. Gross receipts,
2. Contributions included in gross
receipts (see Special events may generate
both revenue and contributions, earlier),
3. Gross revenue (gross receipts less
contributions),
4. Direct expenses, and
5. Net income or (loss) (gross revenue
less direct expenses).
For gaming, direct expenses include: cash
and noncash prizes, compensation to bingo
callers and workers, rental of gaming
equipment, cost of bingo supplies such as
pull tab deals, etc.
Include the same information, in total
figures, for all other special events held that
were not among the three largest. Indicate
the type and number of the events not listed
individually (for example, three dances and
two raffles).
An example of this schedule of special
events might appear in columnar form as
follows:
Special Events (and the
number of occasions that
the event occurred):

(A)
#

Gross Receipts

(B)
#

(C) All
# Other Total

$xx

$xx

$xx

$xx

$xx

Less: Contributions

xx

xx

xx

xx

xx

Gross Revenue

xx

xx

xx

xx

xx

Less: Direct Expenses
Net Income or (loss)

xx

xx

xx

xx

xx

$xx

$xx

$xx

$xx

$xx

If the organization uses the above
schedule, report the total for Contributions
on line 1b of Form 990 and on line 9a (within
the parentheses). Report the totals for
Gross Revenue, in the right-hand column,
on line 9a; Direct Expenses on line 9b; and
Net Income or (loss) on line 9c.

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Lines 10a through 10c. Gross
Profit or (Loss) from Sales of
Inventory
Enter the gross sales (less returns and
allowances), cost of goods sold, and gross
profit or (loss) from the sale of inventory
items. These sales do not include items sold
at special events that are reportable on line
9. Sales of inventory items reportable on line
10 are sales of those items the organization
makes to sell to others or buys for resale.
Sales of investments on which the
organization expected to profit by
appreciation and sale are not reported here.
Report sales of investments on line 8.
On line 10a, report gross sales revenue
from sales of inventory items, whether the
sales activity is an exempt function of the
organization or an unrelated trade or
business.
On line 10b, report the cost of goods sold
related to the sales of such inventory. The
usual items included in cost of goods sold
are direct and indirect labor, materials and
supplies consumed, freight-in, and a
proportion of overhead expenses. Marketing
and distribution costs are not included in
cost of goods sold but are reported in Part II,
column (B), Program services.
Attached schedule. In an attached
schedule, give a breakdown of items sold;
(for example, sales of food, souvenirs,
electronic equipment, uniforms, or
educational publications).

Line 11. Other Revenue
Enter the total amount from Part VII, lines
103(a) through (e) (Other revenue), columns
(B), (D), and (E). This figure represents the
total income from all sources not covered by
lines 1 through 10 of Part I. Examples of
income includible on line 11 are interest on
notes receivable not held as investments or
as program-related investments (defined in
the line 2 instructions); interest on loans to
officers, directors, trustees, key employees,
and other employees; and royalties that are
not investment income or program service
revenue.

Lines 13 through 15 —Program
Services, Management and
General, and Fundraising
Expenses
Section 4947(a)(1) nonexempt charitable
trusts and section 501(c)(3) and (4)
organizations. Complete Part II and then
enter on lines 13 through 15 the appropriate
amounts from the totals for columns (B), (C),
and (D) reported on line 44, Part II.
All other organizations. All other
organizations are not required to complete
lines 13 through 15 of the Form 990.

Line 16. Payments to Affiliates
This expense classification is used to report
certain types of payments to organizations
affiliated with (closely related to) a reporting
agency.
Payments to affiliated state or national
organizations. Dues paid by the local
charity to its affiliated state or national
(parent) organization are usually reported on
line 16. Report on this line predetermined
quota support and dues (excluding
membership dues of the type described
below) by local agencies to their state or

Specific Instructions for Form 990

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national organizations for unspecified
purposes; that is, general use of funds for
the national organization’s own program and
support services.
Purchases from affiliates. Purchases of
goods or services from affiliates are not
reported on line 16 but are reported as
expenses in the usual manner.
Expenses for providing goods or
services to affiliates. In addition to
payments made directly to affiliated
organizations, expenses incurred in
providing goods or services to affiliates may
be reported on line 16 if:
1. The goods or services provided are
not related to the program services
conducted by the organization furnishing
them (for example, when a local
organization incurs expenses in the
production of a solicitation film for the state
or national organization); and
2. The costs involved are not connected
with the management and general or
fundraising functions of the reporting
organization. For example, when a local
organization gives a copy of its mailing list to
the state or national organization, the
expense of preparing the copy provided may
be reported on line 16, but not expenses of
preparing and maintaining the local
organization’s master list.
Federated fundraising agencies. These
agencies (see the instructions for line 1c)
should include in their own support the full
amount of contributions received in
connection with a solicitation campaign they
conduct, even though donors designate
specific agencies to receive part or all of
their individual contributions. These
fundraising organizations should report the
allocations to participating agencies as
grants and allocations (line 22b) and quota
support payments to their state or national
organization as payments to affiliates (line
16).
Voluntary awards or grants to affiliates.
Do not report on line 16 voluntary awards or
grants made by the reporting agency to its
state or national organization for specified
purposes. Report these awards or grants on
line 22b, Other Grants and Allocations.
Membership dues paid to other
organizations. Report membership dues
paid to obtain general membership benefits,
such as regular services, publications, and
materials, from other organizations as Other
expenses on line 43. This is the case, for
example, if a charitable organization pays
dues to a trade association comprised of
otherwise unrelated members.
Attached schedule. Attach a schedule
listing the name and address of each
affiliate that received payments reported on
line 16. Specify the amount and purpose of
the payments to each affiliate.
Properly distinguishing between

TIP payments to affiliates and grants and
allocations is especially important if
the organization uses Form 990 for state
reporting purposes. See General Instruction
E. If the organization uses Form 990 only for
reporting to the IRS, payments to affiliated
state or national organizations that do not
represent membership dues reportable as
Other expenses on line 43 (see instructions,
earlier) may be reported either on line 16 or

Specific Instructions for Form 990

line 22 and explained in the required
attachment.

Line 17. Total Expenses
Organizations using only column (A) of Part
II should enter the total of line 16 and line 44
of column (A), Part II, on line 17. Other
organizations should enter the total of lines
13 through 16. Organizations using Form
5500 or an approved DOL form as a partial
substitute for Form 990 should enter the
total expense figure from Form 5500, or
from the required reconciliation schedule if
Form LM-2 or LM-3 is used. See General
Instruction F.

Line 18. Excess or (Deficit) for the
Year
Enter the difference between lines 12 and
17. If line 17 is more than line 12, enter the
difference in parentheses.

Line 19. Net Assets or Fund
Balances, Beginning of Year
Enter the balance at the beginning of the
year as reported in column (A) of line 73 (or
from Form 5500 or an approved DOL form if
General Instruction F applies). The balance
at the beginning of the year for line 19 was
the end of the year balance for line 21 and
73 as reported on the organization’s prior
year return.

Line 20. Other Changes in Net
Assets or Fund Balances
Attach a schedule explaining any changes in
net assets or fund balances between the
beginning and end of the year that are not
accounted for by the amount on line 18.
Amounts to report here include adjustments
of earlier years’ activity; unrealized gains
and losses on investments carried at market
value; and any difference between fair
market value and book value of property
given as an award or grant. See General
Instruction G regarding the reporting of a
section 481(a) adjustment to conform to
SFAS 116.

Line 21. Net Assets or Fund
Balances, End of Year
Enter the total of lines 18, 19, and 20. This
total figure must equal the amount reported
for the end of the year in column (B) of line
73.

Part II—Statement of
Functional Expenses
In General —
Column (A)
All organizations must complete column (A)
unless they are using an approved DOL
form or Form 5500 as a partial substitute for
Form 990. See General Instruction F.

Columns (B), (C), and (D)
These columns are optional for all
organizations except section 4947(a)(1)
nonexempt charitable trusts and section
501(c)(3) and (4) organizations. Section
4947(a)(1) nonexempt charitable trusts and
section 501(c)(3) and (4) organizations must
complete columns (B), (C), and (D).
In Part II, the organization’s expenses
are designated by object classification (for
example, salaries, legal fees, supplies, etc.)

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and allocated into three functions: Program
services (column (B)); Management and
general (column (C)); and Fundraising
(column (D)). These functions are explained
below in the instructions for the columns. Do
not include in Part II any expense items the
organization must report on lines 6b, 8b, 9b,
10b, or 16 in Part I.
For reporting to the IRS only, use the
organization’s normal accounting method to
report total expenses in column (A) and to
segregate them into functions under
columns (B), (C), and (D). However, for
state reporting requirements, see General
Instructions E and G. If the accounting
system does not provide for this type of
segregation, a reasonable method of
allocation may be used. The amounts
reported should be accurate and the method
of allocation documented in the
organization’s records.
Report, in the appropriate column,
expenses that are directly attributable to a
particular functional category. In general,
allocate expenses that relate to more than
one functional category. For example,
allocate employees’ salaries on the basis of
each employee’s time. For some shared
expenses such as occupancy, supplies, and
depreciation of office equipment, use an
appropriate basis for each kind of cost.
However, the organization should report
some other shared expenses in column (C)
only. The column instructions below discuss
allocating expenses.

Column (A) —Total
For column (A), total each line item of
columns (B), (C), and (D) in Part II. Except
for expenses the organization reports on
lines 6b, 8b, 9b, 10b, or 16 of Part I, the
organization should use column (A) to report
all expenses the organization paid or
incurred.

Column (B) —Program Services
Program services are mainly those activities
that the reporting organization was created
to conduct and which, along with any
activities commenced subsequently, form
the basis of the organization’s current
exemption from tax. They may be
self-funded or funded out of contributions,
accumulated income, investment income, or
any other source. Fundraising expenses
should not be reported as program-related
expenses even though one of the functions
of the organization is to solicit contributions
for other organizations.
Program services can also include the
organization’s unrelated trade or business
activities. For example, publishing a
magazine is a program service even though
the magazine contains both editorials and
articles that further the organization’s
exempt purpose and advertising, the income
from which is taxable as unrelated business
income.
If an organization receives a grant to do
research, produce an item, or perform a
service, either to meet the grantor’s specific
needs or to benefit the public directly, the
costs incurred represent program service
expenses. Do not treat these costs as
fundraising expenses, even if the
organization reports the grant on line 1 as a
contribution.

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Column (C) — Management and
General
Use column (C) to report the organization’s
expenses for overall function and
management, rather than for its direct
conduct of fundraising activities or program
services. Overall management usually
includes the salaries and expenses of the
chief officer of the organization and that
officer’s staff. If part of their time is spent
directly supervising program services and
fundraising activities, their salaries and
expenses should be allocated among those
functions.
Other expenses to report in column (C)
include those for meetings of the board of
directors or similar group; committee and
staff meetings (unless held in connection
with specific program services or fundraising
activities); general legal services;
accounting (including patient accounting and
billing); general liability insurance; office
management; auditing, personnel, and other
centralized services; preparation,
publication, and distribution of an annual
report; and investment expenses (however,
report rental income expenses on line 6b
and program-related income expenses in
column (B)).
The organization should report only
general expenses in column (C). Do not use
this column to report costs of special
meetings or other activities that relate to
fundraising or specific program services.

Column (D) — Fundraising
Fundraising expenses are the total
expenses incurred in soliciting contributions,
gifts, grants, etc. Report as fundraising
expenses all expenses, including allocable
overhead costs, incurred in: (a) publicizing
and conducting fundraising campaigns; (b)
soliciting bequests and grants from
foundations or other organizations, or
government grants reportable on line 1d; (c)
participating in federated fundraising
campaigns; (d) preparing and distributing
fundraising manuals, instructions, and other
materials; and (e) conducting special events
that generate contributions reportable on
line 1b, in addition to revenue reportable in
the right-hand column on line 9a. However,
report any expenses that are directly
attributable to revenue shown on line 9a (for
example, the direct expenses incurred in
furnishing the goods or services sold) on
line 9b.

Allocating Indirect Expenses
Colleges, universities, hospitals, and other
organizations that accumulate indirect
expenses in various cost centers (such as
the expenses of operating and maintaining
the physical plant) that are reallocated to the
program services and other functional areas
of the organization in single or multiple steps
may find it easier to report these expenses
in the following optional manner:
First, report the expenses of these
indirect cost centers on lines 25 through 43
of column (C), Management and general,
along with the expenses properly reportable
in that column.
Second, allocate the total expenses for
each cost center to columns (B), (C), and
(D) (Program services, Management and
general, and Fundraising) as a separate
item entry on line 43, Other expenses. Enter

the name of the cost center on line 43. If any
of the cost center’s expenses are to be
allocated to the expenses listed in Part I
(such as the expenses attributable to special
events and activities), enter these expenses
as a negative figure in columns (A) and (C).
This prevents reporting the same expense in
both Parts I and II. If part of the total cost
center expenses are to be allocated to
columns (B), Program services, and (D),
Fundraising, enter these expenses as
positive amounts in these columns and as
single negative amounts in column (C),
Management and general. Do not make any
entries in column (A), Total, for these
offsetting entries.

difficult it is to preserve the object
classification identity of the expenses of
each cost center (for example, salaries,
interest, supplies, etc.). Using the reporting
method described above avoids this
problem.

Example. An organization reports in
column (C) $50,000 of its actual
management and general expenses and
$100,000 of expenses of an indirect cost
center that are allocable in part to other
functions. The total of lines 25 through 43 of
column (C) would be $150,000 before the
indirect cost center allocations were made.
Assume that $10,000 (of the $100,000 total
expenses of the cost center) was allocable
to fundraising; $70,000 to various program
services; $15,000 to management and
general functions; and $5,000 to special
events and activities. To report this in Part II
under this optional method:
1. Indicate the cost center, the expenses
of which are being allocated, on line 43, as
Allocation of (specify) expenses;
2. Enter a decrease of $5,000 on the
same line in the column (A), Total,
representing the special event expenses
that were already reported on line 9b in Part
I;
3. Enter $70,000 on the same line in
column (B), Program services;
4. Enter $10,000 on the same line in
column (D), Fundraising; and
5. Enter a decrease of $85,000 on the
same line in column (C), Management and
general, to represent the allocations to
functional areas other than management
and general.

The following instructions apply to lines 22a
and 22b.
Report voluntary awards and grants to
affiliated organizations for specific
(restricted) purposes or projects also on line
22, but not required payments to affiliates
reportable on line 16.
Report scholarship, fellowship, and
research grants to individuals on line 22.
Certain other payments to, or for the benefit
of, individuals may be reportable on line 23
instead. See the instructions for line 23 for
details.
Report only the amount of actual grants
and awards on line 22. Report expenses
incurred in selecting recipients, or
monitoring compliance with the terms of a
grant or award, on lines 25 through 43.
In the spaces provided, give separate
totals for cash and noncash grants and
allocations made. Cash grants include only
grants and allocations paid by cash, checks,
money orders, wire transfers, and other
charges against funds on deposit at a
financial institution.
Reporting for line 22, in accordance with
SFAS 116, is acceptable for Form 990
purposes, but not required by IRS. However,
see General Instruction E.
An organization that makes a grant to be
paid in future years should, according to
SFAS 116, report the grant’s present value
on line 22. Accruals of present value
increments to the unpaid grant should also
be reported on line 22 in future years.

Line

(A)

(B)

(C)

(D)

25 – 43a . . . . . . $ 150,000 $ —
$150,000 $ —
43b Allocation of
the $100,000
indirect cost
center expenses
reported in (C) . .
(5,000) 70,000
(85,000) 10,000
44 . . . . . . . . . $ 145,000 $ 70,000 $ 65,000 $ 10,000

After making these allocations, the
column (C) total (line 44, column (C)) would
be $65,000, consisting of the $50,000 actual
management and general expense amount
and the $15,000 allocation of the aggregate
cost center expenses to management and
general.
The above is an example of a one-step
allocation that shows how to report the
allocation in Part II. This reporting method
would actually be needed more for multiple
step allocations involving two or more cost
centers. The total expenses of the first
would be allocated to the other functions,
including an allocation of part of these
expenses to the second cost center. The
expenses of the second cost center would
then be allocated to other functions and any
remaining cost centers to be allocated, and
so on. The greater the number of these cost
centers that are allocated out, the more

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The intent of the above instructions
is only to facilitate reporting indirect
CAUTION expenses by both object
classification and function. These
instructions do not permit the allocation to
other functions of expenses that should be
reported as management and general
expenses.

!

Line 22. Grants and Allocations

Line 22a. Grants Paid From Donor
Advised Funds
Enter the amount of awards and grants to
individuals and organizations paid from
donor advised funds on line 22a. See the
line 1a instructions for the definition of a
donor advised fund. See the line 22
instructions, above, for general information
on the reporting of grants and allocations
paid. See the instructions for line 22b for
information about the required schedule.

Line 22b. Other Grants and
Allocations

!

Do not include on line 22b amounts
paid from a donor advised fund.

CAUTION

Enter the amount of other awards and
grants (not included on line 22a) to
individuals and organizations selected by
the filing organization. United Way and
similar fundraising organizations should
include allocations to member agencies.

Specific Instructions for Form 990

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Attached schedule. Attach a schedule of
amounts reported on line 22a and a
separate schedule for line 22b as
applicable. Any grants or allocations
reported on line 22b that were approved
during the year, but not paid by the due date
for filing Form 990 (including extensions),
must be identified and listed separately in
the schedule for line 22b. On the applicable
schedule show: (a) each class of activity; (b)
grantee’s name, address, and the amount
given; and (c) (in the case of grants to
individuals) relationship of grantee if related
by blood, marriage, adoption, or
employment (including employees’ children)
to any person or corporation with an interest
in the organization, such as a creator,
donor, director, trustee, officer, etc.
On the applicable schedule, classify
activities in more detail than in such broad
terms as charitable, educational, religious,
or scientific. For example, identify payments
for nursing services, laboratory construction,
or fellowships.
If property other than cash is given, also
show on the applicable schedule: (a) a
description of the property; (b) its book value
and how the book value was determined; (c)
its fair market value and how the fair market
value was determined; (d) the date of the
gift. If the fair market value of the property
when the organization gave it is the
measure of the award or grant, record any
difference between fair market value and
book value in the organization’s books of
account and on line 20.
Colleges, universities, and primary and
secondary schools are not required to list
the names of individuals who were provided
scholarships or other financial assistance
whether they are the recipients of federal
grant money or not. Instead, these
organizations must (a) group each type of
financial aid provided; (b) indicate the
number of individuals who received the aid;
and (c) specify the aggregate dollar amount.

Line 23. Specific Assistance to
Individuals
Enter the amount of payments to, or for the
benefit of, particular clients or patients,
including assistance rendered by others at
the expense of the filing organization. Do
not include grants to other organizations that
select the person(s) to receive the
assistance available through the use of the
grant funds. For example, report a payment
to a hospital to cover the medical expenses
of a particular individual on line 23, but do
not report a contribution to a hospital to
provide some service to the general public
or to unspecified charity patients on this line.
Also, do not include scholarship, fellowship,
or research grants to individuals even
though selected by the grantor organization.
Report these grants on line 22b, or line 22a,
if applicable.
Attached schedule. Attach a schedule
showing the total payments for each
particular class of activity, such as food,
shelter, and clothing for indigents or disaster
victims; medical, dental, and hospital fees
and charges; and direct cash assistance to
indigents. For payments to indigent families,
do not identify the individuals.

Specific Instructions for Form 990

Line 24. Benefits Paid to or for
Members
For an organization that provides benefits to
members or dependents (such as
organizations exempt under section
501(c)(8), (9), or (17)), attach a schedule.
Show amounts of: (a) death, sickness,
hospitalization, or disability benefits; (b)
unemployment compensation benefits; and
(c) other benefits (state their nature). Do not
report the cost of employment-related
benefits the organization provides its officers
and employees on this line. Report those
expenses on lines 27 and 28.

Line 25. Compensation of Current
and Former Officers, Directors and
Certain Disqualified and Other
Persons
Compensation. Compensation includes all
forms of income earned or received for
services provided.
In Part V-A, give the name and
compensation (if any) of each current
officer, director, trustee, and key employee,
along with the other information requested.
In Part V-B, give the name and
compensation (if any) of each former officer,
director, trustee, and key employee, along
with the other information requested. See
the Part V-A instructions for a definition of
key employee.
Form 941 must be filed to report income
tax withholding and social security and
Medicare taxes. The organization must also
file Form 940 to report Federal
unemployment taxes unless the
organization is not subject to these taxes.
See Pub.15 (Circular E) for details. See also
the discussion of the Trust Fund Recovery
Penalty given in General Instruction D.

Lines 25a and 25b
Enter on line 25a the total compensation
payable for the tax year to current officers,
directors, trustees, and key employees listed
in Part V-A. Enter on line 25b the total
compensation payable for the tax year to
former officers, directors, trustees, and key
employees listed in Part V-B.
Section 501(c)(3) and (c)(4)
organizations and section 4947(a)(1)
non-exempt charitable trusts must allocate
the total compensation in column (A) for
lines 25a and lines 25b by functional
expense in columns (B), (C), and (D).
Example. Allocate the total
compensation figure of line 25a, column (A),
by functional expenses represented by line
25a, columns (B), (C), and (D). For instance,
if key employee A spent 90% of her time
running a program which constitutes the
basis of the organization’s exempt purpose
and 10% in general management of the
organization itself, key employee A’s
compensation should be allocated 90% to
column (B), program services, and 10% to
column (C), management and general.
Conversely, if Director B is not paid as a
member of the board, but is employed by
the organization as a part-time fundraiser,
all of Director B’s compensation should be
allocated to column (D), fundraising.
Attached schedule. For section 501(c)(3)
and (c)(4) organizations and section
4947(a)(1) non-exempt charitable trusts,
attach a schedule showing for each current

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or former officer, director, trustee, and key
employee a breakdown of the compensation
reported on lines 25a and 25b into the same
three classes of compensation shown in
columns (C) through (E) of Parts V-A and
V-B. The attached schedule must be
supplied in addition to filling out lines 25a
and 25b and Parts V-A and V-B.
No reconciliation of differences between
these amounts is required.

Line 25c. Compensation and Other
Distributions to Disqualified
Persons
Enter the total compensation or other
distributions provided to disqualified persons
(as defined under section 4958(f)(1)) and
persons described in section 4958(c)(3) for
the year. For a definition of compensation,
see the instructions for line 25. Distributions
include anything of value provided to a
disqualified person. Do not include on line
25c, amounts previously included on lines
25a or 25b.
For a definition of disqualified persons,
see Disqualified Persons under General
Instruction P, earlier.
Attached schedule. Attach a schedule
showing each disqualified person, who is
not a current or former officer, director,
trustee, or key employee, who received
compensation or any other distribution from
the organization. Provide a breakdown of
the type and amount of compensation or
other distribution as to each disqualified
person.
For each item of contribution or
distribution, the attached schedule should
show the following information (preferably in
a columnar format).
1. Loans and advances,
2. Compensation,
3. Contributions to employee benefit
plans and defined benefit plans,
4. Expense accounts and other
allowances, and
5. Other distributions.

Line 26. Salaries and Wages of
Employees Not Included on Lines
25a, b, and c
Enter the total amount of employees’
salaries and wages, fees, bonuses,
severance payments, and payments of
compensation deferred in a prior year to all
employees not reported on lines 25a, b, or
c.

Line 27. Pension Plan
Contributions Not Included on
Lines 25a, b, and c
Enter the employer’s share of contributions
to qualified and nonqualified pension plans
for the year. Do not include contributions to
qualified pension plans under section 401(a)
for current or former officers, directors,
trustees, or key employees, that were
reported on lines 25a, b, or c.
Complete Form 5500 for the
organization’s plan and file it as a separate
return. If the organization has more than one
plan, complete a Form 5500 for each plan.
File the form by the last day of the 7th
month after the plan year ends. See General
Instruction D for a discussion of Form 5500.

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Line 28. Employee Benefits Not
Included on Lines 25 –27
Enter the organization’s contributions to
employee benefit programs (such as
insurance, health, and welfare programs)
that are not an incidental part of a pension
plan included on line 27.
Do not include contributions on behalf of
current or former officers, directors, trustees,
and key employees, that were included on
lines 25a, b, or c. Report expenses for
employee events such as a picnic or holiday
party on line 28.

Line 29. Payroll Taxes
Enter the amount of federal, state, and local
payroll taxes for the year but only those
taxes that are imposed on the organization
as an employer. This includes the
employer’s share of social security and
Medicare taxes, the Federal unemployment
tax (FUTA), state unemployment
compensation taxes, and other state and
local payroll taxes. Do not include taxes
withheld from employees’ salaries and paid
to the various governmental units such as
federal and state income taxes and the
employees’ shares of social security and
Medicare taxes.

Line 30. Professional Fundraising
Fees
Enter on line 30 fundraising fees paid to
independent contractors and outside
vendors and suppliers in carrying out
fundraising activities. Include on line 30
fundraising expenses such as printing,
paper, envelopes, postage, mailing list
rental, and equipment rental, incurred in a
fundraising activity conducted by an
independent contractor. Fundraising
expenses also include amounts the
organization reimburses to a fundraiser.
For purposes of line 30, fundraising
activities include gaming, vehicle and other
property donation programs, and special
events. Fees and expenses incurred by the
organization, whether by payment to
independent contractors, vendors, or
suppliers, or by deduction from proceeds
received by the organization, are included
on line 30.
Do not include on line 30 salaries of
employees who undertake fundraising as
part of their employment duties.
Compensation related to fundraising paid to
non-key employees is allocated to line 26,
Column (D). Compensation related to
fundraising paid to officers, directors,
trustees, and key employees is allocated to
line 25, Column (D).
In addition to completing line 30, the
organization should keep for its permanent
records a list of fees and expenses for each
fundraising activity. Do not include this list
with the organization Form 990.

Line 31. Accounting Fees
Enter the total accounting and auditing fees
charged by outside firms and individuals
who are not employees of the reporting
organization.

Line 32. Legal Fees
Enter the total legal fees charged by outside
firms and individuals who are not employees
of the reporting organization. Do not include
any penalties, fines, or judgments imposed

against the organization as a result of legal
proceedings. Report those expenses on line
43, Other expenses.

Line 33. Supplies
Enter the total for office, classroom, medical,
and other supplies used during the year, as
determined by the organization’s normal
method of accounting for supplies.

Line 34. Telephone
Enter the total telephone, telegram, and
similar expenses for the year.

Line 35. Postage and Shipping
Enter the total amount of postage, parcel
delivery, trucking, and other delivery
expenses, including the cost of shipping
materials. Include the costs of outside
mailing services on this line.

Line 36. Occupancy
Enter the total amount paid or incurred for
the use of office space or other facilities,
heat, light, power, and other utilities (other
than telephone expenses reported on line
34), outside janitorial services, mortgage
interest, property insurance, real estate
taxes, and similar expenses.
Occupancy expenses paid or incurred for
program-related income, reportable on line
2, are included on line 36. Do not subtract
rental income received from renting or
subletting rented space from the amount
reported for occupancy expense on line 36.
If the activities of the organization’s tenant
are related to the reporting organization’s
exempt purpose, report rental income as
program-service revenue and allocable
occupancy expenses on line 36. However, if
the tenant’s activities are not program
related, report such rental income on line 6a
and related rental expenses on line 6b.
Do not include, as an occupancy
expense, depreciation (reportable on line
42) or any salaries of the reporting
organization’s own employees (reportable
on line 26).

Line 37. Equipment Rental and
Maintenance
Enter the cost of renting and maintaining
office equipment and other equipment,
except for automobile and truck expenses
reportable on lines 35 and 39.

Line 38. Printing and Publications
Enter the printing and related costs of
producing the reporting organization’s own
newsletters, leaflets, films, and other
informational materials on this line. Also
include the cost of any purchased
publications. However, do not include any
expenses, such as salaries or postage, for
which a separate line is provided in Part II.

Line 39. Travel
Enter the total travel expenses, including
transportation costs (fares, mileage
allowances, and automobile expenses),
meals and lodging, and per diem payments.

Line 40. Conferences,
Conventions, and Meetings
Enter the total expenses incurred by the
organization in conducting meetings related
to its activities. Include such expenses as
the rental of facilities, speakers’ fees and
expenses, and printed materials. Include the
registration fees (but not travel expenses)

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paid for sending any of the organization’s
staff to conferences, meetings, or
conventions conducted by other
organizations. However, do not include on
this line the salaries and travel expenses of
the reporting organization’s own officers,
directors, trustees, and employees who
participate.

Line 41. Interest
Enter the total interest expense for the year.
Do not include any interest attributable to
rental property (reportable on line 6b) or any
mortgage interest treated as occupancy
expense on line 36.

Line 42. Depreciation, Depletion,
etc.
If the organization records depreciation,
depletion, and similar expenses, enter the
total for the year. Include any depreciation
(amortization) of leasehold improvements.
The organization is not required to use the
Modified Accelerated Cost Recovery
System (MACRS) to compute the
depreciation reported on Form 990 or Form
990-EZ. If the organization records
depreciation using MACRS, attach Form
4562, or a schedule showing the same
information required by Form 4562. If the
organization does not use MACRS, attach a
schedule showing how depreciation was
computed.
For an explanation of acceptable
methods for computing depreciation, see
Pub. 946.
If the organization claims a deduction for
depletion, attach a schedule explaining the
deduction.

Line 43. Other Expenses
Show the type and amount of each
functional expense for which a separate line
is not provided. The organization may report
minor miscellaneous expenses as a single
total. The total of minor miscellaneous
expenses grouped together on line 43, can
not exceed 5% of the total of all functional
expenses (line 44).
The following expenses must be
categorized and reported separately on line
43:
1. For health care organizations,
payments to heath care professionals who
are not employees of the health care
organization.
2. Investment counseling and other
professional fees. (Do not include
professional fundraising fees, accounting
fees, or legal fees on line 43; these are
reportable on lines 30 through 32.)
3. Penalties, fines, and judgments.
4. Unrelated business income taxes.
5. Insurance and real estate taxes not
attributable to rental property or reported as
occupancy expenses.
6. Other expenses the organization
tracks, not included on other lines of Part II.
7. Payments of travel or entertainment
expenses (including reimbursements for
such costs) for any federal, state or local
government officials (as determined under
section 4946(c)) and their family members
(as determined under section 4946(d)). The
reported total amount should include:
a. Each separate expenditure relating to
a government official or family member of
such official that exceeds $200, and

Specific Instructions for Form 990

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b. Aggregate expenditures relating to a
government official or family member of
such official that exceed $1,000 for the year.
Do not double count expenditures
that are described in both a and b
CAUTION above. For expenditures that are not
specifically identifiable to a particular
individual, the organization may use any
reasonable allocation method to estimate
the cost of the expenditure to an individual.
Amounts not described in a and b above
may be included in this amount or, provided
that such amounts do not exceed 5% of total
functional expenses, may be grouped with
other minor miscellaneous expenses. The
organization is responsible for keeping
records for all travel and entertainment
expenses related to a government official
regardless of whether reported in this
amount or as other minor miscellaneous
expenses.
State reporting — miscellaneous
expenses. Some states that accept Form
990, or Form 990-EZ, in satisfaction of their
filing requirements may require that certain
types of miscellaneous expenses be
itemized regardless of amount. See General
Instruction E.

!

Part III—Statement of Program
Service Accomplishments
A program service is a major (usually
ongoing) objective of an organization, such
as adoptions, recreation for the elderly,
rehabilitation, or publication of journals or
newsletters.
Step
1

2

Specific Instructions for Form 990

All organizations must describe their
exempt purpose achievements for each
of their four largest program services (as
measured by total expenses incurred). If
there were four or fewer of such activities,
describe each program service activity.

• Give reasonable estimates for any
statistical information if exact figures are
not readily available. Indicate that this
information is estimated.
• Be clear, concise, and complete in the
description. Avoid adding an attachment.

Reporting of Joint Costs
Organizations that included in program
service expenses (column (B) of Part II) any
joint costs from a combined educational
campaign and fundraising solicitation must
disclose how the total joint costs of all such
combined activities were reported in Part II.
Organizations answering “Yes” to the
joint-cost question following line 44 must
furnish the relevant financial data in the
spaces provided.
An organization conducts a combined
educational campaign and fundraising
solicitation when it solicits contributions (by
mail, telephone, broadcast media, or any
other means) and includes, with the
solicitation, educational material or other
information that furthers a bona fide
nonfundraising exempt purpose of the
organization.
Expenses attributable to providing
information regarding the organization itself,
its use of past contributions, or its planned
use of contributions received are not
program service expenses and should not
be included in column (B). This is true
whether or not the organization accounts for
joint costs in accordance with the AICPA’s
Statement of Position 98-2, Accounting for
Costs of Materials and Activities of
Not-for-Profit Organizations and State and
Local Government Entities that Include Fund
Raising. Any method of allocating joint costs
to program service expenses must be
reasonable under the facts and
circumstances of each case. Most states
with reporting requirements for charitable
and other organizations that solicit
contributions either require or allow the
reporting of joint costs according to
Statement of Position 98-2 standards.

State the organization’s primary exempt
purpose.

• Describe the activity’s objective, for both
this time period and the longer-term goal,
if the output is intangible, such as in a
research activity.

Add lines 22a through 43g and enter the
totals on line 44 in columns (A), (B), (C), and
(D). Report the total amounts for columns
(B), (C), and (D) in Part I, lines 13 through
15.

3

If part of the total expenses of any
program service consists of grants and
allocations reported on line 22a or 22b,
enter the amount of grants and
allocations in the space provided and
include the grants and allocations in the
Expenses column. If the amount of grants
and allocations entered includes foreign
grants, check the box to the left of the
entry space for Program services
expenses.
• Section 501(c)(3) and (4) organizations,
and section 4947(a)(1) nonexempt
charitable trusts, must show the amount
of grants and allocations to others and
must enter the total expenses for each
program service reported.
• For all other organizations, completing
the Program Services Expenses column
(and the Grants and allocations entry) in
Part III is optional.

4

• See the instructions for line 82.

Part IV—Balance Sheets
All organizations, except those that meet
one of the exceptions in General Instruction
F, must complete all of Part IV and may not
submit a substitute balance sheet. Failure to
complete Part IV may result in penalties for
filing an incomplete return. See General
Instruction K. If there is no amount to report
in column (A), Beginning of year, place a
zero in that column.
See General Instruction E for details on
completing a Form 990, or Form 990-EZ, to
be filed with any state or local governmental
agency.
When a schedule is required to be
attached for any line item in Part IV, it is only
for the end-of-year balance sheet figure
reported in column (B). Give the end-of-year
figures for any receivables or depreciable
assets and the related allowances for
doubtful accounts or accumulated
depreciation reported within the description
column.

Line 45. Cash —
Non-Interest-Bearing
Enter the total of non-interest-bearing
checking accounts, deposits in transit,
change funds, petty cash funds, or any other
non-interest-bearing account. Do not include
advances to employees or officers or
refundable deposits paid to suppliers or
others.

Line 46. Savings And Temporary
Cash Investments
Enter the total of interest-bearing checking
accounts, savings and temporary cash
investments, such as money market funds,
commercial paper, certificates of deposit,
and U.S. Treasury bills or other
governmental obligations that mature in less
than 1 year. Report the income from these
investments on line 4.

Line 47. Accounts Receivable

• Section 501(c)(3) and (4) organizations,
and section 4947(a)(1) nonexempt
charitable trusts, however, must show the
expenses attributable to their program
services.

Enter the total accounts receivable (reduced
by the allowance for doubtful accounts) from
the sale of goods and/or the performance of
services. Report claims against vendors or
refundable deposits with suppliers or others
here, if not significant in amount. Otherwise,
report them on line 58, Other assets. Report
any receivables due from officers, directors,
trustees, or key employees on line 50.
Report receivables (including loans and
advances) due from other employees on line
51a.

The organization may show the amount
of any donated services, or use of
materials, equipment, or facilities it
received or utilized in connection with a
specific program service.

Enter the total pledges receivable recorded
as of the beginning and end of the year. Do
not include the amount of pledges estimated
to be uncollectible.

Attach a schedule that lists the
organization’s other program services.
• The detailed information required for the
four largest services is not necessary for
this schedule.

5

• Do not include these amounts in the
expense column in Part III.

Action

• Describe program service
accomplishments through measurements
such as clients served, days of care,
therapy sessions, or publications issued.

Line 44. Total Functional Expenses

• Disclose the applicable amounts of any
donated services, etc., on the lines for the
narrative description of the appropriate
program service.

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Line 48a. Pledges Receivable

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Line 49. Grants Receivable
Enter the total grants receivable from
governmental agencies, foundations, and
other organizations as of the beginning and
end of the year. Organizations that follow
SFAS 116 may report the present value of
the grants receivable as of each balance
sheet date.

Line 50a. Receivables From
Current and Former Officers,
Directors, Trustees, And Key
Employees
Report all receivables due from current and
former officers, directors, trustees, and key
employees, and all secured and unsecured
loans to such persons, on line 50a and in an
attached schedule discussed below. Report
interest from such receivables on line 11.
For a definition of key employee, see the
instructions in Part V-A.
In the required schedule, report each
receivable separately even if more than one
loan was made to the same person or the
same terms apply to all loans. Report salary
advances, and other advances for the
personal use and benefit of the recipient,
and receivables subject to special terms, or
arising from nontypical transactions, as
separate loans for each current and former
officer, director, trustee, and key employee.
For credit unions, report only loans, or
receivables that are not made on the same
terms as all other members of the
organization.
Schedule format. For each outstanding
loan, or other receivable that must be
reported separately, the attached schedule
should show the following information
(preferably in columnar form):
1. Borrower’s name and title,
2. Original amount,
3. Balance due,
4. Date of note,
5. Maturity date,
6. Repayment terms,
7. Interest rate,
8. Security provided by the borrower,
9. Purpose of the loan, and
10. Description and fair market value of
the consideration furnished by the lender
(for example, cash — $1,000; or 100 shares
of XYZ, Inc., common stock — $9,000).

Line 50b. Receivables From Other
Disqualified Persons
Report all receivables due from disqualified
persons (as defined under section
4958(f)(1)) and persons described in section
4958(c)(3)(B) for the year on line 50b and in
a required attached schedule. Do not
include on line 50b, amounts reported on
line 50a.
For a definition of disqualified persons,
see Disqualified Person under General
Instruction P, earlier.
Report each receivable separately even
if more than one loan was made to the same
person or the same terms apply to all loans.
Report advances for the personal use and
benefit of the recipient, and receivables
subject to special terms, or arising from
nontypical transactions, as separate loans
for each disqualified person that is not a
current or former officer, director, trustee, or
key employee. For credit unions, report only
loans, or receivables that are not made on

the same terms as all other members of the
organization.
Schedule format. For each outstanding
loan, or other receivable that must be
reported separately, the attached schedule
should show the following information
(preferably in columnar form):
1. Borrower’s name and title,
2. Original amount,
3. Balance due,
4. Date of note,
5. Maturity date,
6. Repayment terms,
7. Interest rate,
8. Security provided by the borrower,
9. Purpose of the loan, and
10. Description and fair market value of
the consideration furnished by the lender
(for example, cash — $1,000; or 100 shares
of XYZ, Inc., common stock — $9,000).

Line 51. Other Notes and Loans
Receivable
Line 51a. Enter on line 51a the combined
total of receivables (both notes and loans) to
non-key employees. Do not include the
following on line 51a.
• Receivables reported on line 50.
• Program-related investments. (Report
program-related investments on line 58.)
• Notes receivable acquired as investments
(report receivables acquired as investments
on line 56).
For notes and loans that represent
program-related investments (defined in the
line 2 instructions), report the interest
income on line 2. For all other notes and
loans receivable included on line 51, report
the income on line 11.
Line 51b. Enter on line 51b the total
amount of doubtful accounts.
Notes receivable. Enter the amount of
all notes receivable not listed on line 50 and
not acquired as investments. Attach a
schedule similar to that requested in the
instructions for line 50. The schedule should
also describe the family or business
relationship of the borrower to any officer,
director, trustee, key employee, or
substantial contributor of the organization.
Notes receivable from loans by a credit
union to its members and scholarship loans
by a section 501(c)(3) organization do not
have to be itemized. However, identify these
loans as such on a schedule and indicate
the total amount of such loans that are
outstanding.
For a note receivable from another
organization exempt under the same
paragraph of section 501(c) as the filing
organization, list only the name of the
borrower and the balance due. For example,
a section 501(c)(3) organization would have
to provide the full details of a loan to a
section 501(c)(4) organization but would
have to provide only the name of the
borrower and the balance due on a note
from a loan to another section 501(c)(3)
organization.
Loans receivable. Enter the gross
amount of loans receivable, less the
allowance for doubtful accounts, from the
normal activities of the filing organization
such as loans by a credit union to its
members or scholarship loans by a section

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501(c)(3) organization. A schedule of these
loans is not required.
Report loans to current and former
officers, directors, trustees, and key
employees on line 50. Report loans to
non-key employees, vendors, suppliers, and
independent contractors on line 51. Attach a
schedule similar to that called for in the
instructions for line 50. The schedule should
also describe the family or business
relationship, if any, between the borrower
and any officer, director, trustee, key
employee, or substantial contributor of the
organization as defined in section
507(d)(2)(A).
Family relationships include an
individual’s spouse, ancestors, children,
grandchildren, great-grandchildren, siblings
(whether by whole or half blood), and the
spouses of children, grandchildren,
great-grandchildren, and siblings.
Business relationships are
employment and contractual relationships,
and common ownership of a business
where any officers, directors, or trustees,
individually or together, possess more than
a 35% ownership interest in common.
Ownership is voting power in a corporation,
profits interest in a partnership, or beneficial
interest in a trust.
Report program related investments

TIP on line 58.

Line 52. Inventories For Sale Or
Use
Enter the amount of materials, goods, and
supplies purchased, manufactured by the
organization, or donated and held for future
sale or use.

Line 53. Prepaid Expenses And
Deferred Charges
Enter the amount of short-term and
long-term prepayments of expenses
attributable to one or more future accounting
periods. Examples include prepayments of
rent, insurance, and pension costs, and
expenses incurred for a solicitation
campaign of a future accounting period.

Line 54a. Investments —
Publicly-Traded Securities
Enter the book value, which may be market
value, of securities held as investments.
Check the appropriate box to indicate
whether the securities are reported at cost
or fair market value. Publicly traded
securities include common and preferred
stocks, bonds (including governmental
obligations such as bonds and Treasury
bills), and mutual fund shares that are listed
and regularly traded in an over-the-counter
market or on an established exchange and
for which market quotations are published or
otherwise readily available.
Do not report stock holdings that
represent 5% or more of the outstanding
shares of stock of the same class. Instead,
report them on line 54b. Report dividends
and interest from these securities on line 5
of Part I, Revenue.

Line 54b. Investments —Other
Securities
Enter the book value, which may be market
value, of securities held as investments that

Specific Instructions for Form 990

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are not publicly traded or that represent 5%
or more of the outstanding shares of the
same class. Check the appropriate box to
indicate whether the securities are reported
at cost or fair market value. When valuing
securities at fair market value, use
commonly accepted valuation methods.
(See Regulations section 20.2031-2.)
Attach a schedule that lists the securities
held at the end of the year. Indicate whether
the securities are listed at cost (including the
value recorded at the time of receipt in the
case of donated securities) or end-of-year
market value. Do not include amounts
reported on line 46.
Securities not publicly traded. Securities
that are not publicly traded include
investments such as stock in a closely held
company whose stock is not available for
sale to the general public or which is not
widely traded.
Attached schedule. On the attached
schedule, give the following information for
each security.
• Description, including the security name
and the number of shares held.
• Book value.
• The valuation method that was used (cost
or end-of-year market value).

Line 55. Investments —Land,
Buildings, and Equipment
Enter the book value (cost or other basis
less accumulated depreciation) of all land,
buildings, and equipment held for
investment purposes, such as rental
properties. Attach a schedule listing these
fixed assets held as investments at the end
of the year. Show for each item or category
listed, the cost or other basis, accumulated
depreciation, and book value. Report the
income from these assets on line 6a.

Line 56. Investments —Other
Enter the amount of all other investment
holdings not reported on line 54a, 54b, or
55. Attach a schedule, listing and describing
each of these investments held at the end of
the year. Show the book value for each and
indicate whether the investment is listed at
cost or end-of-year market value. Report the
income from these assets on line 7. Do not
include program-related investments. See
the instructions for line 58.

Line 57. Land, Buildings, and
Equipment
Enter the book value (cost or other basis
less accumulated depreciation) of all land,
buildings, and equipment owned by the
organization and not held for investment.
This includes any property, plant, and
equipment owned and used by the
organization in conducting its exempt
activities. Attach a schedule listing these
fixed assets held at the end of the year and
showing, for each item or category listed,
the cost or other basis, accumulated
depreciation, and book value.

Line 58. Other Assets, Including
Program-Related Investments
List and show the book value of each
category of assets not reportable on lines 45
through 57. If more space is needed, attach
a schedule (see Attachment under General
Instruction X) and enter the total book value
of all categories of other assets on line 58.

Specific Instructions for Form 990

For interest earned on notes and loans that
represent program related investments,
report income on line 2.
One type of asset reportable on line 58 is
program-related investments. These are
investments made primarily to accomplish
an exempt purpose of the filing organization
rather than to produce income.

Line 59. Total Assets
Enter the total of lines 45 through 58. The
amounts on line 59 must equal the amounts
on line 74 for both the beginning and end of
the year.

Line 60. Accounts Payable and
Accrued Expenses
Enter the total of accounts payable to
suppliers and others and accrued expenses,
such as salaries payable, accrued payroll
taxes, and interest payable.

Line 61. Grants Payable
Enter the unpaid portion of grants and
awards that the organization has made a
commitment to pay other organizations or
individuals, whether or not the commitments
have been communicated to the grantees.

Line 62. Deferred Revenue
Include revenue that the organization has
received but not yet earned as of the
balance sheet date under its method of
accounting.

Line 63. Loans From Officers,
Directors, Trustees, and Key
Employees
Enter the unpaid balance of loans received
from current and former officers, directors,
trustees, and key employees. See the
instructions for Part V-A for the definition of
key employee. For loans outstanding at the
end of the year, attach a schedule that
shows, for each loan, the name and title of
the lender and the information specified in
items 2 through 10 of the instructions for line
50a.

Line 64a. Tax-Exempt Bond
Liabilities
Enter the amount of tax-exempt bonds (or
other obligations) issued by the organization
on behalf of a state or local governmental
unit, or by a state or local governmental unit
on behalf of the organization, and for which
the organization has a direct or indirect
liability. Tax-exempt bonds include state or
local bonds and any obligations, including
direct borrowing from a lender, or
certificates of participation, the interest on
which is excluded from the income of the
recipient for federal income tax purposes
under section 103.
For all such bonds and obligations
outstanding at any time during the year,
attach a schedule showing for each
separate issue: (a) the purpose of the issue;
(b) the amount of the issue outstanding; and
(c) the unexpended bond proceeds, if any.
Also indicate whether any portion of any
bond-financed facility was used by a third
party (other than a governmental unit or
section 501(c)(3) organization), and, if so,
state the percentage of space used by the
third party.
If the tax-exempt bond or obligation is in
the form of a mortgage, include the amount
of the mortgage on line 64a, and not on line

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64b. For such mortgage, include in the
above listing, the maturity date of the debt,
repayment terms, interest rate, and any
security provided by the organization.
Line 64a does not, however, refer to
situations where the organization only has a
contingent liability, as it would if it were a
guarantor of tax-exempt bonds issued by a
related entity. Contingent liabilities, such as
those that arise from guarantees, must be
included as an entry in the separately
attached schedule required for line 64a (but
not on line 64a itself).

Line 64b. Mortgages and Other
Notes Payable
Enter the amount of mortgages and other
notes payable at the beginning and end of
the year. Attach a schedule showing, as of
the end of the year, the total amount of all
mortgages payable and, for each
nonmortgage note payable, the name of the
lender and the other information specified in
items 2 through 10 of the instructions for line
50a. The schedule should also identify the
relationship of the lender to any officer,
director, trustee, or key employee of the
organization.

Line 65. Other Liabilities
List and show the amount of each liability
not reportable on lines 60 through 65. Attach
a separate schedule if more space is
needed.

Lines 67 through 69. Net Assets
The Financial Accounting Standards Board
issued Financial Statements of Not-for-Profit
Organizations (SFAS 117). SFAS 117
provides standards for external financial
statements certified by an independent
accountant for certain types of nonprofit
organizations. SFAS 117 does not apply to
credit unions, voluntary employees’
beneficiary associations, supplemental
unemployment benefit trusts, section
501(c)(12) cooperatives, and other member
benefit or mutual benefit organizations.
While some states may require reporting
in accordance with SFAS 117, the IRS does
not (see General Instruction E). However, a
Form 990, or Form 990-EZ, return prepared
in accordance with SFAS 117 will be
acceptable to the IRS.
Organizations that follow SFAS 117. If
the organization follows SFAS 117, check
the box above line 67. Classify and report
net assets in three groups — unrestricted,
temporarily restricted, and permanently
restricted — based on the existence or
absence of donor-imposed restrictions and
the nature of those restrictions. Show the
sum of the three classes of net assets on
line 73. On line 74, add the amounts on
lines 66 and 73 to show total liabilities and
net assets. This figure should be the same
as the figure for Total assets on line 59.

Line 67. Unrestricted
Enter the balances per books of the
unrestricted class of net assets. Unrestricted
net assets are neither permanently
restricted nor temporarily restricted by
donor-imposed stipulations. All funds
without donor-imposed restrictions must be
classified as unrestricted, regardless of the
existence of any board designations or
appropriations.

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Line 68. Temporarily Restricted
Enter the balance per books for the
temporarily restricted class of net assets.
Donors’ temporary restrictions may require
that resources be used in a later period or
after a specified date (time restrictions), or
that resources be used for a specified
purpose (purpose restrictions), or both.

Line 69. Permanently Restricted
Enter the total of the balances for the
permanently restricted class of net assets.
Permanently restricted net assets are (a)
assets, such as land or works of art,
donated with stipulations that they be used
for a specified purpose, be preserved, and
not be sold or (b) assets donated with
stipulations that they be invested to provide
a permanent source of income. The latter
result from gifts and bequests that create
permanent endowment funds.
Organizations that do not follow SFAS
117. If the organization does not follow
SFAS 117, check the box above line 70 and
report account balances on lines 70 through
72. Report net assets or fund balances on
line 73. Complete line 74 to report the sum
of the total liabilities and net assets.
Some states that accept Form 990, or
Form 990-EZ, as their basic reporting form
may require a separate statement of
changes in net assets/fund balances. See
General Instruction E.

Line 70. Capital Stock, Trust
Principal, or Current Funds
For corporations, enter the balance per
books for capital stock accounts. Show par
or stated value (or for stock with no par or
stated value, total amount received upon
issuance) of all classes of stock issued and,
as yet, uncancelled. For trusts, enter the
amount in the trust principal or corpus
account. For organizations continuing to use
the fund method of accounting, enter the
fund balances for the organization’s current
restricted and unrestricted funds.

Line 71. Paid-In or Capital Surplus,
or Land, Bldg., and Equipment
Fund
Enter the balance per books for all paid-in
capital in excess of par or stated value for all
stock issued and uncancelled. If
stockholders or others gave donations that
the organization records as paid-in capital,
include them here. Report any current-year
donations the organization included on line
71 in Part I, line 1. Enter the fund balance
for the land, building, and equipment fund
on this line.

Line 72. Retained Earnings or
Accumulated Income, Endowment,
or Other Funds
For corporations, enter the balance in the
retained earnings, or similar account, minus
the cost of any corporate treasury stock. For
trusts, enter the balance per books in the
accumulated income or similar account. For
those organizations using fund accounting,
enter the total of the fund balances for the
permanent and term endowment funds as
well as balances of any other funds not
reported on lines 70 and 71.

Line 73. Total Net Assets or Fund
Balances
For organizations that follow SFAS 117,
enter the total of lines 67 through 69. For all
other organizations, enter the total of lines
70 through 72. Enter the
beginning-of-the-year figure on line 73,
column (A), in Part I, line 19. The
end-of-the-year figure on line 73, column (B)
must agree with the figure on line 21 of Part
I.

Line 74. Total Liabilities and Net
Assets/Fund Balances
Enter the total of lines 66 and 73. This
amount must equal the amount for total
assets reported on line 59 for both the
beginning and end of the year.

Parts IV-A and IV-B—
Reconciliation Statements
Use these reconciliation statements to
reconcile the differences between the
revenue and expenses shown on the
organization’s audited financial statements
prepared in accordance with SFAS 117 and
the revenue and expenses shown on the
organization’s Form 990.
If the organization did not receive an
audited financial statement for 2006 (or the
fiscal year for which it is completing this
Form 990) and prepared the return in
accordance with SFAS 117, it does not need
to complete Parts IV-A or IV-B and should
instead enter “N/A” on line a of each Part.
These two Parts do not have to be
completed on group returns.
On line d1 of Parts IV-A and IV-B,
include only those investment expenses
netted against investment income in the
revenue portion of the organization’s audited
financial statements. Do not include
program-related investment expenses or
other expenses reported as program service
expenses in the audited statement of
activities.

Give the preferred address at which
officers, directors, etc., want the Internal
Revenue Service to contact them.
Use an attachment if there are more
persons to list in Part V-A.
Show all forms of cash and noncash
compensation received by each listed
officer, directors, etc., whether paid currently
or deferred.
If the organization pays any other
person, such as a management services
company, for the services provided by any
of its officers, directors, trustees, or key
employees, report the compensation and
other items in Part V-A as if the organization
had paid the officers, directors, etc., directly.
Also see Ann. 2001-33, 2001-17 I.R.B.
1137.
A failure to fully complete Part V-A can
subject both the organization and the
individuals responsible for such failure to
penalties for filing an incomplete return. See
General Instruction K. In particular, entering
the phrase on Part V-A, “Information
available upon request,” or a similar phrase,
is not acceptable.
The organization may also provide an
attachment to explain the entire 2006
compensation package for any person listed
in Part V-A.
Each person listed in Part V-A should
report the listed compensation on his or her
income tax return unless the Code
specifically excludes any of the payments
from income tax. See Pub. 525 for details.
Key employee. A key employee is any
person having responsibilities, powers, or
influence similar to those of officers,
directors, or trustees. The term includes the
chief management and administrative
officials of an organization (such as an
executive director or chancellor).
A chief financial officer and the officer in
charge of the administration or program
operations are both key employees if they
have the authority to control the
organization’s activities, its finances, or
both.

Column (A)

Part V-A — Current Officers,
Directors, Trustees, and Key
Employees
List each person who was a current officer,
director, trustee, or key employee (defined
below) of the organization or disregarded
entity described in Regulations sections
301.7701-1 through 301.7701-3 at any time
during the year even if they did not receive
any compensation from the organization.
For purposes of reporting all amounts in
columns (B) through (E) in Part V-A, either
use the organizations tax year, or the
calendar year ending within such tax year.
Enter a zero in columns (B), (C), (D), or
(E) if no hours were entered in column (B)
and no compensation, contributions,
expenses and other allowances were paid
during the reporting period, or deferred for
payment to a future reporting period.
Aid in the processing of the
organization’s return by grouping together,
preferably at the end of its list, those who
received no compensation. Be careful not to
repeat names.

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Report the name and address of each
person who was a current officer, director,
trustee, or key employee (defined above),
during the tax year or, if using the calendar
year, at any time during the calendar year or
tax year.

Column (B)
In column (B), a numerical estimate of the
average hours per week devoted to the
position is required for a complete answer.
Statements such as “as needed,” “as
required,” or “40+” are unacceptable.

Column (C)
For each person listed, report salary, fees,
bonuses, and severance payments paid.
Include current-year payments of amounts
reported or reportable as deferred
compensation in any prior reporting period.

Column (D)
Include in this column all forms of deferred
compensation and future severance
payments (whether or not funded; whether
or not vested; and whether or not the
deferred compensation plan is a qualified
plan under section 401(a)). Include also

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payments to welfare benefit plans on behalf
of the officers, directors, etc. Such plans
provide benefits such as medical, dental, life
insurance, severance pay, disability, etc.
Reasonable estimates may be used if
precise cost figures are not readily available.
Unless the amounts were reported in
column (C), report, as deferred
compensation in column (D), salaries and
other compensation earned during the
reporting period, but not yet paid by the date
the organization files its return.

Column (E)
Enter both taxable and nontaxable fringe
benefits (other than de minimis fringe
benefits described in section 132(e)).
Include expense allowances or
reimbursements that the recipients must
report as income on their separate income
tax returns. Examples include amounts for
which the recipient did not account to the
organization or allowances that were more
than the payee spent on serving the
organization. Include payments made under
indemnification arrangements, the value of
the personal use of housing, automobiles, or
other assets owned or leased by the
organization (or provided for the
organization’s use without charge), as well
as any other taxable and nontaxable fringe
benefits. See Pub. 525 for more information.

Line 75b. Business Relationships
For a definition of family and business
relationships, see line 51 of these
instructions.

Line 75c. Compensation from
Related Organizations
Answer “Yes,” to this question if any of the
organization’s listed officers, directors,
trustees, key employees, highest
compensated employees, or highest
compensated professional or other
independent contractors received aggregate
compensation amounts of $50,000 or more
from the organization and all related
organizations (as defined below). For this
purpose, compensation includes any
amount that would be reportable in columns
(C), (D), and (E) of Form 990, Part V-A, if
provided by the organization.
Required attachment. If the organization
answered “Yes,” it must attach a schedule
that lists, for each officer, director, trustee,
key employee, highest compensated
employee, or highest compensated
professional or other independent
contractor, the information requested in 1
and 2, below.
1. For Relationships 1 through 6,
provide:
a. The name of the officer, director, etc.,
receiving compensation from a related
organization or organizations;
b. The name and EIN of each related
organization that provided the
compensation;
c. A description of the relationship
between the organization and the related
organization(s); and
d. The amount of compensation each
related organization provided. Use the same
format as required by columns (C) through
(E) of Part V-A.
2. If the organizations are related only
by Relationship 7 and/or Relationship 8, or if

Specific Instructions for Form 990

the Volunteer exception to Relationship 2
applies, report the following information, but
do not report compensation paid by the
related organization(s).
a. The name of the officer, director, etc.,
receiving compensation from a related
organization(s);
b. The name and EIN of each related
organization that provided such
compensation; and
c. A description of the relationship
between the organization and the related
organization(s).
Reporting compensation. Report
compensation paid by a related organization
for only that time period during which a
relationship existed between the
organization and the related organization.
Report compensation paid by a related
organization in the same period (either
calendar or fiscal year) as the organization
reports compensation it paid.
Definition of related organization.
Organizations may be related in several
ways; the relationships are not mutually
exclusive. Related organizations are
tax-exempt or taxable organizations related
to the tax-exempt organization in one or
more of the following ways.
• Relationship 1. One organization owns
or controls the other organization.
• Relationship 2. The same person(s)
owns or controls both organizations.
• Relationship 3. The organizations have a
relationship as supporting and supported
organizations under section 509(a)(3) (see
Example 1, later).
• Relationship 4. The organizations use a
common paymaster. For a definition of
common paymaster and illustrated
examples, see Regulations section
31.3121(s)-1(b).
• Relationship 5. The other organization
pays part of the compensation that the
organization would otherwise be
contractually obligated to pay (see Example
2, later).
• Relationship 6. The organizations are
partners in a partnership or members in an
LLC or other joint venture (other than a
publicly traded partnership as defined in
section 7704(b)).
• Relationship 7. The organizations
conduct joint programs or share facilities or
employees.
• Relationship 8. One or more persons
exercise substantial influence over both
organizations (see Example 3, later). For
purposes of this relationship, to determine if
a person exercises substantial influence
over an organization, use the rules stated in
section 4958(f)(1) and Regulations section
53.4958-3 (treating the organization as
though it were an applicable tax-exempt
organization under section 4958(e)).
Substantial influence. The following
persons are considered to exercise
substantial influence over the organization:
1. The organization’s directors, trustees,
chief executive officer, and chief financial
officer (see Regulations section
53.4958-3(c)),
2. Certain family members (defined as
disqualified persons under section
4958(f)(1)(B)) of disqualified individuals, and

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3. Certain 35% controlled entities
(defined as disqualified persons under
section 4958(f)(1)(C)).
Ownership. The term ownership is
holding (directly or indirectly) 50% or more
of the voting power in a corporation, profits
interest in a partnership, or beneficial
interest in a trust.
Control. The term control is having 50%
or more of the voting power in a governing
body, or the power to appoint 50% or more
of an organization’s governing body, or the
power to approve an organization’s budgets
or expenditures (an effective veto power
over the organization’s budgets and
expenditures). Also, control can be indirect
by owning or controlling another
organization with such power.
The term governing body is defined by
the relevant state law. Generally, the
governing body of a corporation is its board
of directors and the governing body of a
trust is its board of trustees.
Reporting exceptions. The following
exceptions apply:
• Bank or financial institution trustee
exception. If the organization and the other
organization are related only because they
are both controlled or substantially
influenced by a common trustee that is a
bank or financial institution, the organization
does not need to report either the
relationship or the trustee’s compensation
from the related organization.
• Common independent contractor
exception. If an independent contractor
listed in Schedule A, Part II-A or II-B does
not exercise substantial influence, as
defined above, over either the organization
or the related organization, the organization
does not need to report either the
relationship or the independent contractor’s
compensation from the related organization.
However, this exception does not apply to a
management services company that
performs for the organization functions
similar to those of president, chief executive
officer, chief operating officer, treasurer or
chief financial officer. Compensation paid by
a related organization to such a
management company must be reported by
the organization unless another exception
applies. See Examples 5 and 6 later.
• Volunteer exception. If Relationship 2 is
met only because the same individuals
control both the tax-exempt organization
and a for-profit organization that is not
owned or controlled directly or indirectly by
one or more tax-exempt organizations, and
none of the Relationships described in 1 or
3 through 6 are met, then the tax-exempt
organization does not have to report the
compensation from the for-profit
organization of any persons serving the
tax-exempt organization as a volunteer
without compensation (see Example 4,
later).
Providing information on

TIP compensation received from related
organizations does not violate the
disclosure provisions of section 7216(a).
See also section 6033(a)(1).
Examples illustrating relationships.
Example 1. X, a hospital auxiliary,
raises funds for Hospital Y. Z, another
hospital auxiliary, coordinates the efforts of
Hospital Y’s volunteer staff. Both X and Z

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are supporting organizations of Hospital Y
and are considered related organizations to
Hospital Y. Hospital Y is also considered a
supported organization of the auxiliaries.
Hospital Y must report (in an attachment
to line 75c) the compensation, if any, paid
by each of the auxiliaries to the officers,
directors, trustees, or key employees listed
in the hospital’s Form 990, Part V-A, or
highest-compensated employees listed in
the hospital’s Schedule A, Part I, or
highest-compensated professional or other
independent contractors listed in the
hospital’s Schedule A, Part II-A or II-B. Both
X and Z must report (in an attachment to
line 75c) the compensation, if any, paid by
Hospital Y to an officer, director, etc., of the
auxiliary.
Example 2. Bob, a key employee of
Organization B, a 501(c)(4) social welfare
organization, conducts fundraising among
Organization B’s members, with the
proceeds going to Organization A, a
501(c)(3) public charity, to carry out disaster
relief. The Chief Executive Officers (CEOs)
of Organizations A and B agree that
Organization A will pay a portion of Bob’s
salary for a period of time in recognition of
Bob’s role in the fundraising assistance of
Organization B. Because Organization A is
paying to Bob a portion of Bob’s
compensation that Organization B would
otherwise be contractually committed to pay,
Organizations A and B are related
organizations for Form 990 reporting
purposes. Organization B must report the
payment from Organization A to Bob in an
attachment to line 75c.
Example 3. Tom is a trustee of
Organization A, a tax-exempt organization,
and the CEO of Organization B, a for-profit
taxable organization wholly owned by Tom.
Tom is considered to exercise substantial
influence over both organizations. So,
Relationship 8 is met. If no other relationship
is met, then Tom’s compensation from
Organization B is not reported in an
attachment to line 75c of Organization A’s
Form 990, however Organization A is
required to report the name and EIN of
Organization B, and a description of the
relationship between the two organizations
in the line 75c attachment.
Example 4. The facts are the same as in
Example 3, except that Tom is the sole
trustee of both organizations. So,
Organizations A and B are related under
Relationship 2 because they are controlled
by the same person. In this situation, Tom’s
compensation from Organization B (as well
as the name and EIN of Organization B, and
a description of the relationship between the
two organizations) is reported in an
attachment to line 75c of Organization A’s
Form 990.
However, if Tom serves Organization A
without compensation and none of the other
relationships described in 1 or 3 through 6
are met, then because of the Volunteer
exception, Tom’s compensation from
Organization B is not reported by
Organization A. However, the relationship
between Organization A and Organization B
must be reported.
Example 5. Organization A is filing its
Form 990. Organization B is a taxable
subsidiary of Organization A; so,

Organizations A and B are related under
Relationship 1 because A controls B.
Organization A contracts with Company
Y for janitorial services. Company Y is listed
as one of Organization A’s
highest-compensated independent
contractors. Organization B also contracts
with Company Y for janitorial services.
Company Y is not a 35% controlled entity of
a disqualified person for organization A or
Organization B. So, Company Y is listed in
Organization A’s Schedule A, Part II-B, and
Company Y also receives compensation
from Organization B, which is related to
Organization A.
However, Company Y meets the
requirements of the Common independent
contractor exception, earlier. Company Y is
not considered to exercise substantial
influence over either Organization A or
Organization B if they were applicable
tax-exempt organizations within the
meaning of section 4958(e). Because of the
Common independent contractor exception
earlier, the relationship between Company Y
and Organization B, and Company Y’s
compensation from Organization B for such
janitorial services is not reported by
Organization A.
None of Organization A’s officers,
directors, etc., receive compensation from
Organization B. In conclusion, Organization
A does not report its relationship with
Organization B in an attachment to line 75c,
and Organization A answers “No” on line
75c.
Example 6. The facts are the same as in
Example 5, except that one of Organization
A’s officers, Sue, receives compensation
from Organization B. Organization A must
report in an attachment to line 75c its
relationship with Organization B, and Sue’s
compensation from Organization B for
services provided to Organization B. Even
though Organization A must report Sue’s
compensation from Organization B,
Organization A does not report Company
Y’s compensation from Organization B
because of the Common independent
contractor exception.

Part V-B. Former Officers,
Directors, Trustees, and Key
Employees That Received
Compensation or Other
Benefits
List each former officer, director, trustee,
and key employee (as defined in Part V-A)
of the organization or disregarded entity
described in Regulations sections
301.7701-1 through 301.7701-3 that
received compensation or other benefits
during the reporting year.
For purposes of reporting all amounts in
columns (B) through (E) in Part V-B, either
use the organization’s tax year, or the
calendar year ending within such tax year.
Give the preferred address at which
these former officers, directors, etc., want
the Internal Revenue Service to contact
them.
Use an attachment if there are more
persons to list in Part V-B.
Show all forms of cash and noncash
compensation or benefits received by each

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listed former officer, director, etc., whether
paid currently or deferred.
If the organization pays any other
person, such as a management services
company, for the services provided by any
of its former officers, directors, trustees, or
key employees, report the compensation
and other items in Part V-A as if the
organization had paid the former officers,
directors, etc., directly.
A failure to fully complete Part V-B can
subject both the organization and the
individuals responsible for such failure to
penalties for filing an incomplete return. See
General Instruction K. In particular, entering
the phrase on Part V-B, “Information
available upon request,” or a similar phrase,
is not acceptable.
The organization may also provide an
attachment to explain the entire 2006
compensation package for any person listed
in Part V-B.
Each person listed in Part V-B should
report the listed compensation on his or her
income tax return unless the Code
specifically excludes any of the payments
from income tax. See Pub. 525 for details.

Column (A)
Report the name and address of each
person who was a former officer, director,
trustee, or key employee (defined in Part
V-A) at any time during the calendar year.

Column (B)
In column (B), report all secured and
unsecured loans and salary advances to
former officers, directors, trustees and key
employees.

Column (C)
For each person listed, report salary, fees,
bonuses, and severance payments paid.
Include current-year payments of amounts
reported or reportable as deferred
compensation in any prior year.

Column (D)
Include in this column all forms of deferred
compensation and future severance
payments (whether or not funded; whether
or not vested; and whether or not the
deferred compensation plan is a qualified
plan under section 401(a)). Include also
payments to welfare benefit plans on behalf
of the officers, directors, etc. Such plans
provide benefits such as medical, dental, life
insurance, severance pay, disability, etc.
Reasonable estimates may be used if
precise cost figures are not readily available.
Unless the amounts were reported in
column (C), report, as deferred
compensation in column (D), salaries and
other compensation earned during the
period covered by the return, but not yet
paid by the date the organization files its
return.

Column (E)
Enter both taxable and nontaxable fringe
benefits (other than de minimis fringe
benefits described in section 132(e)).
Include expense allowances or
reimbursements that the recipients must
report as income on their separate income
tax returns. Examples include amounts for
which the recipient did not account to the
organization or allowances that were more
than the payee spent on serving the

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organization. Include payments made under
indemnification arrangements, the value of
the personal use of housing, automobiles, or
other assets owned or leased by the
organization (or provided for the
organization’s use without charge), as well
as any other taxable and nontaxable fringe
benefits. See Pub. 525 for more information.

Part VI—Other Information

• Section 501(c)(3) organizations and

section 4947(a)(1) nonexempt charitable
trusts must also complete and attach a
Schedule A (Form 990 or 990-EZ) to their
Form 990 or Form 990-EZ. See General
Instruction D for information on Schedule A
(Form 990 or 990-EZ).
• Answer “Yes,” or “No,” to each applicable
question.

Line 76. Change in Activities
Attach a statement to explain any changes
during the past three years in the activities
the organization conducts to further its
exempt purpose, or in the methods of
conducting these activities. However, if a
change has been reported to the IRS on a
previously filed attachment, do not report the
change again. An activity previously listed
as current or planned in the organization’s
application for recognition of exemption
does not have to be reported unless the
method of conducting such activity has
changed. Also, include any major program
activities that are being discontinued.

Line 77. Changes In Organizing or
Governing Documents
Attach a conformed copy of any changes to
the articles of incorporation, or association,
constitution, trust instrument, or other
organizing document, or to the bylaws or
other governing document.
A conformed copy is one that agrees
with the original document and all
amendments to it. If the copies are not
signed, they must be accompanied by a
written declaration signed by an officer
authorized to sign for the organization,
certifying that they are complete and
accurate copies of the original documents.
Photocopies of articles of incorporation
showing the certification of an appropriate
state official do not have to be accompanied
by such a declaration. See Rev. Proc.
68-14, 1968-1 C.B. 768, for details. When a
number of changes are made, attach a copy
of the entire revised organizing instrument
or governing document.
However, if the exempt organization
changes its legal structure, such as from a
trust to a corporation, it must file a new
exemption application to establish that the
new legal entity qualifies for exemption.

Line 78. Unrelated Business
Income
Political organizations described in section
527 are not required to answer this
question.
Check “Yes” on line 78a if the
organization’s total gross income from all of
its unrelated trades and businesses is
$1,000 or more for the year. Gross income
is the amount of gross receipts less the cost
of goods sold. See Pub. 598 for a
description of unrelated business income

Specific Instructions for Form 990

and the Form 990-T filing requirements for
section 501(c), (e), (f), (k), and (n)
organizations having such income.
Form 990-T is not a substitute for Form
990. Report on Form 990, or Form 990-EZ,
items of income and expense that are also
reported on Form 990-T when the
organization is required to file both forms.
All tax-exempt organizations must
pay estimated taxes with respect to
CAUTION their unrelated business income if
they expect their tax liability to be $500 or
more. Use Form 990-W to compute this tax.

!

Line 79. Liquidation, Dissolution,
Termination, or Substantial
Contraction
For a complete liquidation of a corporation
or termination of a trust, check the Final
return box in the heading on page 1 of the
form. If there was a liquidation, dissolution,
termination, or substantial contraction,
attach a statement explaining what took
place.
On the attached statement, show
whether the assets have been distributed
and the date of distribution. Also attach a
certified copy of any resolution, or plan of
liquidation or termination, etc., with all
amendments or supplements not already
filed. In addition, attach a schedule listing
the names and addresses of all persons
who received the assets distributed in
liquidation or termination, the kinds of assets
distributed to each one, and each asset’s
fair market value.
A substantial contraction is a partial
liquidation or other major disposition of
assets except transfers for full consideration
or distributions from current income.
A major disposition of assets is any
disposition for the tax year that is:
1. At least 25% of the fair market value
of the organization’s net assets at the
beginning of the tax year; or
2. One of a series of related dispositions
begun in earlier years that add up to at least
25% of the net assets the organization had
at the beginning of the tax year when the
first disposition in the series was made.
Whether a major disposition of assets took
place through a series of related
dispositions depends on the facts in each
case.
See Regulations section 1.6043-3 for
special rules and exceptions.

Line 80. Relation To Other
Organizations
Answer “Yes” if most (more than 50%) of the
organization’s governing body, officers,
directors, trustees, or membership are also
officers, directors, trustees, or members of
any other organization.
Disregard any coincidental overlap of
membership with another organization; that
is, when membership in one organization is
not a condition of membership in another
organization. For example, assume that a
majority of the members of a section
501(c)(4) civic organization also belong to a
local chamber of commerce described in
section 501(c)(6). The civic organization
should answer “No” on line 80a if it does not
require its members to belong to the
chamber of commerce.

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Also, disregard affiliation with any
statewide or nationwide organization. Thus,
the civic organization in the above example
would still answer “No” on line 80a even if it
belonged to a state or national federation of
similar organizations. A local labor union
whose members are also members of a
national labor organization would answer
“No” on line 80a.

Line 81. Expenditures For Political
Purposes

!

CAUTION

Political organizations described in
section 527 are not required to
answer this question.

A political expenditure is one intended to
influence the selection, nomination, election,
or appointment of anyone to a federal, state,
or local public office, or office in a political
organization, or the election of Presidential
or Vice Presidential electors. It does not
matter whether the attempt succeeds.
An expenditure includes a payment,
distribution, loan, advance, deposit, or gift of
money, or anything of value. It also includes
a contract, promise, or agreement to make
an expenditure, whether or not legally
enforceable.
All section 501(c) organizations. An
exempt organization that is not a political
organization must file Form 1120-POL if it is
treated as having political organization
taxable income under section 527(f)(1).
If a section 501(c) organization
establishes and maintains a section
527(f)(3) separate segregated fund, it is the
fund’s responsibility to file its own Form
1120-POL if the fund meets the Form
1120-POL filing requirements. Do not
include the segregated fund’s receipts,
expenditures, and balance sheet items on
the Form 990, or Form 990-EZ, of the
section 501(c) organization that establishes
and maintains the fund. When answering
questions 81a and 81b on its Form 990, this
section 501(c) organization should disregard
the political expenses and Form 1120-POL
filing requirement of the segregated fund.
However, when a section 501(c)
organization transfers its own funds, to a
separate segregated section 527(f)(3) fund
for use as political expenses, the 501(c)
organization must report the transferred
funds as its own political expenses on its
Form 990 or Form 990-EZ.
Section 501(c)(3) organizations. A section
501(c)(3) organization will lose its
tax-exempt status if it engages in political
activity.
A section 501(c)(3) organization must
pay a section 4955 excise tax for any
amount paid or incurred on behalf of, or in
opposition to, any candidate for public office.
The organization must pay an additional
excise tax if it fails to correct the expenditure
timely.
A manager of a section 501(c)(3)
organization who knowingly agrees to a
political expenditure must pay a section
4955 excise tax, unless the agreement is
not willful and there is reasonable cause. A
manager who does not agree to a correction
of the political expenditure may have to pay
an additional excise tax.
When a section 501(c)(3) organization
promotes a candidate for public office (or is

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used or controlled by a candidate or
prospective candidate), amounts paid or
incurred for the following purposes are
political expenditures:
• Remuneration to such individual (a
candidate or prospective candidate) for
speeches or other services;
• Travel expenses of such individual;
• Expenses of conducting polls, surveys, or
other studies, or preparing papers or other
material for use by such individual;
• Expenses of advertising, publicity, and
fundraising for such individual; and
• Any other expense that has the primary
effect of promoting public recognition or
otherwise primarily accruing to the benefit of
such individual.
An organization is effectively controlled
by a candidate or prospective candidate
only if such individual has a continuing,
substantial involvement in the day-to-day
operations or management of the
organization.
A determination of whether the primary
purpose of an organization is promoting the
candidacy or prospective candidacy of an
individual for public office is made on the
basis of all the facts and circumstances. See
section 4955 and Regulations section
53.4955.
Use Form 4720 to figure and report the
excise taxes.

Line 82. Donated Services Or
Facilities
Because Form 990, or Form 990-EZ, is
open to public inspection, the organization
may want the return to show contributions
the organization received in the form of
donated services or the use of materials,
equipment, or facilities at less than fair
rental value. If so, and if the organization’s
records either show the amount and value of
such items or give a clearly objective basis
for an estimate, the organization may
choose to enter this optional information on
line 82b. The IRS does not require any
organization to keep such records.
However, do not include the value of such
items in Part I or II, or in the expense
column in Part III. The organization may
indicate the value of donated services or
use of materials, equipment, or facilities in
Part III in the narrative description of
program services rendered. See the
instructions for Part III.

Line 83a. Public Inspection
Requirements
Answer “Yes” only if the organization
complied with its public inspection
obligations described in General Instruction
M.

Line 83b. Disclosure Requirements
For Quid Pro Quo Contributions
See General Instruction L.

Line 84a. Solicitations of
Contributions
All organizations that qualify under section
170(c) to receive contributions that are
deductible as charitable contributions for
federal income tax purposes, enter “N/A.”
See General Instruction L.

Line 85. Section 501(c)(4), (5), or
(6) Organizations
Reporting membership dues, lobbying,
and political expenses under section
6033(e). Only certain organizations that are
tax-exempt under:
• Section 501(c)(4) (social welfare
organizations),
• Section 501(c)(5) (agricultural and
horticultural organizations), or
• Section 501(c)(6) (business leagues)
are subject to (a) the section 6033(e) notice
and reporting requirements, and (b) a
potential proxy tax. These organizations
must report their total lobbying expenses,
political expenses, and membership dues,
or similar amounts, on line 85 of Form 990.
Section 6033(e) notice and reporting
requirements and proxy tax. Section
6033(e) requires certain section 501(c)(4),
(5), and (6) organizations to tell their
members what portion of their membership
dues were allocable to the political or
lobbying activities of the organization. If an
organization does not give its members this
information, then the organization is subject
to a proxy tax. The tax is reported on Form
990-T.
However, if the organization meets
Exception 1 or 2, it is excluded from the
notice, reporting, and proxy tax
requirements of section 6033(e). See also
Rev. Proc. 98-19, 1998-1 C.B. 547.
Exception 1. Section 6033(e)(3) exception
for organizations whose dues are
nondeductible. (Check “Yes” for line 85a.)
1. All organizations exempt from tax
under section 501(a), other than section
501(c)(4), (5), and (6) organizations.
2. Local associations of employees’ and
veterans’ organizations described in section
501(c)(4), but not section 501(c)(4) social
welfare organizations.
3. Labor unions and other labor
organizations described in section 501(c)(5),
but not section 501(c)(5) agricultural and
horticultural organizations.
4. Section 501(c)(4), (5), and (6)
organizations that receive more than 90% of
their dues from:
a. Section 501(c)(3) organizations,
b. State or local governments,
c. Entities whose income is exempt from
tax under section 115, or
d. Organizations described in 1 through
3, above.
5. Section 501(c)(4) and (5)
organizations that receive more than 90% of
their annual dues from:
a. Persons,
b. Families, or
c. Entities,
who each paid annual dues of $91 or less in
2006 (adjusted annually for inflation). See
Rev. Proc. 2005-70, 2005-47 I.R.B. 979.
6. Any organization that receives a
private letter ruling from the IRS stating that
the organization satisfies the section
6033(e)(3) exception.
7. Any organization that keeps records
to substantiate that 90% or more of its
members cannot deduct their dues (or
similar amounts) as business expenses
whether or not any part of their dues are
used for lobbying purposes.
8. Any organization that is not a
membership organization.

-38-

Special rules treat affiliated social
welfare organizations, agricultural
CAUTION and horticultural organizations, and
business leagues as parts of a single
organization for purposes of meeting the
nondeductible dues exception. See Rev.
Proc. 98-19.
Exception 2. Section 6033(e)(1) $2,000
in-house lobbying exception. (Check
“Yes” for line 85b.) An organization satisfies
the $2,000 in-house lobbying exception if it:
1. Did not receive a waiver for proxy tax
owed for the prior year.
2. Did not make any political
expenditures or foreign lobbying
expenditures during the 2006 reporting year,
3. Made lobbying expenses during the
2006 reporting year consisting only of
in-house direct lobbying expenses totaling
$2,000 or less, but excluding:
a. Any allocable overhead expenses,
and
b. All direct lobbying expenses of any
local council regarding legislation of direct
interest to the organization or its members.

!

Dues notices. An organization that
checked “No” for both lines 85a and 85b,
and is thus responsible for reporting on line
85c through 85h, must send dues notices to
its members at the time of assessment or
payment of dues, unless the organization
chooses to pay the proxy tax instead of
informing its members of the nondeductible
portion of its dues. These dues notices must
reasonably estimate the dues allocable to
the nondeductible lobbying and political
expenditures reported on line 85d.
IF . . .

THEN . . .

The organization’s
lobbying and political
expenses are more than
its membership dues for
the year,

The organization must:
(a) Allocate all
membership dues to its
lobbying and political
activities, and
(b) Carry forward any
excess lobbying and
political expenses to the
next tax year.

The organization:
(a) Had only de minimis
in-house expenses
($2,000 or less) and no
other nondeductible
lobbying or political
expenses; or

The organization need
not disclose to its
membership the
allocation of dues, etc.,
to its lobbying and
political activities.

(b) Paid a proxy tax,
instead of notifying its
members on the
allocation of dues to
lobbying and political
expenses*; or
(c) Established that
substantially all of its
membership dues, etc.,
are not deductible by
members.
*Such as political campaign or grassroots lobbying
expenses.

Members of the organization cannot take
a trade or business expense deduction on
their tax returns for the portion of their dues,
etc., allocable to the organization’s lobbying
and political activities.

Specific Instructions for Form 990

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Proxy tax.

Alternative gross-up method.

IF . . .

THEN . . .

The organization’s
actual lobbying and
political expenses are
more than it estimated
in its dues notices,

The organization is
liable for a proxy tax on
the excess and reports it
on Form 990-T.

The organization:
(a) Elects to pay the
proxy tax, and
(b) Chooses not to give
its members a notice
allocating dues to
lobbying and political
activities,

All the members’ dues
remain eligible for a
section 162 trade or
business expense
deduction.

• Disregard labor hours, and
• Costs of clerical or support personnel
(other than lobbying personnel).

The organization:
The IRS may permit a
(a) Makes a reasonable waiver of the proxy tax.
estimate of dues
allocable to
nondeductible lobbying
and political activities,
and
(b) Agrees to adjust its
estimate in the following
year*.
*A facts and circumstances test determines whether or
not a reasonable estimate was made in good faith.

Allocation of costs to lobbying activities
and influencing legislation. An
organization that is subject to the lobbying
disclosure rules of section 6033(e) must use
a reasonable allocation method to determine
its total costs of its direct lobbying activities;
that is, costs to influence:
• Legislation, and
• The actions of a covered executive
branch official through direct communication
(for example, President, Vice President, or
cabinet-level officials, and their immediate
deputies) (sections 162(e)(1)(A) and (D)).
Reasonable methods of allocating costs
to direct lobbying activities include, but are
not limited to:
• The ratio method,
• The gross-up and alternative gross-up
methods, and
• A method applying the principles of
section 263A.
See Regulations sections 1.162-28 and
1.162-29 and the special rules and
definitions for these allocation methods
given below.
An organization that is subject to the
lobbying disclosure rules of section 6033(e)
must also determine its total costs of:
• De minimis in-house lobbying,
• Grassroots lobbying, and
• Political activities.
There are no special rules related to
determining these costs.
All methods. For all the allocation
methods, include labor hours and costs of
personnel whose activities involve
significant judgment with respect to lobbying
activities (lobbying personnel).
Special rules and definitions.
Ratio and gross-up methods.
1. May use even if volunteers conduct
activities.
2. May disregard labor hours and costs
of clerical or support personnel (other than
lobbying personnel) under the ratio method.

Specific Instructions for Form 990

Third-party costs are those paid to:

• Outside parties for conducting lobbying
activities,

• Dues paid to another membership

organization that were declared to be
nondeductible lobbying expenses, and
• Travel and entertainment costs for
lobbying activities.
Direct contact lobbying is a:
• Meeting,
• Telephone conversation,
• Letter, or
• Similar means of communication that is
with a:
1. Legislator (other than a local
legislator), or
2. Covered executive branch official
and that otherwise qualifies as a lobbying
activity.
Treat all hours spent by a person in
connection with direct contact lobbying as
labor hours allocable to lobbying activities.
Do not treat the hours spent by a person
who engages in research and other
background activities related to direct
contact lobbying, but who makes no direct
contact with a legislator, or covered
executive branch official, as direct contact
lobbying.
De minimis rule. If less than 5% of a
person’s time is spent on lobbying activities,
and there is no direct contact lobbying, an
organization may treat that person’s time
spent on lobbying activities as zero.
Influencing legislation is:

• Any attempt to influence legislation

through a lobbying communication; and
• All activities, such as research and
coordination for the purpose of making or
supporting a lobbying communication, even
if not yet made.
A lobbying communication is any
communication with any member or
employee of a legislative body, or any other
government official participating in the
formulation of the legislation that:
• Refers to specific legislation and reflects a
view on that legislation, or
• Provides support for views in a prior
lobbying communication.
Purpose for engaging in an activity is
based on all the facts and circumstances. If
an organization’s lobbying communication
was for a lobbying and a nonlobbying
purpose, the organization must make a
reasonable allocation of costs to influencing
legislation.
Correction of prior year lobbying
costs. If in a prior year, an organization
treated costs incurred for a future lobbying
communication as a lobbying cost to
influence legislation, but after the
organization filed a timely return, it appears
the lobbying communication will not be
made under any foreseeable circumstance,
the organization may apply these costs to
reduce its current year’s lobbying costs, but
not below zero. The organization may carry
forward any amount of the costs not used to
reduce its current year’s lobbying costs to
subsequent years.

-39-

Example: Ratio method. X Organization
incurred:
1. 6,000 labor hours for all activities,
2. 3,000 labor hours for lobbying
activities (three employees),
3. $300,000 for operational costs, and
4. No third-party lobbying costs.
X Organization allocated its lobbying costs
as follows:
Lobbying
labor hrs.
3,000
6,000

×

Total labor
hrs.

$300,000

+

Total
costs of
operations

0

= $150,000

Allocable
third-party
costs

Costs
allocable to
lobbying
activities

Examples: Gross-up method and
Alternative gross-up method.
A and B are employees of Y Organization.
1. A’s activities involve significant
judgment with respect to lobbying activities.
2. A’s basic lobbying labor costs
(excluding employee benefits) are $50,000.
3. B performs clerical and support
activities for A.
4. B’s labor costs (excluding employee
benefits) in support of A’s activities are
$15,000.
5. Allocable third-party costs are
$100,000.
If Y Organization uses the gross-up
method to allocate its lobbying costs, Y
multiplies 175% times its basic labor costs
(excluding employee benefits) for all of the
lobbying of its personnel and adds its
allocable third-party lobbying costs as
follows:
175% × $65,000

+ $100,000

Basic lobbying labor
costs of A + B

Allocable
third-party costs

= $213,750
Costs allocable
to lobbying
activities

If Y Organization uses the alternative
gross-up method to allocate its lobbying
costs, Y multiplies 225% times its basic
labor costs (excluding employee benefits)
for all of the lobbying hours of its lobbying
personnel and adds its third-party lobbying
costs as follows:
225% × $50,000
Basic lobbying labor
costs of A

+

$100,000
Allocable
third-party costs

= $212,500
Costs allocable
to lobbying
activities

Section 263A cost allocation method.
The examples that demonstrate this method
are found in Regulations section 1.162-28(f).

Line 85a. Section 6033(e)(3)
Exception For Nondeductible Dues
If the organization meets any of the criteria
of Exception 1 in the line 85 instructions,
answer “Yes” to question 85a. By doing so,
the organization is declaring that
substantially all of its membership dues
were nondeductible. Skip lines 85b through
85h.

Line 85b. In-House Lobbying
Expenditures
An organization is exempt from the notice,
reporting, and proxy tax liability rules of
section 6033(e) if it meets Exception 2, the
$2,000 in-house lobbying exception. Both

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exceptions are discussed in the instructions
for line 85.

Line 85d. Lobbying and Political
Expenditures

An organization should answer “Yes” to
question 85b if it met all of the requirements
of Exception 2. Skip lines 85c through 85h.

Include on line 85d the total amount of
expenses paid or incurred during the 2006
reporting year in connection with:
1. Influencing legislation;
2. Participating or intervening in any
political campaign on behalf of (or in
opposition to) any candidate for any public
office;
3. Attempting to influence any segment
of the general public with respect to
elections, legislative matters, or
referendums; or
4. Communicating directly with a
covered executive branch official in an
attempt to influence the official actions or
positions of such official.

If the organization’s in-house direct
lobbying expenditures during the 2006
reporting year were $2,000 or less, but the
organization also paid or incurred other
lobbying or political expenditures during the
2006 reporting year, or received a waiver for
proxy tax owed for the prior year, it should
answer “No” to question 85b and complete
lines 85c through 85h. However, the $2,000
or less of in-house direct lobbying
expenditures should not be included in the
total on line 85d.
Definitions.
Grassroots lobbying refers to attempts
to influence any segment of the general
public regarding legislative matters or
referendums.
Direct lobbying includes attempting to
influence:
• Legislation through communication with
legislators and other government officials,
and
• The official actions or positions of covered
executive branch officials through direct
communication.
Direct lobbying does not include
attempting to influence:
• Any local council on legislation of direct
interest to the organization or its members,
and
• The general public regarding legislative
matters (grassroots lobbying).
Other lobbying includes:
Grassroots lobbying,
Foreign lobbying,
Third-party lobbying, and
Dues paid to another organization that
were used to lobby.

•
•
•
•

In-house expenditures include:

• Salaries, and
• Other expenses of the organization’s

officials and staff (including amounts paid or
incurred for the planning of legislative
activities).
In-house expenditures do not include:

• Any payments to other taxpayers

engaged in lobbying or political activities as
a trade or business.
• Any dues paid to another organization
that are allocable to lobbying or political
activities.

Line 85c. Dues, Assessments, And
Similar Amounts Received

Also include on line 85d:
1. Excess lobbying and political
expenditures carried over from the
preceding tax year.
2. An amount equal to the taxable
lobbying and political expenditures reported
on line 85f for the preceding tax year, if the
organization received a waiver of the proxy
tax imposed on that amount.
Do not include:
1. Any direct lobbying of any local
council or similar governing body with
respect to legislation of direct interest to the
organization or its members.
2. In-house direct lobbying
expenditures, if the total of such
expenditures is $2,000 or less (excluding
allocable overhead).
3. Political expenditures for which the
section 527 tax has been paid (on Form
1120-POL).

• Reduce the current year’s lobbying

expenditures, but not below zero, by costs
previously allocated in a prior year to
lobbying activities that were cancelled after
a return reporting those costs was filed.
• Carry forward any amounts not used as a
reduction to subsequent years.

Line 85e. Dues Declared
Nondeductible In Notices To
Members
Enter the total amount of dues, etc.,
allocable to the 2006 reporting year that
members were notified were nondeductible
under section 162(e).
Example:

• Membership dues: $100,000 for the 2006
reporting year,

• Organization’s timely notices to

Enter the total dues, assessments, and
similar amounts allocable to the 2006
reporting year.

members — 25% of membership dues
nondeductible, and
• Line 85e entry — $25,000.

The term dues is the amount the
organization requires a member to pay in
order to be recognized as a member.

Line 85f. Taxable Lobbying And
Political Expenditures

Payments that are similar to dues
include:
1. Members’ voluntary payments,
2. Assessments to cover basic operating
costs, and
3. Special assessments to conduct
lobbying and political activities.

The taxable amount reportable on line 85f is
the amount of dues, etc.:
1. Allocable to the 2006 reporting year,
and
2. Attributable to lobbying and political
expenditures that the organization did not
timely notify its members were
nondeductible.

-40-

If the amount on line 85c (dues, etc.) is
greater than the amount on line 85d
(lobbying & political expenses), then:
Line 85d (lobbying & political expenses)
Less
Line 85e (dues shown in notices)
Equals
Line 85f (taxable lobbying & political expenses)

If the amount on line 85c (dues, etc.) is
less than the amount on line 85d (lobbying &
political expenses), then:
Line 85c (dues, etc.)
Less
Line 85e (dues shown in notices)
Equals
Line 85f (taxable lobbying & political
expenses), and
Line 85d (lobbying & political expenses)
Less
Line 85c (dues, etc.)
Equals
The excess amount to be carried over to the
following tax year and reported on line 85d
(lobbying & political expenses), or its
equivalent, on the year 2007 Form 990.

See Examples given below.

Lines 85g and 85h. Proxy Tax And
Waivers
An organization must pay the section
6033(e) proxy tax on the amount reported
on line 85f unless it has the option to check
“Yes” on line 85h.
If the amount on line 85f is zero, or less than
zero, enter on:
Line 85g
N/A
Line 85h
N/A
If the organization sent dues notices to its
members at the time of assessment or
payment of dues that reasonably estimated the
dues allocable to the nondeductible lobbying
and political expenditures reported on line 85d,
enter on:
Line 85g
No
Line 85h
Yes
Include the amount from the 2006 Form 990,
line 85f, on the year 2007 Form 990, line 85d,
or its equivalent.
If the organization did not send these dues
notices, enter on:
Line 85g
Yes
Line 85h
No
Report the proxy tax on Form 990-T.

Underreporting of lobbying expenses.
An organization is subject to the proxy tax
for the 2006 reporting year for
underreported lobbying and political
expenses only to the extent that these
expenses (if actually reported) would have
resulted in a proxy tax liability for that year.
A waiver of proxy tax for the tax year only
applies to reported expenditures.

Specific Instructions for Form 990

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An organization that underreports its
lobbying and political expenses is also
subject to the section 6652(c) daily penalty
for filing an incomplete or inaccurate return.

Examples
Organizations A and B:
1. Reported on the calendar year basis.
2. Incurred only grassroots lobbying
expenses (did not qualify for the under
$2,000 in-house lobbying exception (de
minimis rule)).
3. Allocated dues to the tax year in
which received.
For Organization A — Dues,
assessments, and similar amounts received
in 2006 were greater than its lobbying
expenses for 2006.
Workpapers (for 2006 Form 990) —
Organization A

1. Total dues, assessments, etc.,
received . . . . . . . . . . . . . . . . . .

Line 87. Section 501(c)(12)
Organizations

Gross receipts test. A section 501(c)(7)
organization may receive up to 35% of its
gross receipts, including investment income,
from sources outside its membership and
remain tax-exempt. Part of the 35% (up to
15% of gross receipts) may be from public
use of a social club’s facilities.

One of the requirements that an
organization must meet to qualify under
section 501(c)(12) is that at least 85% of its
gross income consists of amounts collected
from members for the sole purpose of
meeting losses and expenses. For purposes
of section 501(c)(12), the term gross income
is gross receipts without reduction for any
cost of goods sold.

Gross receipts are the club’s income
from its usual activities and include:
• Charges,
• Admissions,
• Membership fees,
• Dues,
• Assessments, and
• Investment income (such as dividends,
rents, and similar receipts), and normal
recurring capital gains on investments.
Gross receipts do not include:

• Capital contributions (see Regulations

$800

2. Lobbying expenses paid or incurred

$600

3. Less: Total nondeductible amount of
dues notices . . . . . . . . . . . . . . .

100

100

4. (Subtract line 3 from both lines 1 and
2) . . . . . . . . . . . . . . . . . . . . .

$700

$500

5. Taxable amount of lobbying expenses
(smaller of the two amounts on line 4)

$500

The amounts on lines 1, 2, 3, and 5

TIP of the workpapers were entered on
lines 85c through 85f of the 2006
Form 990.
Because dues, etc., received were
greater than lobbying expenses, there is no
carryover of excess lobbying expenses to
line 85d of the year 2007 Form 990.
See the instructions for lines 85g and
85h for the treatment of the $500.
For Organization B — Dues,
assessments, and similar amounts received
in 2006 were less than its lobbying
expenses for 2006.
Workpapers (for 2006 Form 990) —
Organization B

1. Total dues, assessments, etc.,
received . . . . . . . . . . . . . . . . . . $400
2. Lobbying expenses paid or incurred
3. Less: Total nondeductible amount of
dues notices . . . . . . . . . . . . . . .

Line 86. Section 501(c)(7)
Organizations

$600
100

100

4. (Subtract line 3 from both lines 1 and
2) . . . . . . . . . . . . . . . . . . . . . $300

$500

5. Taxable amount of lobbying expenses
(smaller of the two amounts on line 4) $300

The amounts on lines 1, 2, 3, and 5

TIP of the workpapers were entered on
lines 85c through 85f of the 2006
Form 990.
Because dues, etc., received were less
than lobbying expenses, excess lobbying
expenses of $200 must be carried forward
to line 85d of the year 2007 Form 990
(excess of $600 of lobbying expenses over
$400 dues, etc., received). The $200 will be
included along with the other lobbying and
political expenses paid or incurred in the
2007 reporting year and reportable on line
85d (or the equivalent line) of the year 2007
Form 990.
See the instructions for lines 85g and
85h for the treatment of the $300.

Specific Instructions for Form 990

section 1.118-1),
• Initiation fees, or
• Unusual amounts of income (such as the
sale of the clubhouse).
College fraternities or sororities or
other organizations that charge
CAUTION membership initiation fees, but not
annual dues, do include initiation fees in
their gross receipts.

!

If the 35% and 15% limits do not affect
the club’s exempt status, include the income
shown on line 86b on the club’s Form 990-T.
Investment income earned by a section
501(c)(7) organization is not tax-exempt
income unless it is set aside for:
• Religious,
• Charitable,
• Scientific,
• Literary,
• Educational purposes, or
• Prevention of cruelty to children or
animals.
If the combined amount of an
organization’s gross investment income
(that is not set aside for charitable purposes)
and other unrelated business income
exceeds $1,000, it must report the
investment income and other unrelated
business income on Form 990-T.
Nondiscrimination policy. A section
501(c)(7) organization is not exempt from
income tax if any written policy statement,
including the governing instrument and
bylaws, allows discrimination on the basis of
race, color, or religion.
However, section 501(i) allows social
clubs to retain their exemption under section
501(c)(7) even though their membership is
limited (in writing) to members of a particular
religion, if the social club:
1. Is an auxiliary of a fraternal
beneficiary society exempt under section
501(c)(8), and
2. Limits its membership to the
members of a particular religion; or the
membership limitation is:
a. A good-faith attempt to further the
teachings or principles of that religion, and
b. Not intended to exclude individuals of
a particular race or color.

-41-

Gross income for mutual or cooperative
electric companies is figured by excluding
any income received or accrued from:
1. Qualified pole rentals,
2. Any provision or sale of electric
energy transmission services or ancillary
service if the services are provided on a
nondiscriminatory open access basis under
an open access transmission tariff;
approved or accepted by the Federal
Energy Regulatory Commission (FERC) or
under an independent transmission provider
agreement approved or accepted by FERC
(other than income received or accrued
directly or indirectly from a member),
3. The provision or sale of electric
energy distribution services or ancillary
services if the services are provided on a
nondiscriminatory, open-access basis to
distribute electric energy not owned by the
mutual or electric cooperative company:
a. To end-users who are served by
distribution facilities not owned by the
company or any of its members (other than
income received or accrued directly or
indirectly from a member), or
b. Generated by a generation facility not
owned or leased by the company or any of
its members and which is directly connected
to distribution facilities owned by such
company or any of its members (other than
income received or accrued directly or
indirectly from a member).
4. From any nuclear decommissioning
transaction, or
5. From any asset exchange or
conversion transaction.
For a mutual or cooperative telephone
company, gross income also does not
include amounts received or accrued either
from another telephone company for
completing long distance calls to or from or
between the telephone company’s
members, or from the sale of display listings
in a directory furnished to the telephone
company’s members. Also, gross income
does not include amounts received or
accrued as qualified pole rentals.

Line 88a.
Answer “Yes” to this question if at any time
during the tax year, the organization owned
a 50% or greater interest in a taxable
corporation or partnership or an entity
disregarded as separate from the
organization under Regulations sections
301.7701-2 and 301.7701-3. If an
organization answers “Yes” on line 88a,
complete Part IX, Information Regarding
Taxable Subsidiaries and Disregarded
Entities.

Line 88b.
Answer “Yes” if at any time during the tax
year, the organization owned more than
50% of the:

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• Stock (by vote or value) in a corporation,
• Interest (either profit or capital) in a

partnership, or
• Beneficial interest in any other entity.
The organization must apply section 318
in determining its ownership of stock in a
corporation and use similar principles in
determining its ownership interests in other
entities.
If the organization answered “Yes,” to
line 88b, complete Part XI, Information
Regarding Transfers To and From
Controlled Entities.

Line 89a. Section 501(c)(3)
Organizations: Disclosure of
Excise Taxes Imposed Under
Section 4911, 4912, or 4955
Section 501(c)(3) organizations must
disclose any excise tax imposed during the
year under section 4911 (excess lobbying
expenditures), 4912 (disqualifying lobbying
expenditures), or, unless abated, 4955
(political expenditures). See sections 4962
and 6033(b).

Line 89b. Section 501(c)(3) and
501(c)(4) Organizations: Disclosure
of Section 4958 Excess Benefit
Transactions and Excise Taxes
Sections 6033(b) and 6033(f) require
section 501(c)(3) and (4) organizations to
report the amount of taxes imposed under
section 4958 (excess benefit transactions)
involving the organization, unless abated, as
well as any other information the Secretary
may require concerning those transactions.
See General Instruction P for a discussion
of excess benefit transactions.
Attach a statement describing any
excess benefit transaction, the disqualified
person or persons involved, and whether or
not the excess benefit transaction was
corrected.

Line 89c. Taxes Imposed on
Organization Managers or
Disqualified Persons
For line 89c, enter the amount of taxes
imposed on organization managers or
disqualified persons under sections 4912,
4955, and 4958, unless abated.

Line 89d. Taxes Reimbursed by
The Organization
For line 89d, enter the amount of tax on line
89c that was reimbursed by the
organization. Any reimbursement of the
excise tax liability of a disqualified person or
organization manager will be treated as an
excess benefit unless (1) the organization
treats the reimbursement as compensation
during the year the reimbursement is made,
and (2) the total compensation to that
person, including the reimbursement, is
reasonable.

Line 89e. Prohibited Tax Shelter
Transactions
Answer “Yes” if the organization was a party
to a prohibited tax shelter transaction as
described in section 4965(e) at any time
during the tax year. See General Instruction
W for information about prohibited tax
shelter transactions.
If the organization answered “Yes,” it
must complete Form 8886-T.

Line 89f. Applicable Insurance
Contract Interest
Answer “Yes” if after August 17, 2006, but
before August 17, 2008, the organization
directly or indirectly acquired an applicable
insurance contract which is a part of a
structured transaction involving a pool of
such contracts. If the organization answered
“Yes,” it also must complete Form 8921 and
Form 8922.
An applicable insurance contract is any
life insurance, annuity or endowment
contract to which an applicable exempt
organization and a person other than an
applicable exempt organization have directly
or indirectly held an interest in the contract
(whether or not at the same time). However,
an applicable insurance contract does not
include any life insurance, annuity or
endowment contract if:
1. All persons directly or indirectly
holding any interest in the contract (other
than applicable exempt organizations) have
an insurable interest in the insured under
the contract independent of any interest of
an applicable exempt organization in the
contract, or
2. The sole interest in the contract of an
applicable exempt organization or each
person other than an applicable exempt
organization is as a named beneficiary, or
3. The sole interest in the contract of
each person other than an applicable
exempt organization is:
a. As a beneficiary of a trust holding an
interest in the contract, but only if the
person’s designation as the beneficiary was
made without consideration and solely on a
purely gratuitous basis, or
b. As a trustee who holds an interest in
the contract in a fiduciary capacity solely for
the benefit of applicable exempt
organizations or persons described above in
1, 2 or 3a.
An applicable exempt organization is any
organization to which contributions received
are deductible for income tax purposes,
estate and gift tax purposes and Indian tribal
governments.

Line 89g. Disclosure of Excess
Business Holdings
Answer “Yes” if the organization is a
supporting organization or a donor advised
fund maintained by a sponsoring
organization; had excess business holdings
during its tax year; and began its tax year
after August 17, 2006. See the Instructions
for Form 4720, Schedule C, to determine if
the organization is subject to the excess
business holdings tax under section 4943. If
the organization answered “Yes” to line 89g,
it must also complete Form 4720.
Donor advised funds. For purposes of the
excise tax on excess business holdings
under section 4943, a donor advised fund
will be treated as a private foundation. For a
definition of donor advised funds, and a
sponsoring organization, see the
instructions for Line 1a. Contributions to
Donor Advised Funds. Also see, Donor
advised funds under Excess Benefit
Transaction, in General Instruction P, to
determine who is considered a disqualified
person for purposes of determining the
excise tax on excess business holdings for a
donor advised fund.

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Supporting organizations. Only certain
supporting organizations are subject to the
excess business holdings tax under section
4943. These include:
• Type III supporting organizations that are
not functionally integrated; and
• Type II supporting organizations that
accept any gift or contribution from a person
who, by himself or in connection with a
related party, controls the supported
organization of such Type II supporting
organization.
To determine if the organization is a
supporting organization and if so, what type
of supporting organization it is, see the
Instructions for Schedule A, Line 13.
Supporting Organizations.
Also see, Supporting organizations under
Excess Benefit Transaction, in General
Instruction P, to determine who is
considered a disqualified person for
purposes of determining the excise tax on
excess business holdings for a supporting
organization.

Line 90a. List of States
List each state with which the organization is
filing a copy of this return in full or partial
satisfaction of state filing requirements.

Line 90b. Number of Employees
Enter the number of employees on the
organization’s payroll during the pay period
including March 12, 2006, as shown on its
Form 941 or Form 943 (January-March
calendar quarter return only). Do not include
household employees, persons who
received no pay during the pay period,
pensioners, or members of the Armed
Forces.

Line 91b. Foreign Accounts
Check the “Yes” box if either 1 or 2 below
applies:
1. At any time during the calendar year,
the organization had an interest in or
signature or other authority over a financial
account in a foreign country (such as a bank
account, securities account, or other
financial account); and
a. The combined value of the accounts
was more than $10,000 at any time during
the calendar year; and
b. The accounts were not with a U.S.
military banking facility operated by a U.S.
financial institution.
2. The organization owns more than
50% of the stock in any corporation that
would answer “Yes” to item 1 above.
If the “Yes” box is checked, enter the
name of the foreign country or countries.
Attach a separate sheet if more space is
needed. File Form TD F 90-22.1 by June 30,
2007, with the Department of the Treasury
at the address shown on the form.
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
www.irs.gov. Do not file Form TD F 90-22.1
with the IRS or attach it to Form 990.

Line 92. Section 4947(a)(1)
Nonexempt Charitable Trusts
Section 4947(a)(1) nonexempt charitable
trusts that file Form 990 instead of Form
1041 must complete this line. The trust
should include exempt-interest dividends
received from a mutual fund or other

Specific Instructions for Form 990

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regulated investment company as well as
tax-exempt interest received directly.

Part VII—Analysis of
Income-Producing Activities
Political organizations described in section
527 are not required to complete this Part.
An organization is exempt from income
taxes only if its primary purpose is to
engage in the type of activity for which it
claims exemption.
An exempt organization is subject to a
tax on unrelated business taxable income if
such income is from a trade or business that
is regularly carried on by the organization
and is not substantially related to the
organization’s performance of its exempt
purpose or function. Generally, a tax-exempt
organization with gross income of $1,000 or
more for the year from an unrelated trade or
business must file Form 990-T and pay any
tax due.
In Part VII, show whether revenue, also
reportable on lines 2 through 11 of Part I,
was received from activities related to the
organization’s purpose or activities
unrelated to its exempt purpose. Enter gross
amounts unless indicated otherwise. Show
also any revenue excludable from the
definition of unrelated business taxable
income.
The sum of amounts entered in columns
(B), (D), and (E) for lines 93 through 103 of
Part VII should match amounts entered for
correlating lines 2 through 11 of Part I. Use
the following table to verify the relationship
of Part VII with Part I.
Contributions that are reportable on

TIP lines 1a through 1e of Part I are not
reportable in Part VII.
Amounts in Part VII
on Line:
93(a) through (g) . . . .
94 . . . . . . . . . . . . .
95 . . . . . . . . . . . . .
96 . . . . . . . . . . . . .
97 and 98 . . . . . . . . .
99 . . . . . . . . . . . . .
100 . . . . . . . . . . . . .
101 . . . . . . . . . . . . .
102 . . . . . . . . . . . . .
103(a) through (e) . . . .
105 (plus line 1e, Part I)

Correspond to
Amounts in
Part I on Line:
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2
3
4
5
6c
7
8d
9c
10c
11
12

Completing Part VII
Column (A)
In column (A), identify any unrelated
business income reportable in column (B) by
selecting a business code from the Codes
for Unrelated Business Activity in the 2006
Instructions for Form 990-T.

!

Use the codes shown in the 2006
Instructions for Form 990-T.

CAUTION

Column (B)
In column (B), enter any revenue received
from activities unrelated to the exempt
purpose of the organization. See the
Instructions for Form 990-T and Pub. 598 for
a discussion of what is unrelated business
income. If the organization enters an

Specific Instructions for Form 990

amount in column (B), then it must enter a
business code in column (A).

service, product, or facility that primarily
benefited the government agencies.

Column (C)

Report on line 2 of Part I (program
service revenue) the sum of the entries in
columns (B), (D), and (E) for lines 93(a)
through (g).

In column (C), enter an exclusion code from
the Exclusion Codes list on the last page of
the Specific Instructions for Form 990 to
identify any revenue excludable from
unrelated business income. If more than one
exclusion code applies to a particular
revenue item, use the lowest numbered
exclusion code that applies. If nontaxable
revenues from several sources are
reportable on the same line in column (D),
use the exclusion code that applies to the
largest revenue source. If the list of
exclusion codes does not include an item of
revenue that is excludable from unrelated
business income, enter that item in column
(E) and see the instructions for column (E).

Column (D)
For column (D), identify any revenue
received that is excludable from unrelated
business income. If the organization enters
an amount in column (D), it must enter an
exclusion code in column (C).

Column (E)
For column (E), report any revenue from
activities related to the organization’s
exempt purpose; (for example, income
received from activities that form the basis
of the organization’s exemption from
taxation). Also report here any revenue that
is excludable from gross income other than
by section 512, 513, or 514, such as interest
on state and local bonds that is excluded
from tax by section 103. Explain in Part VIII
how any amount reported in column (E)
relates to the accomplishment of the
organization’s exempt purposes.

Lines 93(a) through (g). Program
Service Revenue
List the organization’s revenue-producing
program service activities on these lines.
Program service activities are primarily
those that form the basis of an
organization’s exemption from tax. Enter in
the appropriate columns, gross revenue
from each program service activity and the
business and exclusion codes that identify
this revenue. See the explanation of
program service revenue in the instructions
for Part I, line 2. For 501(c)(15) reporting of
insurance premiums received, refer to
instructions for Part I, line 2.

Line 93(f). Medicare and Medicaid
Payments
Enter the revenue received from Medicare
and Medicaid payments. See the Example
of program service revenue in the
instructions for Part I, line 2.

Line 93(g). Fees and Contracts
From Government Agencies
In the appropriate columns, enter gross
revenue earned from fees and contract
payments by government agencies for a
service, facility, or product that benefited the
government agency primarily, either
economically or physically. Do not include
government grants that enabled the
organization to benefit the public directly
and primarily. See Part I, line 1d instructions
for the distinction between government
grants that represent contributions and
payments from government agencies for a

-43-

Lines 94 through 96. Dues,
Assessments, Interest, and
Dividends
In the appropriate columns, report the
revenue received for these line items.
General instructions for lines 94 through 96
are given in the instructions for Part I, lines 3
through 5.

Lines 97 and 98. Rental Income
(Loss)
Report net rental income from investment
property on these lines. Also report here
rental income from unaffiliated exempt
organizations. Report rental income,
however, from an exempt function (program
service) on line 93. Refer to the instructions
for Part I, line 6. A more detailed discussion
of rental income is given in the Instructions
for Form 990-T and Pub. 598.
Rents from real property are usually
excluded in computing unrelated business
taxable income, as are incidental amounts
(10% or less) of rental income from personal
property leased with real property (mixed
lease). In a mixed lease where the rent
attributable to personal property is more
than 50% of the total rent, neither rent from
real or personal property is excluded from
unrelated business taxable income. The
exclusion also does not apply when the real
or personal property rentals depend wholly
or partly on the income or profits from
leased property, other than an amount
based on a fixed percentage or percentage
of gross receipts or sales.
The rental exclusion from unrelated
business taxable income does not apply to
debt-financed real property. In general,
debt-financed property is any property that
the organization finances by debt and holds
to produce income instead of for exempt
purposes. An exempt organization’s income
from debt-financed property is treated as
unrelated business taxable income and is
subject to tax in the same proportion as the
property remains financed by the debt. If
substantially all (85% or more) of any
property is used for an organization’s
exempt purposes, the property is not treated
as debt-financed property. The rules for
debt-financed property do not apply to rents
from personal property.

Lines 99 through 102
In the appropriate columns, report the
revenue received for these line items.
General instructions for lines 99 through 102
are given in the instructions for Part I, lines 7
through 10.

Lines 103(a) through (e). Other
Revenue
List any Other revenue activity on these
lines. These activities are discussed in the
instructions for line 11, Part I. In the
appropriate columns, enter the revenue
received from these activities. Select
applicable business and exclusion codes.
Report as Other revenue, on line 11 of Part

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I, the total revenue entered in columns (B),
(D), and (E) for lines 103(a) through (e).

If additional space is needed, see
Attachments in General Instruction X.

organization must report and pay an excise
tax, equal to premiums paid, on Form 4720.

Part IX—Information Regarding
Taxable Subsidiaries and
Disregarded Entities

Part XI — Information
Regarding Transfers to and
From Controlled Entities

Column (A). Enter the name, address, and
EIN of each taxable corporation or
partnership and each disregarded entity in
which the organization held a 50% or
greater interest at any time during the year.
If a disregarded entity does not have its own
EIN, state that it uses the organization’s
EIN.
Columns (D) and (E). Enter the
corporation’s or partnership’s total income
and end-of-year total assets as reported on
each entity’s federal tax return for the year
ending within the year covered by the parent
organization’s Form 990. Since the financial
information of a disregarded entity is
reported on its parent organization’s return,
enter in column (D) the amount on line 12,
Total revenue, that is attributable to the
disregarded entity. Enter in column (E) the
amount on line 59, Total assets, column (B),
that is attributable to the disregarded entity.

Line 106. Answer “Yes” and complete the
schedule if at any time during the tax year
the organization made any loans or
transfers to a corporation, partnership, or
other entity, which it controlled within the
meaning of section 512(b)(13). In column
(c), describe each loan or transfer. In
column (d) enter the amount for each loan
or transfer to each controlled entity. If
additional space is needed, attach a
statement. See Attachments in General
Instruction X.

Line 105. Total
Enter the total revenue reported on line 104
for columns (B), (D), and (E). The amount
reported on line 105, plus the amount on
line 1e of Part I, should equal the amount
entered for Total revenue on line 12 of Part
I.

Part VIII—Relationship of
Activities to the
Accomplishment of Exempt
Purposes
To explain how an amount entered in Part
VII, column (E), was related or exempt
function income, show the line number of
the amount in column (E) and give a brief
description of how the activity reported in
column (E) specifically contributed to the
accomplishment of the organization’s
exempt purposes (other than by providing
funds for such purposes). Activities that
generate exempt-function income are
activities that form the basis of the
organization’s exemption from tax.
Also give the line number and an
explanation for any income entered in
column (E) that is specifically excluded from
gross income other than by sections 512,
513, or 514. If no amount is entered in
column (E), do not complete Part VIII.
Example. M, an organization described
in section 501(c)(3), operates a school for
the performing arts. Admission is charged at
student performances. M reported
admission income in column (E) of Part VII
and explained in Part VIII that performances
before an audience were an essential part of
the students’ training and related to the
exempt purpose of the organization.
Because M also reported interest from
state bonds in column (E) of Part VII, M
explained in Part VIII that such interest was
excluded from gross income by section 103.

Part X—Information Regarding
Transfers Associated With
Personal Benefit Contracts
See General Instruction V which also
discusses the reporting requirements for this
Part.
If, in connection with any transfer of
funds to a charitable organization, the
organization directly or indirectly pays
premiums on any personal benefit contract,
or there is an understanding or expectation
that any person will directly or indirectly pay
such premiums, the organization must
report the premiums it paid and the
premiums paid by others, but treated as
paid by the organization, on Form 8870. The

-44-

Line 107. Answer “Yes” and complete the
schedule if at any time during the tax year,
the organization received any transfers of
funds or payments from a controlled entity
within the meaning of section 512(b)(13).
In column (c), describe each transfer.
Indicate in the description if such transfer is
a qualifying specified payment (described in
line 108) and indicate the type of transfer
such as interest, annuities, royalties, rents,
dividends, fees or other payments for
services, or contributions to capital, and
loans.
In column (d), enter the amount received
for each type of payment. If additional space
is needed, attach a statement. See
Attachments in General Instruction X.
Line 108. Answer “Yes” if the organization
had a contract covering payments from a
controlled entity of interest, annuities,
royalties, or rents, but only if the contract
was in writing, legally enforceable, and in
effect on August 17, 2006. Also, answer
“Yes” if the contract described above had
been renewed with substantially similar
terms.

Specific Instructions for Form 990

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Exclusion Codes
General Exceptions
01— Income from an activity that is not regularly
carried on (section 512(a)(1))
02— Income from an activity in which labor is a
material income-producing factor and
substantially all (at least 85%) of the work
is performed with unpaid labor (section
513(a)(1))
03— Section 501(c)(3) organization—Income
from an activity carried on primarily for the
convenience of the organization’s
members, students, patients, visitors,
officers, or employees (hospital parking lot
or museum cafeteria, for example) (section
513(a)(2))
04— Section 501(c)(4) local association of
employees organized before 5/27/69—
Income from the sale of work-related
clothes or equipment and items normally
sold through vending machines; food
dispensing facilities; or snack bars for the
convenience of association members at
their usual places of employment (section
513(a)(2))
05— Income from the sale of merchandise,
substantially all of which (at least 85%) was
donated to the organization (section
513(a)(3))

Specific Exceptions
06— Section 501(c)(3), (4), or (5) organization
conducting an agricultural or educational
fair or exposition—Qualified public
entertainment activity income (section
513(d)(2))
07— Section 501(c)(3), (4), (5), or (6)
organization—Qualified convention and
trade show activity income (section
513(d)(3))
08— Income from hospital services described in
section 513(e)
09— Income from noncommercial bingo games
that do not violate state or local law
(section 513(f))
10— Income from games of chance conducted
by an organization in North Dakota (section
311 of the Deficit Reduction Act of 1984,
as amended)
11— Section 501(c)(12) organization—Qualified
pole rental income (section 513(g)) and/or
member income (described in section
501(c)(12)(H))
12— Income from the distribution of low-cost
articles in connection with the solicitation of
charitable contributions (section 513(h))
13— Income from the exchange or rental of
membership or donor list with an
organization eligible to receive charitable
contributions by a section 501(c)(3)
organization; by a war veterans’
organization; or an auxiliary unit or society
of, or trust or foundation for, a war
veterans’ post or organization (section
513(h))

Modifications and Exclusions
14— Dividends, interest, payments with respect
to securities loans, annuities, income from
notional principal contracts, loan
commitment fees, and other substantially
similar income from ordinary and routine
investments excluded by section 512(b)(1)
15— Royalty income excluded by section
512(b)(2)
16— Real property rental income that does not
depend on the income or profits derived by
the person leasing the property and is
excluded by section 512(b)(3)

Specific Instructions for Form 990

17— Rent from personal property leased with
real property and incidental (10% or less) in
relation to the combined income from the
real and personal property (section
512(b)(3))
18— Gain (or loss, to the extent allowed) from
the sale of investments and other
non-inventory property and from certain
property acquired from financial institutions
that are in conservatorship or receivership
(sections 512(b)(5) and 512(b)(16)(A))
19— Income or loss from the lapse or
termination of options to buy or sell
securities, or real property, and from the
forfeiture of good-faith deposits for the
purchase, sale, or lease of investment real
property (section 512(b)(5))
20— Income from research for the United
States; its agencies or instrumentalities; or
any state or political subdivision (section
512(b)(7))
21— Income from research conducted by a
college, university, or hospital (section
512(b)(8))
22— Income from research conducted by an
organization whose primary activity is
conducting fundamental research, the
results of which are freely available to the
general public (section 512(b)(9))
23— Income from services provided under
license issued by a Federal regulatory
agency and conducted by a religious order
or school operated by a religious order, but
only if the trade or business has been
carried on by the organization since before
May 27, 1959 (section 512(b)(15))

31—

32—

33—

34—

35—

36—

37—

Foreign Organizations
24— Foreign organizations only—Income from a
trade or business NOT conducted in the
United States and NOT derived from United
States sources (patrons) (section 512(a)(2))

38—

Social Clubs and VEBAs

85% of the use of the property is for the
organization’s exempt purposes (Note:
This code is only for income from the
15% or less non-exempt purpose use.)
(section 514(b)(1)(A))
Gross income from mortgaged property
used in research activities described in
section 512(b)(7), (8), or (9) (section
514(b)(1)(C))
Gross income from mortgaged property
used in any activity described in section
513(a)(1), (2), or (3) (section 514(b)(1)(D))
Income from mortgaged property
(neighborhood land) acquired for exempt
purpose use within 10 years (section
514(b)(3))
Income from mortgaged property
acquired by bequest or devise (applies to
income received within 10 years from the
date of acquisition) (section 514(c)(2)(B))
Income from mortgaged property
acquired by gift where the mortgage was
placed on the property more than 5 years
previously and the property was held by
the donor for more than 5 years (applies
to income received within 10 years from
the date of gift) (section 514(c)(2)(B))
Income from property received in return
for the obligation to pay an annuity
described in section 514(c)(5)
Income from mortgaged property that
provides housing to low and moderate
income persons to the extent the
mortgage is insured by the Federal
Housing Administration (section 514(c)(6))
(Note: In many cases, this would be
exempt function income reportable in
column (E). It would not be so in the case
of a section 501(c)(5) or (6) organization,
for example, that acquired the housing as
an investment or as a charitable activity.)
Income from mortgaged real property
owned by: a school described in section
170(b)(1)(A)(ii); a section 509(a)(3) affiliated
support organization of such a school; a
section 501(c)(25) organization, or by a
partnership in which any of the above
organizations owns an interest if the
requirements of section 514(c)(9)(B)(vi) are
met (section 514(c)(9))

25— Section 501(c)(7), (9), or (17) organization—
Non-exempt function income set aside for
a charitable, etc., purpose specified in
section 170(c)(4) (section 512(a)(3)(B)(i))
26— Section 501(c)(7), (9), or (17) organization—
Proceeds from the sale of exempt function
property that was or will be timely
Special Rules
reinvested in similar property (section
512(a)(3)(D))
39— Section 501(c)(5) organization—Farm
income used to finance the operation and
27— Section 501(c)(9), or (17) organization—
maintenance of a retirement home,
Non-exempt function income set aside for
hospital, or similar facility operated by the
the payment of life, sick, accident, or other
organization for its members on property
benefits (section 512(a)(3)(B)(ii))
adjacent to the farm land (section
Veterans’ Organizations
1951(b)(8)(B) of Public Law 94-455)
28— Section 501(c)(19) organization—Payments
40— Annual dues not exceeding $131 (subject
for life, sick, accident, or health insurance
to inflation) paid to a section 501(c)(5)
for members or their dependents that are
agricultural or horticultural organization
set aside for the payment of such
(section 512(d))
insurance benefits or for a charitable, etc.,
Trade or Business
purpose specified in section 170(c)(4)
(section 512(a)(4))
41— Gross income from an unrelated activity
that is regularly carried on but, in light of
29— Section 501(c)(19) organization—Income
continuous losses sustained over a
from an insurance set-aside (see code 28
number of tax periods, cannot be
above) that is set aside for payment of
regarded as being conducted with the
insurance benefits or for a charitable,
motive to make a profit (not a trade or
etc., purpose specified in section
business)
170(c)(4) (Regulations section
1.512(a)–4(b)(2))

Other

Debt-financed Income
30—

Income exempt from debt-financed
(section 514) provisions because at least

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42—
43—

Receipt of qualified sponsorship
payments described in section 513(i)
Exclusion of any gain or loss from the
qualified sale, exchange, or other
disposition of any qualifying brownfield
property (section 512(b)(18)[(19)])

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Item C—Name and Address

Specific Instructions for
Form 990-EZ
See also the General Instructions that apply
to both Form 990 and Form 990-EZ.
Contents

Page

Completing the Heading of Form 990-EZ . . .

46

Part I — Revenue, Expenses, and Changes in
Net Assets or Fund Balances . . . . . . . . . .

47

Part II — Balance Sheets . . . . . . . . . . . . .

51

Part III — Statement of Program Service
Accomplishments . . . . . . . . . . . . . . . . . .

51

Part IV — List of Officers, Directors, Trustees,
and Key Employees . . . . . . . . . . . . . . . .

52

Part V — Other Information . . . . . . . . . . . .

52

Completing the Heading of
Form 990-EZ
The instructions that follow are keyed to
items in the heading for Form 990-EZ.

Item A—Accounting Period
File the 2006 return for calendar year 2006
and fiscal years that begin in 2006 and end
in 2007. For a fiscal year return, fill in the tax
year space at the top of page 1.

Item B—Checkboxes
Address change, name change, and
initial return. Check the appropriate box if
the organization changed its address since it
filed its previous return, or if this is the first
time the organization is filing either a Form
990 or a Form 990-EZ.
If the tax-exempt organization has
changed its name, attach the following
documents:
IF the
organization is .
A corporation

A trust

An association

THEN attach . . .
An amendment to the articles
of incorporation with proof of
filing with the state of
incorporation.
An amendment to the trust
agreement signed by the
trustee.
An amendment to the articles
of association, constitution,
bylaws, or other organizing
document, along with
signatures of at least two
officers/members.

Final return and amended return.
Organizations should file final returns when
they cease to be section 501(a)
organizations or section 527 organizations;
for example, when they cease operations
and dissolve. See the instructions for line 36
that discuss liquidations, dissolutions,
terminations, or substantial contractions.
If the return is an amended return, check
the box. There are amended return
requirements when filing with a state. See
General Instructions E and J.
Application pending. If the organization’s
application for exemption is pending, check
this box and complete the return.

If we mailed the organization a Form 990
Package with a preaddressed mailing label,
attach the label in the name and address
space on the organization’s return. Using
the label helps us avoid errors in processing
the return. If any information on the label is
wrong, draw a line through that part and
correct it.
If the organization operates under a
name different from its legal name, give the
legal name of the organization but identify
its alternate name, after the legal name, by
writing “aka” (also known as) and the
alternate name of the organization.
However, if the organization has changed its
name, follow the instructions for Name
change in Item B — Checkboxes.
Include the suite, room, or other unit
number after the street address. If the Post
Office does not deliver mail to the street
address and the organization has a P.O.
box, show the box number instead of the
street address.
If the organization receives its mail in
care of a third party (such as an accountant
or an attorney), enter on the street address
line C/O followed by the third party’s name
and street address or P.O. box.
For foreign addresses, enter information
in the following order: City, province or state,
and the name of the country. Follow the
foreign country’s practice in placing the
postal code in the address. Please do not
abbreviate the country name.
If a change of address occurs after the
return is filed, use Form 8822 to notify the
IRS of the new address.

Item D—Employer Identification
Number
The organization should have only one
federal employer identification number
(EIN). If the organization has more than one
EIN and has not been advised which to use,
notify the Internal Revenue Service Center,
Ogden, UT 84201-0027. State what
numbers the organization has, the name
and address to which each number was
assigned, and the address of its principal
office. The IRS will advise the organization
which number to use.
A section 501(c)(9) voluntary
employees’ beneficiary association
CAUTION must use its own EIN and not the
EIN of its sponsor.

!

Item E—Telephone Number
Enter a telephone number of the
organization that members of the public and
government regulators may use during
normal business hours to obtain information
about the organization’s finances and
activities. If the organization does not have a
telephone number, enter the telephone
number of an organization official who can
provide such information.

Item F—Group Exemption Number
The group exemption number (GEN) is a
number assigned by the IRS to the central/
parent organization of a group that has a
group ruling.
If the organization is covered by a group
exemption letter, enter the four-digit group
exemption number. Contact the central/

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parent organization if the organization is
unsure of the GEN assigned.

Item G—Accounting Method
Indicate the method of accounting used in
preparing this return. See General
Instruction G.

Item H—Schedule B (Form 990,
990-EZ, or 990-PF)
Whether or not the organization enters any
amount on line 1 of Form 990-EZ, the
organization must either check the box in
item H or attach Schedule B (Form 990,
990-EZ, or 990-PF). Failure to either check
the box in item H or file Schedule B (Form
990, 990-EZ, or 990-PF) will result in a
determination that the return is incomplete.
See the Instructions for Schedule B (Form
990, 990-EZ, or 990-PF), for more
information.
Contributor includes individuals,

TIP fiduciaries, partnerships,
corporations, associations, trusts,
and exempt organizations.

Guidelines for Meeting the
Requirements of Schedule B (Form
990, 990-EZ, or 990-PF)
Section 501(c)(3) Org. Meeting the 1/3 Support
Test of 170(b)(1)(A)
If . . . . . . . A section 501(c)(3) organization that
met the 1/3 support test of the
regulations under 509(a)(1)/
170(b)(1)(A) did not receive a
contribution of the greater of $5,000
or 2% of the amount on line 1 of
Form 990-EZ, from any one
contributor,*
Then . . . . The organization should check the
box in item H to certify that it is not
required to attach Schedule B (Form
990, 990-EZ, or 990-PF).
Otherwise Complete and attach Schedule B
(Form 990, 990-EZ, or 990-PF).
Section 501(c)(7), (8), or (10) Organizations
If . . . . . . . A section 501(c)(7), (8), or (10)
organization did not receive any
contribution or bequest for use
exclusively for religious, charitable,
scientific, literary, or educational
purposes, or the prevention of cruelty
to children or animals (and did not
receive any noncharitable
contributions of $5,000 or more as
described below under general
rule),
Then . . . . The organization should check the
box in item H to certify that it is not
required to attach Schedule B (Form
990, 990-EZ, or 990-PF).
Otherwise Complete and attach Schedule B
(Form 990, 990-EZ, or 990-PF).
All Other Form 990 or Form 990-EZ
Organizations (General rule)
If . . . . . . . The organization did not show as
part of line 1 of the Form 990-EZ, a
contribution of $5,000 or more from
any one contributor,*
Then . . . . The organization should check the
box in item H to certify that it is not
required to attach Schedule B (Form
990, 990-EZ, or 990-PF).

Specific Instructions for Form 990-EZ

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Otherwise Complete and attach Schedule B
(Form 990, 990-EZ, or 990-PF).
* Total a contributor’s gifts of $1,000 or more to determine
if a contributor gave $5,000 or more. Do not include
smaller gifts.

Item I—Website
Show the organization’s website address if a
website is available. Otherwise, write “N/A”
(not applicable). Consider adding the
organization’s email address to its website.

Item J— Organization Type
If the organization is exempt under section
501(c), check the applicable box and insert,
within the parentheses, the number that
identifies the type of section 501(c)
organization the filer is. See the chart in
General Instruction C. The term section
501(c)(3) includes organizations exempt
under sections 501(e), (f), (k), and (n).
Check the box if the organization is a
section 527 political organization. See
General Instruction U.
If the organization is a section 4947(a)(1)
nonexempt charitable trust, check the
applicable box. Note also the discussion
regarding Schedule A (Form 990 or 990-EZ)
and Form 1041 in General Instruction D and
the instructions for line 43.

Item K—Gross Receipts of $25,000
or Less
Check this box if the organization is not a
section 509(a)(3) supporting organization
and its gross receipts are normally not more
than $25,000 but the organization chooses
to file a return. If the organization chooses to
file a return, be sure to file a complete
return. See General Instruction B for a
discussion on gross receipts and General
Instruction X for a discussion on a complete
return.
To figure if a section 501(c)(15)
organization qualifies for
CAUTION tax-exemption for the year, see the
definition of gross receipts for section
501(c)(15) purposes under Section
501(c)(15) Organizations in General
Instruction A. Do not use the section
501(c)(15) definition of gross receipts to
figure if the organization’s gross receipts are
normally $25,000 or less.

!

Part I—Revenue, Expenses,
and Changes in Net Assets or
Fund Balances
All organizations filing Form 990-EZ with the
IRS or any state must complete Part I.
Some states that accept Form 990-EZ in
place of their own forms may require
additional information. See General
Instruction E.

Line 1. Contributions, Gifts,
Grants, and Similar Amounts
Received
A. What is included on line 1
• Report amounts received as voluntary

contributions; (for example, payments, or
the part of any payment, for which the payer
(donor) does not receive full retail value (fair
market value) from the recipient (donee)
organization).
• Enter the gross amounts of contributions,
gifts, grants, and bequests that the
organization received from individuals,
trusts, corporations, estates, affiliates,
foundations, public charities, and other
exempt organizations, or raised by an
outside professional fundraiser.
• Report the value of noncash contributions
at the time of the donation. For example,
report the gross value of a donated car as of
the time the car was received as a donation.
• Report all related expenses on lines 12
through 16. The organization must show on
line 13 professional fundraising fees relating
to the gross amounts of contributions
collected in the charity’s name by
fundraisers.
Reporting for line 1, in accordance with
SFAS 116, Accounting for Contributions
Received and Contributions Made, is
acceptable for Form 990-EZ, or Form 990,
purposes, but not required by the IRS.
However, see General Instruction E.
An organization that receives a grant to
be paid in future years should, according to
SFAS 116, report the grant’s present value
on line 1. Accruals of present value
increments to the unpaid grant should also
be reported on line 1 in future years.

Only those organizations with gross receipts
of less than $100,000 and total assets of
less than $250,000 at the end of the year
can use the Form 990-EZ. If the
organization does not meet these
requirements, it must file Form 990. The
organization’s gross receipts are the total
amount it received from all sources during
its annual accounting period, without
subtracting any costs or expenses. See the
gross receipts discussion in General
Instruction B.

1. Contributions can arise from special
events when an excess payment is
received for items offered. Fundraising
activities relate to soliciting and receiving
contributions. However, special fundraising
activities such as dinners, door-to-door
sales of merchandise, carnivals, and bingo
games can produce both contributions and
revenue. Report as a contribution, both on
line 1 and on line 6a (within the
parentheses), any amount received through
such a special event that is greater than the
fair market value (retail value) of the
merchandise or services furnished by the
organization to the contributor.

To figure if a section 501(c)(15)
organization qualifies for
CAUTION tax-exemption for the year, see the
definition of gross receipts for section
501(c)(15) purposes under Section
501(c)(15) Organizations in General
Instruction A. Do not use the section
501(c)(15) definition of gross receipts to
figure the amount to enter here.

This situation usually occurs when
organizations seek support from the public
through solicitation programs that are in part
special events or activities and are in part
solicitations for contributions. The primary
purpose of such solicitations is to receive
contributions and not to sell the
merchandise at its retail value even though
this might produce a profit.

Specific Instructions for Form 990-EZ

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Item L—Figuring Gross Receipts

!

Example. An organization announces
that anyone who contributes at least $40 to
the organization can choose to receive a
book worth $16 retail value. A person who
gives $40, and who chooses the book, is
really purchasing the book for $16 and also
making a contribution of $24. The
contribution of $24, which is the difference
between the buyer’s payment and the $16
retail value of the book, would be reported
on line 1 and again on line 6a (within the
parentheses). The revenue received ($16
retail value of the book) would be reported in
the right-hand column on line 6a. Any
expenses directly relating to the sale of the
book would be reported on line 6b. Any
fundraising expenses relating to the
contribution of $24 would be reported on
lines 12 through 16.
If a contributor gives more than $40, that
person would be making a larger
contribution, the difference between the
book’s retail value of $16 and the amount
actually given. See also the instructions for
line 6 and Pub. 526.
At the time of any solicitation or
payment, organizations that are
CAUTION eligible to receive tax-deductible
contributions should advise patrons of the
amount deductible for federal tax purposes.
See General Instruction L.
2. Contributions can arise from special
events when items of only nominal value
are given or offered. If an organization
offers goods or services of only nominal
value through a special event, or distributes
free, unordered, low-cost items to patrons,
report the entire amount received for such
benefits as a contribution on line 1. Report
all related expenses on lines 12 through 16.
See General Instruction L for a definition
of benefits that have a nominal or
insubstantial value.
3. Section 501(c)(3) organizations. These
organizations must compute the amounts of
revenue and contributions received from
special events according to the above
instructions when preparing their Support
Schedule in Part IV-A of Schedule A (Form
990 or 990-EZ).
4. Grants equivalent to contributions.
Grants made to encourage an organization
receiving the grant to carry on programs or
activities that further the grant recipient’s
exempt purposes are grants that are
equivalent to contributions. Report them on
line 1. The grantor may specify which of the
recipient’s activities the grant may be used
for, such as an adoption program or a
disaster relief project.
A grant is still equivalent to a contribution
if the grant recipient performs a service, or
produces a work product, that benefits the
grantor incidentally (but see line 1,
instruction B1, below).
5. Contributions received through other
fundraising organizations. Contributions
received indirectly from the public through
solicitation campaigns conducted by
federated fundraising agencies (such as
United Way) are included on line 1.
6. Contributions received from
associated organizations. Include on line
1 amounts contributed by other
organizations closely associated with the
reporting organization. This includes
contributions received from a parent

!

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organization, subordinate, or another
organization having the same parent.
7. Contributions from a commercial
co-venture. Include amounts contributed
by a commercial co-venture on line 1. These
contributions are amounts received by the
organization for allowing an outside
organization (donor) or individual to use the
recipient organization’s name in a sales
promotion campaign.
8. Contributions or grants from
governmental units. A grant, or other
payment from a governmental unit, is
treated as a grant equivalent to a
contribution if its primary purpose is to
enable the recipient to provide a service to,
or maintain a facility for, the direct benefit of
the public rather than to serve the direct and
immediate needs of the grantor (even if the
public pays part of the expense of providing
the service or facility). (See also line 1,
instruction B1, below.)
9. Contributions in the form of
membership dues. Include on line 1
membership dues and assessments to the
extent they are contributions and not
payments for benefits received. (See line 3,
instruction C1.)

B. What is not included on line 1
1. Grants that are payments for services
are not contributions. A grant is a
payment for services, and not a contribution,
when the terms of the grant provide the
grantor with a specific service, facility, or
product, rather than providing a benefit to
the general public or that part of the public
served by the grant recipient. The recipient
organization would report such a grant as
income on line 2 (program service revenue).
2. Donations of services. Do not include
the value of services donated to the
organization, or items such as the free use
of materials, equipment, or facilities, as
contributions on line 1. However, for the
optional reporting of such amounts, see the
instruction for donated services in Part III.
Any unreimbursed expenses of officers,
employees, or volunteers do not belong on
the Form 990 or Form 990-EZ. See the
instructions for charitable contributions and
employee business expenses in Pub. 526
and 463, respectively.
3. Section 501(c)(9), (17), and (18)
organizations. These organizations
provide participants with life, sickness,
accident, welfare and unemployment
insurance, pension(s), or similar benefits, or
a combination of these benefits. When such
an organization receives payments from
participants, or their employers, to provide
these benefits, report the payments on line 2
as program service revenue, rather than on
line 1 as contributions.

C. How to value noncash
contributions
See General Instruction L and Schedule B
(Form 990, 990-EZ, or 990-PF).

D. Schedule of contributors
Attach Schedule B (Form 990, 990-EZ, or
990-PF). See General Instruction L and the
Specific Instructions for Completing the
Heading of Form 990-EZ, Item H.

Line 2—Program Service Revenue
Including Medicare, Medicaid
Payments, and Government Fees
and Contracts
Enter the total program service revenue
(exempt function income). Program services
are primarily those that form the basis of an
organization’s exemption from tax.
1. Examples. A clinic would include on line
2 all of its charges for medical services
(whether to be paid directly by the patients
or through Medicare, Medicaid, or other
third-party reimbursement), laboratory fees,
and related charges for services.
Program service revenue also includes
tuition received by a school; revenue from
admissions to a concert or other performing
arts event or to a museum; royalties
received as author of an educational
publication distributed by a commercial
publisher; payments received by a section
501(c)(9) organization from participants or
employers of participants for health and
welfare benefits coverage; and registration
fees received in connection with a meeting
or convention.
2. Program-related investment income.
Program service revenue also includes
income from program-related investments.
These investments are made primarily to
accomplish an exempt purpose of the
investing organization rather than to
produce income. Examples are scholarship
loans and low-interest loans to charitable
organizations, indigents, or victims of a
disaster. Rental income received from an
exempt function is another example of
program-related investment income. See
also the instructions for line 4.
3. Unrelated trade or business activities.
Unrelated trade or business activities (not
including any special events or activities)
that generate fees for services may also be
program service activities. A social club, for
example, should report as program service
revenue the fees it charges both members
and nonmembers for the use of its tennis
courts and golf course.
4. Government fees and contracts.
Program service revenue includes income
earned by the organization for providing a
government agency with a service, facility,
or product that benefited that government
agency directly rather than benefiting the
public as a whole. See line 1, instruction A8,
for reporting guidelines when payments are
received from a government agency for
providing a service, facility, or product for
the primary benefit of the general public.

generally provide benefits with a reasonable
relationship to dues, although benefits to
members may be indirect.

B. Examples of membership
benefits
These include subscriptions to publications;
newsletters (other than one about the
organization’s activities only); free or
reduced-rate admissions to events the
organization sponsors; use of its facilities;
and discounts on articles or services that
both members and nonmembers can buy. In
figuring the value of membership benefits,
disregard such intangible benefits as the
right to attend meetings, vote, or hold office
in the organization, and the distinction of
being a member of the organization.

C. What is not included on line 3
1. Dues or assessments received that
exceed the value of available
membership benefits. Whether or not
membership benefits are used, dues
received by an organization, to the extent
they exceed the monetary value of the
membership benefits available to the dues
payer, are a contribution that should be
reported on line 1.
2. Dues received primarily for the
organization’s support. If a member pays
dues primarily to support the organization’s
activities, and not to obtain benefits of more
than nominal monetary value, those dues
are a contribution to the organization
includible on line 1.

Line 4—Investment Income
A. What is included on line 4

Enter members’ and affiliates’ dues and
assessments that are not contributions. See
also General Instruction L.

1. Interest on savings and temporary
cash investments. Include the amount of
interest received from interest-bearing
checking accounts, savings, and temporary
cash investments, such as money market
funds, commercial paper, certificates of
deposit, and U.S. Treasury bills or other
governmental obligations that mature in less
than 1 year. So-called dividends or earnings
received from mutual savings banks, money
market funds, etc., are actually interest and
should be included on this line.
2. Dividends and interest from securities.
Include the amount of dividend and interest
income from equity and debt securities
(stocks and bonds) on this line. Include
amounts received from payments on
securities loans, as defined in section
512(a)(5).
3. Gross rents. Include gross rental income
received during the year from investment
property.
4. Other investment income. Include, for
example, royalty income from mineral
interests owned by the organization.

A. What is included on line 3

B. What is not included on line 4

1. Dues and assessments received that
compare reasonably with the benefits of
membership. When the organization
receives dues and assessments that
compare reasonably with membership
benefits, report such dues and assessments
on line 3.
2. Organizations that generally match
dues and benefits. Organizations
described in section 501(c)(5), (6), or (7)

1. Capital gains dividends and unrealized
gains and losses. Do not include on this
line any capital gains dividends. They are
reported on line 5. Also do not include
unrealized gains and losses on investments
carried at market value. See the instructions
for line 20.
2. Exempt function revenue (program
service). Do not include on line 4 amounts
that represent income from an exempt

Line 3—Membership Dues and
Assessments

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Specific Instructions for Form 990-EZ

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function (program service). Report these
amounts on line 2 as program service
revenue. Report expenses related to this
income on lines 12 through 16.
An organization whose exempt purpose
is to provide low-rental housing to persons
with low income receives exempt function
income from such rentals. An organization
receives exempt function income if it rents
or sublets rental space to a tenant whose
activities are related to the reporting
organization’s exempt purpose. Exempt
function income also arises when an
organization rents to an unaffiliated exempt
organization at less than fair rental value for
the purpose of helping that unaffiliated
organization carry out its exempt purpose.
Report rental income received in these
instances on line 2 and not on line 4.
Only for purposes of completing this
return, treat income from renting property to
affiliated exempt organizations as exempt
function income and include such income on
line 2 as program service revenue.

Lines 5a through 5c —Gains (or
Losses) From Sale of Assets Other
Than Inventory
A. What is included on line 5
Report on line 5a all sales of securities and
sales of all other types of investments (such
as real estate, royalty interests, or
partnership interests) as well as sales of all
other noninventory assets (such as
program-related investments and fixed
assets used by the organization in its related
and unrelated activities).
Total the cost or other basis (less
depreciation) and selling expenses and
enter the result on line 5b. On line 5c, enter
the net gain or loss. Report capital gains
dividends, the organization’s share of capital
gains and losses from a partnership, and
capital gains distributions from trusts on
lines 5a and 5c. Indicate the source on the
schedule described below.
For this return, the organization may use
the more convenient way to figure the
organization’s gain or loss from sales of
securities by comparing the sales price with
the average-cost basis of the particular
security sold. However, generally the
average-cost basis is not used to figure the
gain or loss from sales of securities
reportable on Form 990-T.

B. What is not included on line 5
Do not include on line 5 any unrealized
gains or losses on securities that are carried
in the books of account at market value. See
the instructions for line 20.

C. Attached schedule
1. Nonpublicly traded securities and
noninventory items. Attach a schedule to
show the sale or exchange of nonpublicly
traded securities and the sale or exchange
of other assets that are not inventory items.
The schedule should show security
transactions separately from the sale of
other assets. Show for these assets:
• Date acquired and how acquired,
• Date sold and to whom sold,
• Gross sales price,
• Cost, other basis, or if donated, value at
time acquired (state which),

Specific Instructions for Form 990-EZ

• Expense of sale and cost of
improvements made after acquisition, and
• Depreciation since acquisition, if
depreciable property.
2. Publicly traded securities. For sales of
publicly traded securities through a broker,
the organization may total the gross sales
price, the cost or other basis, and the
expenses of sale, and report lump-sum
figures in place of providing the detailed
reporting required in the above paragraph.
Publicly traded securities include
common and preferred stocks, bonds
(including governmental obligations), and
mutual fund shares that are listed and
regularly traded in an over-the-counter
market or on an established exchange and
for which market quotations are published or
otherwise readily available.
Lines 6a through 6c —Special
Events and Activities
On the appropriate line, enter the gross
revenue, expenses, and net income (or loss)
from all special events and activities, such
as dinners, dances, carnivals, raffles, bingo
games, other gaming activities, and
door-to-door sales of merchandise.
These activities only incidentally
accomplish an exempt purpose. Their sole
or primary purpose is to raise funds that are
other than contributions to finance the
organization’s exempt activities.
This is done by offering goods or
services that have more than a nominal
value (compared to the price charged) for a
payment that is more than the direct cost of
those goods or services. See line 1
instructions A1 and A2 for a discussion on
contributions reportable on line 1 and
revenue reportable on line 6. See also
General Instruction L.
Calling any required payment a donation
or contribution on tickets, advertising, or
solicitation materials does not change how
these payments should be reported on Form
990-EZ.
The gross revenue from gaming activities
and other special events must be reported in
the right-hand column on line 6a without
reduction for cash or noncash prizes, cost of
goods sold, compensation, fees, or other
expenses. Be sure to check the box for
gaming if the organization conducted
directly, or through the promoter, any
amount of gaming during the year.
Gaming includes (but is not limited to):
bingo, pull tabs, instant bingo 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.

A. What is included on line 6
1. Gross revenue/contributions. When an
organization receives payments for goods or
services offered through a special event,
enter:
1. As gross revenue, on line 6a (in the
right-hand column), the retail value of the
goods or services,

-49-

2. As a contribution, on both line 1 and
line 6a (within the parentheses), any amount
received that exceeds the retail value of the
goods or services given.
Example. At a special event, an
organization received $100 in gross receipts
for goods valued at $40. The organization
entered gross revenue of $40 on line 6a and
entered a contribution of $60 on both line 1
and within the parentheses on line 6a. The
contribution was the difference between the
gross revenue of $40 and the gross receipts
of $100.
2. Raffles or lotteries. Report as revenue,
on line 6a, any amount received from raffles
or lotteries that require payment of a
specified minimum amount for each entry,
unless the prizes awarded have only
nominal value. See line 6, instruction B1 and
B2, below.
3. Direct expenses. Report on line 6b only
the direct expenses attributable to the goods
or services the buyer receives from a
special event. If the organization includes an
expense on line 6b, do not report it again on
line 7b. Report cost of goods related to the
sale of inventory on line 7b. Fundraising
expenses attributable to contributions
reported on line 6a (within the parentheses),
and also on line 1, are reportable on lines 12
through 16.

B. What is not included on line 6
1. Sales or gifts of goods or services of
only nominal value. If the goods or
services offered at the special event have
only nominal value, include all of the
receipts as contributions on line 1 and all of
the related expenses on lines 12 through 16.
See General Instruction L for a description
of nominal or insubstantial benefits.
2. Sweepstakes, raffles, and lotteries.
Report as a contribution, on line 1, the
proceeds of solicitation campaigns in which
the names of contributors and other
respondents are entered in a drawing for
prizes.
When a minimum payment is required for
each raffle or lottery entry and prizes of only
nominal value are awarded, report any
amount received as a contribution. Report
the related expenses on lines 12 through 16.
3. Activities that generate only
contributions are not special events. An
activity that generates only contributions,
such as a solicitation campaign by mail, is
not a special event. Any amount received
should be included on line 1 as a
contribution. Related expenses are
reportable on lines 12 through 16.

C. Attached schedule
Attach a schedule listing the three largest
fundraising events, as measured by gross
receipts. If gaming is conducted, treat
different types of gaming separately to
determine the three largest events. For
example, treat bingo and pull tabs as
separate fundraising events. Describe each
of these events by listing the type of event
and the number of occasions that the event
occurred and show (for each event):
1. Gross receipts,
2. Contributions included in gross
receipts (see line 6, instruction A1, above),
3. Gross revenue (gross receipts less
contributions),

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4. Direct expenses, and
5. Net income or (loss) (gross revenue
less direct expenses).
For gaming, direct expenses include: cash
and noncash prizes, compensation to bingo
callers and workers, rental of gaming
equipment, cost of bingo supplies such as
pull tab deals, etc.
Furnish the same information, in total
figures, for all other special events held that
are not among the largest three. Indicate the
type and number of the events not listed
individually (for example, three dances and
two raffles).
An example of this schedule of special
events might appear in columnar form as
follows:
Special Events (and the
number of occasions that
the event occurred):

(A)
#

Gross Receipts

(B)
#

(C) All Total
# Other

$xx

$xx

$xx

$xx

$xx

Less: Contributions

xx

xx

xx

xx

xx

Gross Revenue

xx

xx

xx

xx

xx

Less: Direct Expenses

xx

xx

xx

xx

xx

$xx

$xx

$xx

$xx

$xx

Net Income or (loss)

If the organization uses this format,
report the total for Contributions on line 1 of
Form 990-EZ and on line 6a (within the
parentheses). Report the totals for Gross
Revenue, in the right-hand column, on line
6a; Direct Expenses on line 6b; and Net
Income or (loss) on line 6c.

Lines 7a through 7c —Gross Sales
of Inventory
1. Sales of inventory. Include on line 7a
the gross sales (less returns and
allowances) of inventory items, whether the
sales activity is an exempt function or an
unrelated trade or business. Include all
inventory sales except sales of goods at
special events, which are reportable on line
6.
2. Cost of goods sold. On line 7b, report
the cost of goods sold related to sales of
such inventory. The usual items included in
cost of goods sold are direct and indirect
labor, materials and supplies consumed,
freight-in, and a proportion of overhead
expenses. Marketing and distribution
expenses are not includible in cost of goods
sold. Include those expenses on lines 12
through 16.
3. Investments. Do not include on line 7
sales of investments on which the
organization expected to profit by
appreciation and sale. Report sales of these
investments on line 5.

Line 8—Other Revenue
Enter the total income from all sources not
covered by lines 1 through 7. Examples of
types of income includible on line 8 are
interest on notes receivable not held as
investments or as program-related
investments (defined in the line 2
instructions); interest on loans to officers,
directors, trustees, key employees, and
other employees; and royalties that are not
investment income or program service
revenue.

Line 10—Grants and Similar
Amounts Paid
Reporting for line 10 in accordance with
SFAS 116, is acceptable for Form 990-EZ

purposes, but not required by IRS. However,
see General Instruction E.
An organization that makes a grant to be
paid in future years should, according to
SFAS 116, report the grant’s present value
on line 10. Accruals of present value
increments to the unpaid grant should also
be reported on line 10 in future years.

A. What is included on line 10
Enter the amount of actual grants and
similar amounts paid to individuals and
organizations selected by the filing
organization. Include scholarship,
fellowship, and research grants to
individuals.
1. Specific assistance to individuals.
Include on this line the amount of payments
to, or for the benefit of, particular clients or
patients, including assistance by others at
the expense of the filing organization.
2. Payments, voluntary awards, or grants
to affiliates. Include on line 10 certain
types of payments to organizations affiliated
with (closely related to) the reporting
organization. These payments include
predetermined quota support and dues
payments by local organizations to their
state or national organizations.
If the organization uses Form
990-EZ for state reporting purposes,
CAUTION be sure to distinguish between
payments to affiliates and awards and
grants. See General Instruction E.

!

B. What is not included on line 10
1. Administrative expenses. Do not
include on this line expenses made in
selecting recipients or monitoring
compliance with the terms of a grant or
award. Enter those expenses on lines 12
through 16.
2. Purchases of goods or services from
affiliates. Do not report the cost of goods or
services purchased from affiliates on line 10.
Report these as expenses on lines 12
through 16.
3. Membership dues paid to another
organization. Report membership dues
that the organization pays to another
organization for general membership
benefits, such as regular services,
publications, and materials on line 16, as
Other expenses.

C. Attached schedule
Attach a schedule to explain the amounts
reported on line 10. Show on this schedule:
• Each class of activity,
• The grantee’s name and address,
• The amount given, and
• The relationship of the grantee (in the
case of grants to individuals) if the
relationship is by blood, marriage, adoption,
or employment (including employees’
children) to any person or corporation with
an interest in the organization, such as a
creator, donor, director, trustee, officer, etc.
Any grants reported on line 10 that were
approved during the year, but not paid by
the due date for filing Form 990-EZ
(including extensions), must be identified
and listed separately in the line 10 schedule.
Give the name and address of each
affiliate that received any payment reported
on line 10. Specify both the amount and
purpose of these payments.

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Classify activities on this schedule in
more detail than by using such broad terms
as charitable, educational, religious, or
scientific. For example, identify payments to
affiliates; payments for nursing services;
fellowships; or payments for food, shelter, or
medical services for indigents or disaster
victims. For payments to indigent families,
do not identify the individuals.
If an organization gives property other
than cash and measures an award or grant
by the property’s fair market value, also
show on this schedule:
• A description of the property,
• The book value of the property,
• How the organization determined the
book value,
• How the organization determined the fair
market value, and
• The date of the gift.
Any difference between a property’s fair
market value and book value should be
recorded in the organization’s books of
account and on line 20.
Colleges, universities, and primary and
secondary schools are not required to list
the names of individuals who were provided
scholarships or other financial assistance
whether they are the recipients of Federal
grant money or not. Instead, these
organizations must (a) group each type of
financial aid provided; (b) indicate the
number of individuals who received the aid;
and (c) specify the aggregate dollar amount.

Line 11—Benefits Paid To or For
Members
For an organization that gives benefits to
members or dependents (such as
organizations exempt under section
501(c)(8), (9), or (17)), enter the amounts
paid for: (a) death, sickness, hospitalization,
or disability benefits; (b) unemployment
compensation benefits; and (c) other
benefits. Do not include, on this line, the
cost of employment-related benefits the
organization gives its officers and
employees. Report them on line 12.

Line 12—Salaries, Other
Compensation, and Employee
Benefits
Enter the total salaries and wages paid to all
employees and the fees paid to officers,
directors, and trustees. Include the total of
the employer’s share of the contributions the
organization paid to qualified and
nonqualified pension plans and the
employer’s share of contributions to
employee benefit programs (such as
insurance, health, and welfare programs)
that are not an incidental part of a pension
plan. Complete the Form 5500 return if the
organization is required to file it.
Also include in the total the amount of
federal, state, and local payroll taxes for the
year that are imposed on the organization
as an employer. This includes the
employer’s share of social security and
Medicare taxes, Federal unemployment tax
(FUTA), state unemployment compensation
tax, and other state and local payroll taxes.
Taxes withheld from employees’ salaries
and paid over to the various governmental
units (such as Federal and state income
taxes and the employees’ share of social
security and Medicare taxes) are part of the
employees’ salaries included on line 12.

Specific Instructions for Form 990-EZ

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Report expenses paid or incurred for
employee events such as a picnic or holiday
party on this line.

Line 13—Professional Fees and
Other Payments to Independent
Contractors
Enter the total amount of legal, accounting,
auditing, other professional fees (such as
fees for fundraising or investment services)
and related expenses charged by outside
firms and individuals who are not employees
of the organization. Do not include any
penalties, fines, or judgments imposed
against the organization as a result of legal
proceedings. Report and identify those
expenses on line 16. Report fees paid to
directors and trustees on line 12.

Line 14—Occupancy, Rent,
Utilities, and Maintenance
Enter the total amount paid or incurred for
the use of office space or other facilities,
heat, light, power, and other utilities, outside
janitorial services, mortgage interest, real
estate taxes and property insurance
attributable to rental property, and similar
expenses. Do not subtract from rental
expenses reported on line 14 any rental
income received from renting or subletting
rented space. See the instructions for lines 2
and 4 to determine whether such income is
reportable as exempt function income or
investment income. However, report on line
14 any rental expenses for rental income
reported on lines 2 and 4. If the organization
records depreciation on property it occupies,
enter the total for the year.
For an explanation of acceptable
methods for computing depreciation, see
Pub. 946.

Line 15—Printing, Publications,
Postage, and Shipping
Enter the printing and related costs of
producing the reporting organization’s own
newsletters, leaflets, films, and other
informational materials on this line. Include
the costs of outside mailing services on this
line. Also include the cost of any purchased
publications as well as postage and shipping
costs not reportable on lines 5b, 6b, or 7b.
Do not include any expenses, such as
salaries, for which a separate line is
provided.

Line 16—Other Expenses
Include here such expenses as penalties,
fines, and judgments; unrelated business
income taxes; insurance and real estate
taxes not attributable to rental property or
reported as occupancy expenses;
depreciation on investment property; travel
and transportation costs; interest expense;
and expenses for conferences, conventions,
and meetings.

Line 19—Net Assets or Fund
Balances at Beginning of Year
Enter the amount from the prior year’s
balance sheet or from Form 5500 or an
approved DOL form if General Instruction F
applies.

Line 20—Other Changes in Net
Assets or Fund Balances
Attach a statement explaining any changes
in net assets or fund balances between the
beginning and end of the year that are not
accounted for by the amount on line 18.
Amounts to report here include adjustments
of earlier years’ activity; unrealized gains
and losses on investments carried at market
value; and any difference between fair
market value and book value of property
given as an award or grant. See General
Instruction G regarding the reporting of a
section 481(a) adjustment to conform to
SFAS 116.

Part II—Balance Sheets

Part III—Statement of Program
Service Accomplishments
A program service is a major (usually
ongoing) objective of an organization, such
as adoptions, recreation for the elderly,
rehabilitation, or publication of journals or
newsletters.
Step

State the organization’s primary exempt
purpose.

2

All organizations must describe their
exempt purpose achievements for each
of their four largest program services (as
measured by total expenses incurred). If
there were four or fewer of such activities,
describe each program service activity.
• Describe program service
accomplishments through measurements
such as clients served, days of care,
therapy sessions, or publications issued.
• Describe the activity’s objective, for both
this time period and the longer-term goal,
if the output is intangible, such as in a
research activity.
• Give reasonable estimates for any
statistical information if exact figures are
not readily available. Indicate that this
information is estimated.

Line 22—Cash, Savings, and
Investments
Include all interest and non-interest bearing
accounts such as petty cash funds,
checking accounts, savings accounts,
money market funds, commercial paper,
certificates of deposit, U.S. Treasury bills,
and other government obligations. Also
include the book value of securities held as
investments, and all other investment
holdings including land and buildings held
for investment. Report the income from
these investments on line 4.

• Be clear, concise, and complete in the
description. Avoid adding an attachment.
3

Line 23—Land and Buildings

Line 24—Other Assets

• For all other organizations, completing
the Program Services Expenses column
(and the Grants entry) in Part III is
optional.

Enter the total of other assets along with a
description of those assets. Amounts to
include here are (among others) receivable
accounts, inventories, and prepaid
expenses.

Line 18—Excess or (Deficit) for the
Year

Line 27—Net Assets or Fund
Balances

Enter the difference between lines 9 and 17.
If line 17 is more than line 9, enter the
difference in parentheses.

Subtract line 26 (total liabilities) from line 25
(total assets) to determine net assets. Enter
this net asset amount on line 27. The

Enter the amount of total assets. If the
end-of-year total assets entered in column
(B) are $250,000 or more, Form 990 must
be filed instead of Form 990-EZ.

-51-

If part of the total expenses of any
program service consists of grants
reported on line 10, enter the amount of
grants in the space provided and include
the grants in the Expenses column. If the
amount of grants entered includes foreign
grants, check the box to the left of the
entry space for Program Services
Expenses.
• Section 501(c)(3) and (4) organizations,
and section 4947(a)(1) nonexempt
charitable trusts, must show the amount
of grants and allocations to others and
must enter the total expenses for each
program service reported.

Enter the book value (cost or other basis
less accumulated depreciation) of all land
and buildings owned by the organization
and not held for investment.

Line 25—Total Assets

Action

1

All organizations, except those that meet
one of the exceptions in General Instruction
F, must complete columns (A) and (B) of
Part II of the return and may not submit a
substitute balance sheet. Failure to
complete Part II may result in penalties for
filing an incomplete return. If there is no
amount to report in column (A), Beginning of
year, put a zero in that column. See General
Instruction K.
Some states require more information.
See General Instruction E for more
information about completing a Form
990-EZ to be filed with any state or local
government agency.

Some states that accept Form 990-EZ in
satisfaction of their filing requirements may
require that certain types of miscellaneous
expenses be itemized. See General
Instruction E.

Specific Instructions for Form 990-EZ

amount entered in column (B) should agree
with the net asset or fund balance amount
on line 21.
States that accept Form 990-EZ as their
basic report form may require a separate
statement of changes in net assets. See
General Instruction E.

4

Attach a schedule that lists the
organization’s other program services.
• The detailed information required for the
four largest services is not necessary for
this schedule.
• However, section 501(c)(3) and (4)
organizations, and section 4947(a)(1)
nonexempt charitable trusts must show
the expenses attributable to their program
services.

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5

The organization may show the amount
of any donated services, or use of
materials, equipment, or facilities it
received or utilized in connection with a
specific program service.
• Disclose the applicable amounts of any
donated services, etc., on the lines for the
narrative description of the appropriate
program service.
• Do not include these amounts in the
expense column in Part III.
• See the instructions for line 1, B2.

Part IV—List of Officers,
Directors, Trustees, and Key
Employees
List each person who was an officer,
director, trustee, or key employee (defined
below) of the organization at any time during
the year even if they did not receive any
compensation from the organization.
For purposes of reporting all amounts in
columns (B) through (E) in Part IV, either
use the organization’s tax year, or the
calendar year ending within such tax year.
Enter a zero in columns (B), (C), (D), or
(E) if no hours were entered in column (B)
and no compensation, contributions,
expenses, and other allowances were paid
during the reporting year, or deferred for
payment to a future accounting period.
Aid in the processing of the
organization’s return by grouping together,
preferably at the end of the list, those who
received no compensation. Be careful not to
repeat names.
Give the preferred address at which
officers, directors, etc., want the Internal
Revenue Service to contact them.
Use an attachment if there are more than
four persons to list in Part IV.
Show all forms of cash and noncash
compensation received by each listed
officer, director, etc., whether paid currently
or deferred.
If the organization pays any other
person, such as a management services
company, for the services provided by any
of its officers, directors, trustees, or key
employees, report the compensation and
other items in Part IV as if the organization
had paid the officers, directors, etc., directly.
Also, see Ann. 2001-33, 2001-17 I.R.B.
1137.
A failure to fully complete Part IV can
subject both the organization and the
individuals responsible for such failure to
penalties for filing an incomplete return. See
General Instruction K. In particular, entering
the phrase on Part IV, “Information available
upon request,” or a similar phrase, is not
acceptable.
The organization may also provide an
attachment to explain the entire 2006
compensation package for any person listed
in Part IV.
Key employee. A key employee is any
person having responsibilities or powers
similar to those of officers, directors, or
trustees. The term includes the chief
management and administrative officials of

an organization (such as an executive
director or chancellor).
A chief financial officer and the officer in
charge of the administration or program
operations are both key employees if they
have the authority to control the
organization’s activities, its finances, or
both.

Column (A)
Report the name and address of each
person who was a current officer, director,
trustee, or key employee (defined above),
during the tax year or, if using the calendar
year, at any time during the calendar year or
tax year.

Column (B)
In column (B), a numerical estimate of the
average hours per week devoted to the
position is required for a complete answer.
Statements such as “as needed” or “as
required,” or “40+” are unacceptable.

Column (C)
For each person listed, report salary, fees,
bonuses, and severance payments paid.
Include current-year payments of amounts
reported or reportable as deferred
compensation in any prior year.

Column (D)
Include in this column all forms of deferred
compensation and future severance
payments (whether or not funded; whether
or not vested; and whether or not the
deferred compensation plan is a qualified
plan under section 401(a)). Include also
payments to welfare benefit plans on behalf
of the officers, etc. Such plans provide
benefits such as medical, dental, life
insurance, severance pay, disability, etc.
Reasonable estimates may be used if
precise cost figures are not readily available.
Unless the amounts were reported in
column (C), report, as deferred
compensation in column (D), salaries and
other compensation earned during the
period covered by the return, but not yet
paid by the date the organization files its
return.

Column (E)
Enter both taxable and nontaxable fringe
benefits (other than de minimis fringe
benefits described in section 132(e)).
Include amounts that the recipients must
report as income on their separate income
tax returns. Examples include amounts for
which the recipient did not account to the
organization or allowances that were more
than the payee spent on serving the
organization. Include payments made under
indemnification arrangements, the value of
the personal use of housing, automobiles, or
other assets owned or leased by the
organization (or provided for the
organization’s use without charge), as well
as any other taxable and nontaxable fringe
benefits. See Pub. 525 for more information.
Form 941 must be filed to report income
tax withholding and social security and
Medicare taxes. The organization must also
file Form 940 to report Federal
unemployment tax, unless the organization
is not subject to these taxes. See Pub. 15
(Circular E) for more information. See also
the Trust Fund Recovery Penalty discussion
in General Instruction D.

-52-

Part V—Other Information

• Section 501(c)(3) organizations and

section 4947(a)(1) nonexempt charitable
trusts must also complete and attach a
Schedule A (Form 990 or 990-EZ) to their
Form 990-EZ. See General Instruction D for
information on Schedule A (Form 990 or
990-EZ).
• Answer “Yes,” “No,” or “N/A” to each
question.
• The organization must attach a statement
regarding personal benefit contracts. See
General Instruction V.

Line 33—Change in Activities
Attach a statement to explain any changes
during the past 3 years in the activities the
organization conducts to further its exempt
purpose, or in the methods of conducting
these activities. However, if a change has
been reported to the IRS on a previously
filed attachment, do not report the change
again. An activity previously listed as current
or planned in the organization’s application
for recognition of exemption does not have
to be reported unless the method of
conducting such activity has changed. Also,
include any major program activities that are
being discontinued.

Line 34—Changes in Organizing
or Governing Documents
Attach a conformed copy of any changes to
the articles of incorporation, or association,
constitution, trust instrument, or other
organizing document, or to the bylaws or
other governing document.
A conformed copy is one that agrees
with the original document and all
amendments to it. If the copies are not
signed, they must be accompanied by a
written declaration signed by an officer
authorized to sign for the organization,
certifying that they are complete and
accurate copies of the original documents.
Photocopies of articles of incorporation
showing the certification of an appropriate
state official need not be accompanied by
such a declaration. See Rev. Proc. 68-14,
1968-1 C.B. 768, for details. When a
number of changes are made, attach a copy
of the entire revised organizing instrument
or governing document.
However, if the exempt organization
changes its legal structure, such as from a
trust to a corporation, it must file a new
exemption application to establish that the
new legal entity qualifies for exemption.

Line 35—Unrelated Business
Income and Lobbying Proxy Tax
Unrelated Business Income
Political organizations described in section
527 are not required to answer this
question.
Check “Yes” on line 35a if the
organization’s total gross income from all of
its unrelated trades and businesses is
$1,000 or more for the year. Gross income
is gross receipts less the cost of goods sold.
See Pub. 598 for a description of unrelated
business income and the 2006 Instructions
for Form 990-T for the Form 990-T filing
requirements. Form 990-T is not a substitute
for Form 990-EZ. Items of income and
expense reported on Form 990-T must also

Specific Instructions for Form 990-EZ

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be reported on Form 990-EZ when the
organization is required to file both forms.
All tax-exempt organizations must
pay estimated taxes with respect to
CAUTION their unrelated business income if
they expect their tax liability to be $500 or
more. Use Form 990-W to compute this tax.

!

Section 6033(e) tax for lobbying
expenditures
If the organization checks “No” to line 35a, it
is certifying that the organization was not
subject to the notice and reporting
requirements of section 6033(e) and that the
organization had no lobbying and political
expenditures potentially subject to the proxy
tax.
Section 6033(e) notice and reporting
requirements and proxy tax. Section
6033(e) requires certain section 501(c)(4),
(5), and (6) organizations to tell their
members the portion of their membership
dues that were allocable to the political or
lobbying activities of the organization. If an
organization does not give its members this
information, then the organization is subject
to a proxy tax. The tax is reported on Form
990-T.
If the organization checks “Yes” on line
35a to declare that it had reportable section
6033(e) lobbying and political expenses in
the 2006 reporting year (and potential
liability for the proxy tax):
1. Complete lines 85a-h, page 7, of
Form 990 (note instructions), and
2. Attach page 7 to Form 990-EZ.
Only certain organizations that are tax
exempt under sections:
• 501(c)(4) (social welfare organizations),
• 501(c)(5) (agricultural and horticultural
organizations), or
• 501(c)(6) (business leagues)
are subject to (a) the section 6033(e) notice
and reporting requirements, and (b) a
potential proxy tax.
If the organization is not tax-exempt
under sections 501(c)(4), (5), or (6), check
“No” on line 35a, unless there was
unrelated business income.
If the organization meets Exception 1 or
2 below, it is excluded from the notice,
reporting, and proxy tax requirements of
section 6033(e), and it should check “No” to
line 35a, unless the organization had $1,000
or more of unrelated business income. See
also Rev. Proc. 98-19, 1998-1 C.B. 547.
Exception 1. Section 6033(e)(3) exception
for nondeductible dues.
1. All organizations exempt from tax
under section 501(a), other than section
501(c)(4), (5), and (6) organizations.
2. Local associations of employees’ and
veterans’ organizations described in section
501(c)(4), but not section 501(c)(4) social
welfare organizations.
3. Labor unions and other labor
organizations described in section 501(c)(5),
but not section 501(c)(5) agricultural and
horticultural organizations.
4. Section 501(c)(4), (5), and (6)
organizations that receive more than 90% of
their dues from:
a. Section 501(c)(3) organizations,
b. State or local governments,
c. Entities whose income is exempt from
tax under section 115, or

Specific Instructions for Form 990-EZ

d. Organizations described in 1 through
3, above.
5. Section 501(c)(4) and (5)
organizations that receive more than 90% of
their annual dues from:
a. Persons,
b. Families, or
c. Entities
who each paid annual dues of $91 or less in
2006 (adjusted annually for inflation). See
Rev. Proc. 2005-70, 2005-47 I.R.B. 979.
6. Any organization that receives a
private letter ruling from the IRS stating that
the organization satisfies the section
6033(e)(3) exception.
7. Any organization that keeps records
to substantiate that 90% or more of its
members cannot deduct their dues (or
similar amounts) as business expenses
whether or not any part of their dues are
used for lobbying purposes.
8. Any organization that is not a
membership organization.
Special rules treat affiliated social
welfare organizations, agricultural
CAUTION and horticultural organizations, and
business leagues as parts of a single
organization for purposes of meeting the
nondeductible dues exception. See Rev.
Proc. 98-19.

!

Exception 2. Section 6033(e)(1) $2,000
in-house lobbying exception. An
organization satisfies the $2,000 in-house
lobbying exception if it:
1. Did not receive a waiver for proxy tax
owed for the prior year.
2. Did not make any political
expenditures or foreign lobbying
expenditures during the 2006 reporting year,
3. Incurred lobbying expenses during
the 2006 reporting year consisting only of
in-house direct lobbying expenses totaling
$2,000 or less, but excluding:
a. Any allocable overhead expenses,
and
b. All direct lobbying expenses of any
local council regarding legislation of direct
interest to the organization or its members.
Definitions.
Grassroots lobbying refers to attempts
to influence any segment of the general
public regarding legislative matters or
referendums.

In-house expenditures include:

• Salaries, and
• Other expenses of the organization’s

officials and staff (including amounts paid or
incurred for the planning of legislative
activities).
In-house expenditures do not include:
• Any payments to other taxpayers
engaged in lobbying or political activities as
a trade or business.
• Any dues paid to another organization
that are allocable to lobbying or political
activities.

Line 36—Liquidation, Dissolution,
Termination, or Substantial
Contraction
If there was a liquidation, dissolution,
termination, or substantial contraction,
attach a statement explaining what took
place.
For a complete liquidation of a
corporation or termination of a trust, check
the Final return box in the heading of the
return. On the attached statement, show
whether the assets have been distributed
and the date. Also attach a certified copy of
any resolution, or plan of liquidation or
termination, etc., with all amendments or
supplements not already filed. In addition,
attach a schedule listing the names and
addresses of all persons who received the
assets distributed in liquidation or
termination; the kinds of assets distributed
to each one; and each asset’s fair market
value.
A substantial contraction is a partial
liquidation or other major disposition of
assets except transfers for full consideration
or distributions from current income.
A major disposition of assets is any
disposition for the tax year that is:
1. At least 25% of the fair market value
of the organization’s net assets at the
beginning of the tax year; or
2. One of a series of related dispositions
begun in earlier years that add up to at least
25% of the net assets the organization had
at the beginning of the tax year when the
first disposition in the series was made.
Whether a major disposition of assets took
place through a series of related
dispositions depends on the facts in each
case.
See Regulations section 1.6043-3 for
special rules and exceptions.

Direct lobbying includes attempting to
influence:
• Legislation through communication with
legislators and other government officials,
and
• The official actions or positions of covered
executive branch officials through direct
communication.

Political organizations described in
section 527 are not required to answer
this question.

Direct lobbying does not include
attempting to influence:
• Any local council on legislation of direct
interest to the organization or its members,
and
• The general public regarding legislative
matters (grassroots lobbying).

A political expenditure is one intended to
influence the selection, nomination, election,
or appointment of anyone to a federal, state,
or local public office, or office in a political
organization, or the election of Presidential
or Vice Presidential electors. It does not
matter whether the attempt succeeds.

Other lobbying includes:
Grassroots lobbying,
Foreign lobbying,
Third-party lobbying, and
Dues paid to another organization that
were used to lobby.

An expenditure includes a payment,
distribution, loan, advance, deposit, or gift of
money, or anything of value. It also includes
a contract, promise, or agreement to make
an expenditure, whether or not legally
enforceable.

•
•
•
•

-53-

Line 37—Expenditures for Political
Purposes

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All section 501(c) organizations. An
exempt organization that is not a political
organization must file Form 1120-POL if it is
treated as having political organization
taxable income under section 527(f)(1).
If a section 501(c) organization
establishes and maintains a section
527(f)(3) separate segregated fund, see the
specific instructions for line 81, Form 990.
Section 501(c)(3) organizations. A section
501(c)(3) organization will lose its
tax-exempt status if it engages in political
activity.
A section 501(c)(3) organization must
pay a section 4955 excise tax for any
amount paid or incurred on behalf of, or in
opposition to, any candidate for public office.
The organization must pay an additional
excise tax if it fails to correct the expenditure
timely.
A manager of a section 501(c)(3)
organization who knowingly agrees to a
political expenditure must pay a section
4955 excise tax, unless the agreement is
not willful and there is reasonable cause. A
manager who does not agree to a correction
of the political expenditure may have to pay
an additional excise tax.
When an organization promotes a
candidate for public office (or is used or
controlled by a candidate or prospective
candidate), amounts paid or incurred for the
following purposes are political
expenditures:
• Remuneration to such individual (a
candidate or prospective candidate) for
speeches or other services;
• Travel expenses of such individual;
• Expenses of conducting polls, surveys, or
other studies, or preparing papers or other
material for use by such individual;
• Expenses of advertising, publicity, and
fundraising for such individual; and
• Any other expense that has the primary
effect of promoting public recognition or
otherwise primarily accruing to the benefit of
such individual.
An organization is effectively controlled
by a candidate or prospective candidate
only if such individual has a continuing,
substantial involvement in the day-to-day
operations or management of the
organization.
A determination of whether the primary
purpose of an organization is promoting the
candidacy or prospective candidacy of an
individual for public office is made on the
basis of all the facts and circumstances. See
section 4955 and Regulations section
53.4955.
Use Form 4720 to figure and report
these excise taxes.

Line 38—Loans To or From
Officers, Directors, Trustees, and
Key Employees
Enter the end-of-year unpaid balance of
secured and unsecured loans made to or
received from officers, directors, trustees,
and key employees. For example, if the
organization borrowed $1,000 from one
officer and loaned $500 to another, none of
which has been repaid, report $1,500 on line
38b.
For loans outstanding at the end of the
year, attach a schedule as described below.
Report any interest expense on line 16 and

any interest income on line 2, 4, or 8,
depending on the nature of the receivable
that created the interest income.
When loans should be reported
separately. In the required schedule, report
each loan separately, even if more than one
loan was made to or received from the same
person, or the same terms apply to all loans
made. Salary advances and other advances
for the personal use and benefit of the
recipient, and receivables subject to special
terms or arising from nontypical
transactions, must be reported as separate
loans for each officer, director, trustee, and
key employee.
When loans should be reported as a
single total. In the required schedule,
report receivables that are subject to the
same terms and conditions (including credit
limits and rate of interest) as receivables
due from the general public (occurring in the
normal course of the organization’s
operations) as a single total for all the
officers, directors, trustees, and key
employees. Report travel advances for
official business of the organization as a
single total.
Schedule format. For each outstanding
loan or other receivable that must be
reported separately, the attached schedule
should show the following information
(preferably in columnar form):
• Borrower’s name and title,
• Original amount,
• Balance due,
• Date of note,
• Maturity date,
• Repayment terms,
• Interest rate,
• Security provided by the borrower,
• Purpose of the loan, and
• Description and fair market value of the
consideration furnished by the lender (for
example, cash — $1,000; or 100 shares of
XYZ, Inc., common stock — $9,000).
The above detail is not required for
receivables or travel advances that may be
reported as a single total. However, report
and identify those totals separately in the
attachment.

Line 39—Section 501(c)(7)
Organizations
Gross receipts test. A section 501(c)(7)
organization may receive up to 35% of its
gross receipts, including investment income,
from sources outside its membership and
remain tax-exempt. Part of the 35% (up to
15% of gross receipts) may be from public
use of a social club’s facilities.
Gross receipts are the club’s income
from its usual activities and include:
• Charges,
• Admissions,
• Membership fees,
• Dues,
• Assessments, and
• Investment income (such as dividends,
rents, and similar receipts), and normal
recurring capital gains on investments.
Gross receipts do not include:

• Capital contributions (see Regulations
section 1.118-1),

• Initiation fees, or
• Unusual amounts of income (such as the

sale of the clubhouse).

-54-

College fraternities or sororities or
other organizations that charge
CAUTION membership initiation fees, but not
annual dues, do include initiation fees in
their gross receipts.
If the 35% and 15% limits do not affect
the club’s exempt status, include the income
shown on line 39b on the club’s Form 990-T.
Investment income earned by a section
501(c)(7) organization is not tax-exempt
income unless it is set aside for:
• Religious,
• Charitable,
• Scientific,
• Literary,
• Educational purposes, or
• Prevention of cruelty to children or
animals.
If the combined amount of an
organization’s gross investment income and
other unrelated business income exceeds
$1,000, it must report the investment income
and other unrelated business income on
Form 990-T.
Nondiscrimination policy. A section
501(c)(7) organization is not exempt from
income tax if any written policy statement,
including the governing instrument and
bylaws, allows discrimination on the basis of
race, color, or religion.
However, section 501(i) allows social
clubs to retain their exemption under section
501(c)(7) even though their membership is
limited (in writing) to members of a particular
religion, if the social club:
1. Is an auxiliary of a fraternal
beneficiary society exempt under section
501(c)(8), and
2. Limits its membership to the
members of a particular religion; or the
membership limitation is:
a. A good-faith attempt to further the
teachings or principles of that religion, and
b. Not intended to exclude individuals of
a particular race or color.

!

Line 40a —Section 501(c)(3)
organizations: Disclosure of excise
taxes imposed under section 4911,
4912, or 4955
Section 501(c)(3) organizations must
disclose any excise tax imposed during the
year under section 4911 (excess lobbying
expenditures), 4912 (disqualifying lobbying
expenditures), or, unless abated, 4955
(political expenditures). See sections 4962
and 6033(b).

Line 40b —Section 501(c)(3) and
501(c)(4) organizations: Disclosure
of section 4958 excess benefit
transactions and excise taxes
Sections 6033(b) and 6033(f) require
section 501(c)(3) and (4) organizations to
report the amount of taxes imposed under
section 4958 (excess benefit transactions)
involving the organization, unless abated, as
well as any other information the Secretary
may require concerning those transactions.
See General Instruction P for a discussion
of excess benefit transactions.
Attach a statement describing any
excess benefit transaction, the disqualified
person or persons involved, and whether or
not the excess benefit transaction was
corrected.

Specific Instructions for Form 990-EZ

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Line 40c—Taxes imposed on
organization managers or
disqualified persons

during the tax year. See General Instruction
W for information about prohibited tax
shelter transactions.
If the organization answered “Yes,” it
must complete Form 8886-T.

For line 40c, enter the amount of taxes
imposed on organization managers or
disqualified persons under sections 4912,
4955, and 4958, unless abated.

Line 41—List of states
List each state with which the organization is
filing a copy of this return in full or partial
satisfaction of state filing requirements.

Line 40d—Taxes reimbursed by
the organization
For line 40d, enter the amount of tax on line
40c that was reimbursed by the
organization. Any reimbursement of the
excise tax liability of a disqualified person or
organization manager will be treated as an
excess benefit unless (1) the organization
treats the reimbursement as compensation
during the year the reimbursement is made,
and (2) the total compensation to that
person, including the reimbursement, is
reasonable.

Line 40e—Tax on Prohibited Tax
Shelter Transactions
Answer “Yes” if the organization was a party
to a prohibited tax shelter transaction as
described in section 4965(e) at any time

Line 42b—Foreign Financial
Accounts
Check the “Yes” box if either 1 or 2 below
applies:
1. At any time during the calendar year,
the organization had an interest in or
signature or other authority over a financial
account in a foreign country (such as a bank
account, securities account, or other
financial account); and
a. The combined value of the accounts
was more than $10,000 at any time during
the calendar year; and
b. The accounts were not with a U.S.
military banking facility operated by a U.S.
financial institution.

2. The organization owns more than
50% of the stock in any corporation that
would answer “Yes” to item 1 above.
If the “Yes” box is checked, enter the
name of the foreign country or countries.
Attach a separate sheet if more space is
needed. File Form TD F 90-22.1 by June 30,
2007, with the Department of the Treasury
at the address shown on the form.
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
www.irs.gov. Do not file it with the IRS or
attach it to Form 990-EZ.

Line 43—Section 4947(a)(1)
Nonexempt Charitable Trusts
Section 4947(a)(1) nonexempt charitable
trusts that file Form 990-EZ instead of Form
1041 must complete this line. The trust
should include exempt-interest dividends
received from a mutual fund or other
regulated investment company as well as
tax-exempt interest received directly.

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
the form

Preparing
the
form

Copying, assembling,
and sending the form
to the IRS

990

112 hr., 52 min.

990-EZ

29 hr., 10 min.

16 hr., 4 min.

22 hr., 20 min.

1 hr., 4 min.

11 hr., 33 min.

14 hr., 24 min.

Schedule A (Form 990 or 990-EZ)

75 hr., 19 min.

11hr., 37 min.

13 hr., 21 min.

32 min.
-0-

Schedule B (Form 990, 990-EZ, or
990-PF)

4 hr., 46 min.

1 hr., 23 min.

1 hr., 31 min.

-0-

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-6406, Washington, DC 20224.
Do not send the form to this address. Instead, see When, Where, and How To File in General Instruction H.

Specific Instructions for Form 990-EZ

-55-

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Index

A
Accounting:
Fees . . . . . . . . . . . . . . . . . . . . . . . . 30
Method . . . . . . . . . . . . . . . . . . . . . 46
Period . . . . . . . . . . . . . . . . . . . . . . . . 7
Accounting fees . . . . . . . . . . . . . . . 51
Accounting method . . . . . . . . 6, 7, 21
Accounting period . . . . . . . . . . . 21, 46
Accounts payable . . . . . . . . . . . . . . 33
Accounts receivable . . . . . . . . . . . . 31
Activities, change in . . . . . . . . . 37, 52
Address and name . . . . . . . . . . . . . 46
Address, change . . . . . . . . . . . . 21, 46
Address, Website . . . . . . . . . . . . . . 47
Administrative expenses . . . . . . . . 50
Affiliated organizations . . . . . . . . . 14
Affiliates . . . . . . . . . . . . . . . . . . . . . . 50
Expenses . . . . . . . . . . . . . . . . . . . 27
Payments . . . . . . . . . . . . . . . . . . . 26
Purchases . . . . . . . . . . . . . . . . . . 27
State or national
organizations . . . . . . . . . . . . . . 26
Voluntary awards or grants . . . 27
Allocations . . . . . . . . . . . . . . . . . . . . 28
Grants, and . . . . . . . . . . . . . . . . . 28
Alternate test . . . . . . . . . . . . . . . . . . . . 2
Amended returns . . . . . . . . . . 6, 8, 46
Analysis of Income-Producing
Activities . . . . . . . . . . . . . . . . . . . . 43
Anti-abuse rule . . . . . . . . . . . . . . . . . . 3
Applicable insurance
contract . . . . . . . . . . . . . . . . . . . . . 42
Applicable exempt
organization . . . . . . . . . . . . . . . 42
Application pending . . . . . . . . . . 3, 46
Assembling and completing Form
990 or Form 990-EZ . . . . . . 18-20
Assessments . . . . . . . . . . . 25, 40, 43
Assets . . . . . . . . . . . . . . 25, 33, 49, 51
Assets, net . . . . . . . . . . . . . . . . . 33, 51
Assistance to individuals . . . . . . . . 29
Attachments . . . . . . . . . . . . . . . . . . . 19
Audit guides . . . . . . . . . . . . . . . . . . . . . 6
B
Backup withholding . . . . . . . . . . . . 17
Balance sheets . . . . . . . . . . . . . 31, 51
Benefits:
Disregarded . . . . . . . . . . . . . . . . . 15
Employee . . . . . . . . . . . . . . . . . . . 50
Members . . . . . . . . . . . . . . . . . 29, 50
Bonds, tax-exempt . . . . . . . . . . . . . 33
Bonus, discretionary . . . . . . . . . . . 15
C
Capital stock accounts . . . . . . . . . 34
Capital surplus . . . . . . . . . . . . . . . . . 34
Cash . . . . . . . . . . . . . . . . . . . . . . 31, 51
Change of address . . . . . . . . . . 21, 46
Change of name . . . . . . . . . . . . 21, 46
Changes in net assets . . . . . . . . . . 51
Checklist for a properly completed
return . . . . . . . . . . . . . . . . . . . . . . . 20
Children, photographs of
missing . . . . . . . . . . . . . . . . . . . . . . . 2
Colleges and universities . . . . . . . 24
Commercial co-venture . . . . . . . . . 23
Compensation . . . . . . . 14, 15, 29, 50
Certain disqualified
persons . . . . . . . . . . . . . . . . . . . 29
Current officers . . . . . . . . . . . . . . 29
Disqualified persons . . . . . . . . . 29
Former officers . . . . . . . . . . . . . . 29
Other persons . . . . . . . . . . . . . . . 29
Completing the header . . . . . . 21, 46

Completing the return:
Rounding off to whole
dollars . . . . . . . . . . . . . . . . . . . . 18
Contemporaneous . . . . . . . . . . . . . 10
Contracts, initial . . . . . . . . . . . . . . . 15
Contributions . . . . . 8, 22, 23, 24, 25,
26, 38, 47, 48, 49
Acknowledgment . . . . . . . . . . . . . . 9
Co-venture . . . . . . . . . . . . . . . . . . 48
Definitions . . . . . . . . . . . . . . . . . . . . . 9
Direct public support . . . . . . . . . 23
Disclosure statement . . . . . . . . . . . 9
Donation of services . . . . . . . . . 23
Donor advised funds . . . . . . . . . 23
Fundraising records . . . . . . . . . . . . 8
Government . . . . . . . . . . . . . . . . . 48
Government grants . . . . . . . 23, 24
Grants . . . . . . . . . . . . . . . . . . . 23, 47
Indirect . . . . . . . . . . . . . . . . . . . . . 47
Indirect public support . . . . . . . . 24
Insubstantial value . . . . . . . . . . . . . 9
Membership dues . . . . . . . . . . . . 48
Noncash . . . . . . . . . . . . . . . . . . . . . . 8
Nondeductible . . . . . . . . . . . . . . . . . 8
Quid pro quo . . . . . . . . . . . 9, 10, 38
Special events . . . . . . . . . . . . . . . 26
Sponsoring organization . . . . . . 23
Substantiation and
disclosure . . . . . . . . . . . . . . . . . . . 9
Sweepstakes, raffles, and
lotteries . . . . . . . . . . . . . . . . . . . 26
Use of property . . . . . . . . . . . . . . 23
Contributors, schedule of . . . . . 8, 48
Controlled entities . . . . . . . . . . . . . . 44
D
Deferred charges . . . . . . . . . . . . . . 32
Deferred revenue . . . . . . . . . . . . . . 33
Definition, key employee . . . . . . . . 34
Depletion expense . . . . . . . . . . . . . 30
Depreciation expense . . . . . . . . . . 30
Direct expenses . . . . . . . . . . . . . . . 49
Direct public support . . . . . . . . . . . 23
Disclosure:
Contributions . . . . . . . . . . . . . . . . . . 9
Excess business holdings . . . . 42
Federal government material,
sale . . . . . . . . . . . . . . . . . . . . . . 13
Prohibited tax shelter
transactions . . . . . . . . . . . . . . . 17
Section 501(c)(3)
organizations . . . . . . . . . . . . . . 13
Services furnished . . . . . . . . . . . 13
Statement . . . . . . . . . . . . . . . . . . . 10
Transactions and
relationships . . . . . . . . . . . . . . 13
Disqualified persons . . . . . 13, 14, 42,
55
Disregarded benefits . . . . . . . . . . . 15
Disregarded entities . . . . . . . 3, 21, 44
Dissolution . . . . . . . . . . . . . . . . . 37, 53
Distributions:
Disqualified persons . . . . . . . . . 29
Dividends . . . . . . . . . . . . . . . . . . 25, 43
Documents, changes in
organizing . . . . . . . . . . . . . . . . 37, 52
Donations . . . . . . . . . . . . . . . . 6, 38, 48
Donor advised funds . . . . . . . . 14, 23
Disqualified person . . . . . . . . . . 42
Exception . . . . . . . . . . . . . . . . . . . 23
Excess benefit transaction . . . . 14
Excess business holdings . . . . 42
Grants . . . . . . . . . . . . . . . . . . . . . . 28
Sponsoring organization . . . . . . 23
Dues . . . . . . . . 25, 38, 39, 40, 43, 48
Membership . . . . . . . . . . . . . . 48, 50
Notices . . . . . . . . . . . . . . . . . . . . . 38
E
Electronic filing . . . . . . . . . . . . . . . . . . 7

Employee benefit plans (section
501(c)(9), (17), or (18)) . . . . . . . . . 6
Employee benefits . . . . . . . . . . . . . 30
Employees, key . . . . . . . . . . . . . . . . 52
Employer identification number
(EIN):
Disregarded entities . . . . . . . . . . 21
Section 501(c)(9)
organizations . . . . . . . . . . . 21, 46
Equipment . . . . . . . . . . . . . . . . . . . . 33
Erroneous backup
withholding . . . . . . . . . . . . . . . . . . 17
Excess benefit
transaction . . . . . . . . 13-17, 14, 42
Churches . . . . . . . . . . . . . . . . . . . 16
Correction . . . . . . . . . . . . . . . . . . . 16
Donor advised funds . . . . . . 14, 16
Excess payment . . . . . . . . . . . . . 16
Excise tax . . . . . . . . . . . . . . . . . . . 54
Insufficient payment . . . . . . . . . . 16
Revenue sharing
transactions . . . . . . . . . . . . . . . 16
Revocation of exemption . . . . . 16
Section 4958 . . . . . . . . . . . . . . . . 54
Excess business holdings . . . . . . 42
Excise taxes . . . . . . . . . 16, 42, 54, 55
Exempt function:
Political organization . . . . . . . . . 17
Exempt organizations, types
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exempt purposes:
Activities . . . . . . . . . . . . . . . . . . . . 44
Expenses . . . . . . . 25, 27, 30, 31, 32,
33, 40, 49, 50, 51, 53
Allocating indirect . . . . . . . . . . . . 28
Equipment rental and
maintenance . . . . . . . . . . . . . . 30
Fundraising . . . . . . . . . . . . . . 26, 28
Management and general . . . . 26,
28
Occupancy . . . . . . . . . . . . . . . . . . 30
Political . . . . . . . . . . . . . . . . . . 37, 53
Postage . . . . . . . . . . . . . . . . . . . . . 30
Printing . . . . . . . . . . . . . . . . . . . . . 30
Program service . . . . . . . . . . 26, 27
Shipping . . . . . . . . . . . . . . . . . . . . 30
Supplies . . . . . . . . . . . . . . . . . . . . 30
Telephone . . . . . . . . . . . . . . . . . . 30
Extension of time to file . . . . . . . . . . . 8
F
Fair market value . . . . . . . . . . . . . . 14
Federated fundraising
agencies . . . . . . . . . . . . . . . . . . . . 27
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Accounting . . . . . . . . . . . . . . . . . . 30
Copies . . . . . . . . . . . . . . . . . . . . . . 12
Fundraising . . . . . . . . . . . . . . . . . 30
Government agencies . . . . . . . . 43
Legal . . . . . . . . . . . . . . . . . . . . . . . 30
Figuring gross receipts . . . . . . . 4, 22
Filing tests . . . . . . . . . . . . . . . . . . . . . . 2
Final return . . . . . . . . . . . 8, 37, 46, 53
Fixed payment . . . . . . . . . . . . . . . . . 15
Foreign accounts . . . . . . . . . . . . . . 42
Foreign organizations . . . . . . . . . . 17
Form 1041 . . . . . . . . . . . . . . . . . . . . . . 5
Form 1098 . . . . . . . . . . . . . . . . . . . . . . 5
Form 1099 series . . . . . . . . . . . . . . . . 5
Form 1120-POL . . . . . . . . . . . . . . . . . 5
Form 990 header:
Amended returns . . . . . . . . . . . . 21
Application pending . . . . . . . . . . 21
Final return . . . . . . . . . . . . . . . . . . 21
Name and address . . . . . . . . . . . 21
Form 990-T . . . . . . . . . . . . . . . . . . . . . 5
Form LM-2 and LM-3, Labor
Organization Annual Report . . . . 6
Former officers, directors, trustees,
and key employees, list of . . . . 36

-56-

Forms and publications . . . . . . . . . . . 4
Functional expenses . . . . . . . . . . . 27
Allocating indirect . . . . . . . . . . . . 28
Fundraising . . . . . . . . . . . . . . . . . 28
Management and general . . . . 28
Program service . . . . . . . . . . . . . 27
Fund balances . . . . . . . . . . 27, 34, 51
Fundraising . . . . . . . . . . . . . . . . . . . 28
Expenses . . . . . . . . . . . . . . . . . . . 26
Fees . . . . . . . . . . . . . . . . . . . . . . . . 30
Records for tax deductible
contributions . . . . . . . . . . . . . . . . 8
Funds, current . . . . . . . . . . . . . . . . . 34
G
Gaming . . . . . . . . . . . . . . . . . . . . 25, 49
GEN (Group exemption
number) . . . . . . . . . . . . . . . . . 21, 46
Gifts . . . . . . . . . . . . . . . . . . . 22, 23, 47
Government:
Contracts . . . . . . . . . . . . . . . . . . . 43
Contributions . . . . . . . . . . . . . 24, 48
Fees . . . . . . . . . . . . . . . . . . . . . . . . 43
Grants . . . . . . . . . . . . . . . 23, 24, 48
Grants . . . . . . . 22, 23, 28, 47, 48, 50
Allocations, and . . . . . . . . . . . . . 28
Contributions . . . . . . . . . . . . . . . . 47
Donor advised funds . . . . . . . . . 28
Equivalent to
contributions . . . . . . . . . . . 23, 47
Government contributions . . . . 23,
24
Payable . . . . . . . . . . . . . . . . . . . . . 33
Receivable . . . . . . . . . . . . . . . . . . 32
Gross receipts . . . . . . . . 3, 41, 47, 54
$25,000 or less . . . . . . . . . . . . . . 21
Acting as agent . . . . . . . . . . . . . . . . 4
Figuring . . . . . . . . . . . . . . . . . . . . . 22
Gross receipts test . . . . . . . . . . . . . . . 4
$25,000 . . . . . . . . . . . . . . . . . . . . . . . 4
$5,000 . . . . . . . . . . . . . . . . . . . . . . . . 4
Gross rents . . . . . . . . . . . . . . . . . . . . 25
Group exemption number . . . . . . . 21,
46
Group return . . . . . . . . . . . . . . . 17, 21
H
Header . . . . . . . . . . . . . . . . . . . . . . . . 21
Help by phone . . . . . . . . . . . . . . . . . . . 2
Hospitals . . . . . . . . . . . . . . . . . . . . . . 24
I
Income:
Investment . . . . . . . . . . . . . . . . . . 48
Unrelated business . . . . . . . 37, 52
Income-Producing Activities:
Analysis . . . . . . . . . . . . . . . . . . . . 43
Indirect public support . . . . . . . . . . 24
Information Regarding Taxable
Subsidiaries and Disregarded
Entities . . . . . . . . . . . . . . . . . . . . . 44
Information Regarding Transfers
Associated With Personal Benefit
Contracts . . . . . . . . . . . . . . . . . . . 44
Initial contracts . . . . . . . . . . . . . . . . 15
Initial return . . . . . . . . . . . . . . . . 21, 46
Interest . . . . . . . . . . . . . . . . 25, 30, 43
Intermediate Sanction
Regulations . . . . . . . . . . . . . . 13-17
Inventory . . . . . . . . . . . . . . . . . . . . . . 50
Investment . . . . . . . . . . 25, 32, 33, 51
Dividend . . . . . . . . . . . . . . . . . . . . 48
Interest . . . . . . . . . . . . . . . . . . . . . 48
Program related . . . . . . . . . . . . . 48
Rents . . . . . . . . . . . . . . . . . . . . . . . 48
Savings and temporary
cash . . . . . . . . . . . . . . . . . . . . . . 31

Index

Page 57 of 57

Instructions for Form 990 and Form 990-EZ

10:30 - 17-JAN-2007

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

J
Joint costs . . . . . . . . . . . . . . . . . . . . 31
K
Key employee . . . . . . . . . . . . . . . . . 34
L
Labor organizations (section
501(c)(5)) . . . . . . . . . . . . . . . . . . . . . 6
Land, buildings and
equipment . . . . . . . . . . . . . . . . 33, 51
Land, buildings, and
equipment . . . . . . . . . . . . . . . . . . . 34
Legal fees . . . . . . . . . . . . . . . . . . 30, 51
Liquidation . . . . . . . . . . . . . . . . . 37, 53
List of Officers, Directors, Trustees,
and Key Employees . . . . . . . 34, 52
List of states . . . . . . . . . . . . . . . . . . . 42
Listed transaction . . . . . . . . . . . . . . 18
Loans:
Officers, directors, et al . . . . 33, 54
Receivable . . . . . . . . . . . . . . . . . . 32
Lobbying:
Cost allocation . . . . . . . . . . . . . . . 39
Direct . . . . . . . . . . . . . . . . . . . . . . . 53
Expenses . . . . . . . . . . . . . . . . 39, 40
Grassroots . . . . . . . . . . . . . . . . . . 53
In-house expenditures . . . . . . . . 53
Lobbying expenses . . . . . . . . . 40, 53
Lotteries . . . . . . . . . . . . . . . . . . . . . . 49
M
Maintenance expense . . . . . . . . . . 51
Management and general
expenses . . . . . . . . . . . . . . . . 26, 28
Medicare and Medicaid
payments . . . . . . . . . . . . . . . . . . . 43
Meetings, expense of . . . . . . . . . . 30
Membership . . . . . . . . . . . . . . . . 27, 50
Assessments . . . . . . . . . . . . . 25, 48
Benefits . . . . . . . . . . . . . . . . . . 29, 50
Dues . . . . . . . . . . . . . 23, 25, 38, 48
Miscellaneous expenses, reporting
for state . . . . . . . . . . . . . . . . . . . . . 31
Mortgages payable . . . . . . . . . . . . . 33
N
Name and address . . . . . . . . . . . . . 46
Name change . . . . . . . . . . . . . . 21, 46
Net assets . . . . . . . . . . 27, 33, 34, 51
Nondeductible dues . . . . . 38, 39, 40
Nondiscrimination policy . . . . . 41, 54
Nonexempt charitable trusts . . . . 42
Notes payable . . . . . . . . . . . . . . . . . 33
Notes receivable . . . . . . . . . . . . . . . 32
Number of employees . . . . . . . . . . 42
O
Occupancy expense . . . . . . . . . . . 51
Officers, directors, trustees, and key
employees, list of . . . . . . . . . 34, 52
Organization(s):
Affiliated . . . . . . . . . . . . . . . . . . . . 14
Foreign countries, in . . . . . . . . . 17
Managers . . . . . . . . . . . . . . . . 42, 55
Not required to file . . . . . . . . . . . . . 3
Relation to other . . . . . . . . . . . . . 37
Type . . . . . . . . . . . . . . . . . . . . . 21, 47
U.S. possessions, in . . . . . . . . . 17
P
Paid preparer . . . . . . . . . . . . . . . . . . 18
Paid-in capital . . . . . . . . . . . . . . . . . 34

Index

Paperwork reduction act
notice . . . . . . . . . . . . . . . . . . . . . . . 55
Payables . . . . . . . . . . . . . . . . . . . 33, 54
Payments to affiliates . . . . . . . . . . 26
Payroll taxes . . . . . . . . . . . . . . . . . . 30
Penalties . . . . . . . . . . . . . . . . . . 5, 8, 10
Pension plan contributions . . . . . . 29
Personal benefit contracts . . . . . . 17,
44, 52
Phone help . . . . . . . . . . . . . . . . . . . . . . 2
Pledges receivable . . . . . . . . . . . . . 31
Political:
Expenses . . . . . . . . . . . . . . . . 37, 40
Political organization . . . . . . . . . 3, 17
Penalties . . . . . . . . . . . . . . . . . . . . 11
Public inspection . . . . . . . . . . . . . 11
Postage expense . . . . . . . . . . . . . . 51
Premiums . . . . . . . . . . . . . . . . . . . . . . . 3
Prepaid expenses . . . . . . . . . . . . . . 32
Printing expense . . . . . . . . . . . . . . . 51
Private delivery services . . . . . . . . . . 7
Program service accomplishments,
statement of . . . . . . . . . . . . . . . . . 51
Program service expenses . . . . . . 26,
27
Program service revenue . . . . . . . 24,
43, 48
Government fees and
contracts . . . . . . . . . . . . . . . 24, 48
Insurance premiums . . . . . . . . . 24
Investment . . . . . . . . . . . . . . . . . . 48
Investments . . . . . . . . . . . . . . . . . 24
Medicaid . . . . . . . . . . . . . . . . . 24, 48
Medicare . . . . . . . . . . . . . . . . . 24, 48
Section 501(c)(15)
organization . . . . . . . . . . . . . . . 24
Unrelated trade or business
activities . . . . . . . . . . . . . . . . . . 24
Prohibited tax shelter
transactions . . . . . . . . . . . . . . . . . 17
Entity managers . . . . . . . . . . . . . 18
Entity managers excise tax . . . 18
Entity-level excise tax . . . . . . . . 18
Listed transaction . . . . . . . . . . . . 18
Prohibited reportable
transactions . . . . . . . . . . . . . . . 18
Required disclosure . . . . . . . . . . 18
Subsequently listed
transaction . . . . . . . . . . . . . . . . 18
Tax-exempt entities . . . . . . . . . . 18
Proxy tax . . . . . . . . . . . . . . . 38, 39, 40
Public inspection . . . . . . . . . . . . 10-13
Public interest law firms . . . . . . . . 17
Publication 78, Cumulative list of
section 170(c) organizations . . . . 3
Publications and forms . . . . . . . . . . . 4
Publicly-traded securities . . . . . . . 32
Purchases from affiliates . . . . . . . 27
Purpose of form . . . . . . . . . . . . . . . . . 2
Q
Qualified state or local political
organizations . . . . . . . . . . . . . . . . . . 3
Quid pro quo contribution . . . . . . . 10
R
Raffles . . . . . . . . . . . . . . . . . . . . . . . .
Reasonableness, presumption
of . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rebuttable presumption . . . . . . . .
Receivable . . . . . . . . . . . . . . . . . . . .
Account . . . . . . . . . . . . . . . . . . . . .
Grants . . . . . . . . . . . . . . . . . . . . . .
Pledges . . . . . . . . . . . . . . . . . . . . .
Reconciliation statements . . . . . . .
Recordkeeping . . . . . . . . . . . . . . . .

49
15
15
54
31
32
31
34
18

Relationship of Activities to the
Accomplishment of Exempt
Purposes . . . . . . . . . . . . . . . . . . . 44
Rent expense . . . . . . . . . . . . . . 25, 51
Rental income (loss) . . . . . . . . . . . 43
Requirements for a properly
completed Form 990 or Form
990-EZ . . . . . . . . . . . . . . . . . . 18-20
Retained earnings . . . . . . . . . . . . . 34
Revenue . . . . . . . . . . . . . . . 26, 33, 43
Special events . . . . . . . . . . . . . . . 26
Sweepstakes, raffles, and
lotteries . . . . . . . . . . . . . . . . . . . 26
Revenue, Expenses, and Changes
in Net Assets or Fund
Balances . . . . . . . . . . . . . . . . . . . . 47
Revenue, program service . . . . . . 48
Revenue, special events . . . . 26, 47,
49
Revocation of exemption . . . . . . . 16
S
Salaries of employees . . . . . . . . . . 29
Sales of inventory . . . . . . . . . . . 24, 26
Savings . . . . . . . . . . . . . . . . . . . . . . . 51
Schedule A . . . . . . . . . . . . 2, 5, 23, 47
Schedule B . . . . . 5, 8, 22, 24, 46, 48
Schedule of contributors . . . . . 8, 22,
24, 48
Section 4911, 4912, or 4955 . . . . 42,
54
Section 4947(a)(1) trusts . . . . 3, 42,
55
Section 4958 . . . . . . . . . . . . 13-17, 42
Section 4958, excise taxes:
Disqualified persons . . . . . . . . . 16
Organization managers . . . . . . . 16
Section 501(a), (e), (f), (k), and (n)
organizations . . . . . . . . . . . . . . . . . . 2
Section 501(c)(12)
organizations . . . . . . . . . . . . . . . . 41
Section 501(c)(15)
organizations . . . . . . . . . . . . . . . . . . 2
Section 501(c)(3) . . . . 23, 37, 47, 54
Applicable organization . . . . . . . 13
Disclosure of transactions and
relationships . . . . . . . . . . . . . . 13
Excess benefit transaction . . . . 54
Section 501(c)(4):
Applicable organization . . . . . . . 13
Excess benefit transaction . . . . 54
Lobbying expenses . . . . . . . 38, 52
Membership dues . . . . . . . . . 38, 52
Political expenses . . . . . . . . . 38, 52
Section 501(c)(5):
Lobbying expenses . . . . . . . 38, 52
Membership dues . . . . . . . . . 38, 52
Political expenses . . . . . . . . . 38, 52
Section 501(c)(6):
Lobbying expenses . . . . . . . 38, 52
Membership dues . . . . . . . . . 38, 52
Political expenses . . . . . . . . . 38, 52
Section 501(c)(7)
organizations . . . . . . . . . . . . . 41, 54
Section 501(c)(9)
organizations . . . . . . . . . . . . . 21, 46
Section 501(c)(9), (17), (18)
organizations . . . . . . . . . . . . . 23, 48
Section 6033(e):
Exceptions, in-house
lobbying . . . . . . . . . . . . . . . . . . 53
Exceptions, nondeductible
dues . . . . . . . . . . . . . . . . . . . . . . 53
Reporting requirements and proxy
tax . . . . . . . . . . . . . . . . . . . . . . . 52
Securities . . . . . . . . . . . . . . . . . . 25, 49
SFAS 116 . . . . . . . . . . . . . . 27, 28, 47

-57-

SFAS 117 . . . . . . . . . . . . . . . . . . 33, 34
Shipping expense . . . . . . . . . . . . . . 51
Signature . . . . . . . . . . . . . . . . . . . . . 18
Solicitations of contributions . . . . 38
Solicitations of nondeductible
contributions . . . . . . . . . . . . . . . . . . 8
Special events . . . . . . 22, 24, 25, 26,
47, 49
Sales . . . . . . . . . . . . . . . . . . . . . . . 26
Specific instructions for Form 990
(See also Table of Contents for
these specific
instructions.) . . . . . . . . . . . . . . . . 21
Specific Instructions for Form
990-EZ (See also Table of
Contents for these specific
instructions.) . . . . . . . . . . . . . . . . 46
Sponsoring organization . . . . . . . . 23
State filing requirement . . . . . . . . . . . 6
State, reporting to . . . . . . . . . . 6, 7, 31
Statement of Functional
Expenses . . . . . . . . . . . . . . . . . . . 27
Statement of Position 98-2 . . . . . . 31
Statement of program service
accomplishments . . . . . . . . . 31, 51
Substantial contributor . . . . . . . . . . 14
Substantial influence . . . . . . . . . . . 14
Substantiation . . . . . . . . . . . . . . . . . . . 9
Substitute forms for Form 990 or
Form 990-EZ . . . . . . . . . . . . . . . . . . 6
Supporting organization . . . . . . . . 14
Excess business holdings . . . . 42
Sweepstakes, raffles, and
lotteries . . . . . . . . . . . . . . . . . . 26, 49
T
Tax Forms Committee . . . . . . . . . . 55
Tax-exempt bond liabilities . . . . . . 33
Tax-exempt organization, public
inspection rules . . . . . . . . . . . . . . 11
Taxable subsidiaries . . . . . . . . . . . 44
Taxes, reimbursement of . . . . . . . 55
TE/GE EO Determinations . . . . . . . . 2
Telephone number . . . . . . . . . . 21, 46
Termination . . . . . . . . . . . . . . . . 37, 53
Test, facts and
circumstances . . . . . . . . . . . . . . . 14
Transfers:
Controlled entities . . . . . . . . . . . . 44
Personal benefit contracts . . . . 17
Travel expense . . . . . . . . . . . . . . . . 30
Trust fund recovery penalty . . . . . . . 5
Trust principal account . . . . . . . . . 34
Trusts, section 4947(a)(1) . . . . 3, 55
U
Unrelated business income . . . . . 37,
52
Unrelated trade or business
activities . . . . . . . . . . . . . . . . . 24, 48
Utilities expense . . . . . . . . . . . . . . . 51
W
Wages of employees . . . . . . . . . . . 29
Website address . . . . . . . . . . . . 21, 47
Who must file . . . . . . . . . . . . . . . . . . . . 2
Withholding:
Backup . . . . . . . . . . . . . . . . . . . . . 17

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