Schedule E - Schools

2008 Schedule E (Form 990 or 990-EZ) Instructions - Draft
April 7, 2008

2008 Schedule E (Form 990 or 990-EZ) Instructions
Schools
Section references are to the Internal Revenue Code unless otherwise noted.

General Instructions
Purpose of Schedule
Schedule E (Form 990 or 990-EZ) is used by an organization that files Form 990 or
990-EZ to report information on private schools.
Who Must File
Any organization that answered “Yes” to Form 990, Part IV, question 13, or Form 990EZ, Part VI, line 48, must complete and attach Schedule E to Form 990 or Form 990-EZ,
as applicable. This means that the organization is a school that checked the box on line
2 of Part I of Schedule A (Form 990 or 990-EZ).
If an organization is not required to file Form 990 or 990-EZ, it is not required to file
Schedule E.

Specific Instructions
Relevant parts of Rev. Proc. 75-50, 1975-2 C.B. 587 are given below. The revenue
procedure gives guidelines and recordkeeping requirements for determining whether
private schools that are recognized as exempt from tax have racially nondiscriminatory
policies toward their students.
4.01 Organizational requirements. A school must include a statement in its charter,
bylaws, or other governing instrument, or in a resolution of its governing body, that it has
a racially nondiscriminatory policy as to students and therefore does not discriminate
against applicants and students on the basis of race, color, and national or ethnic origin.
4.02 Statement of policy. Every school must include a statement of its racially
nondiscriminatory policy as to students in all its brochures and catalogues dealing with
student admissions, programs, and scholarships. A statement substantially similar to the
Notice described in paragraph (a) of subsection 1 of section 4.03, infra, will be
acceptable for this purpose. Further, every school must include a reference to its racially
nondiscriminatory policy in other written advertising that it uses as a means of informing
prospective students of its programs. The following references will be acceptable:
The (name) school admits students of any race, color, and national or ethnic origin.
4.03 Publicity. The school must make its racially nondiscriminatory policy known to all
segments of the general community served by the school.
1. The school must use one of the following two methods to satisfy this
requirement:
(a) The school may publish a notice of its racially nondiscriminatory policy in a
newspaper of general circulation that serves all racial segments of the community. This

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2008 Schedule E (Form 990 or 990-EZ) Instructions - Draft
April 7, 2008
publication must be repeated at least once annually during the period of the school’s
solicitation for students or, in the absence of a solicitation program, during the school’s
registration period. Where more than one community is served by a school, the school
may publish its notice in those newspapers that are reasonably likely to be read by all
racial segments of the communities that it serves. The notice must appear in a section of
the newspaper likely to be read by prospective students and their families and it must
occupy at least three column inches. It must be captioned in at least 12 point boldface
type as a notice of nondiscriminatory policy as to students, and its text must be printed in
at least 8 point type. The following notice will be acceptable:
Notice Of Nondiscriminatory Policy As To Students
The (name) school admits students of any race, color, national and ethnic origin to all
the rights, privileges, programs, and activities generally accorded or made available to
students at the school. It does not discriminate on the basis of race, color, national and
ethnic origin in administration of its educational policies, admissions policies, scholarship
and loan programs, and athletic and other school-administered programs.
(b) The school may use the broadcast media to publicize its racially
nondiscriminatory policy if this use makes such nondiscriminatory policy known to all
segments of the general community the school serves. If this method is chosen, the
school must provide documentation that the means by which this policy was
communicated to all segments of the general community was reasonably expected to be
effective. In this case, appropriate documentation would include copies of the tapes or
script used and records showing that there was an adequate number of announcements,
that they were made during hours when the announcements were likely to be
communicated to all segments of the general community, that they were of sufficient
duration to convey the message clearly, and that they were broadcast on radio or
television stations likely to be listened to by substantial numbers of members of all racial
segments of the general community. Announcements must be made during the period of
the school’s solicitation for students or, in the absence of a solicitation program, during
the school’s registration period.
Communication of a racially nondiscriminatory policy as to students by a school
to leaders of racial groups as the sole means of publicity generally will not be considered
effective to make the policy known to all segments of the community.
2. The requirements of subsection 1 of this section will not apply when one of the
following paragraphs applies:
(a) If for the preceding 3 years the enrollment of a parochial or other churchrelated school consists of students at least 75% of whom are members of the sponsoring
religious denomination or unit, the school may make known its racially nondiscriminatory
policy in whatever newspapers or circulars the religious denomination or unit utilizes in
the communities from which the students are drawn. These newspapers and circulars
may be those distributed by a particular religious denomination or unit or by an
association that represents a number of religious organizations of the same
denomination. If, however, the school advertises in newspapers of general circulation in
the community or communities from which its students are drawn and paragraphs (b)
and (c) of this subsection are not applicable to it, then it must comply with paragraph (a)
of subsection 1 of this section.
(b) If a school customarily draws a substantial percentage of its students
nationwide or worldwide or from a large geographic section or sections of the

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2008 Schedule E (Form 990 or 990-EZ) Instructions - Draft
April 7, 2008
United States and follows a racially nondiscriminatory policy as to students, the publicity
requirement may be satisfied by complying with section 4.02, supra. Such a school may
demonstrate that it follows a racially nondiscriminatory policy within the meaning of the
preceding sentence either by showing that it currently enrolls students of racial minority
groups in meaningful numbers or, when minority students are not enrolled in meaningful
numbers, that its promotional activities and recruiting efforts in each geographic area
were reasonably designed to inform students of all racial segments in the general
communities within the area of the availability of the school. The question whether a
school satisfies the preceding sentence will be determined on the basis of the facts and
circumstances of each case.
(c) If a school customarily draws its students from local communities and follows
a racially nondiscriminatory policy as to students, the publicity requirement may be
satisfied by complying with section 4.02, supra. Such a school may demonstrate that it
follows a racially nondiscriminatory policy within the meaning of the preceding sentence
by showing that it currently enrolls students of racial minority groups in meaningful
numbers. The question whether a school satisfies the preceding sentence will be
determined on the basis of the facts and circumstances of each case. One of the facts
and circumstances that the Service will consider is whether the school’s promotional
activities and recruiting efforts in each area were reasonably designed to inform students
of all racial segments in the general communities within the area of the availability of the
school. The Service recognizes that the failure by a school drawing its students from
local communities to enroll racial minority group students may not necessarily indicate
the absence of a racially nondiscriminatory policy as to students when there are
relatively few or no such students in these communities. Actual enrollment is, however, a
meaningful indication of a racially nondiscriminatory policy in a community in which a
public school or schools became subject to a desegregation order of a Federal court or
otherwise expressly became obligated to implement a desegregation plan under the
terms of any written contract or other commitment to which any Federal agency was a
party.
The Service encourages schools to satisfy the publicity requirement by the
methods described in subsection 1 of this section, regardless of whether a school
considers itself within subsection 2, because it believes these methods to be the most
effective to make known a school’s racially nondiscriminatory policy. In this regard it is
each school’s responsibility to determine whether paragraph (a), (b), or (c) of subsection
2 applies to it. On audit, a school must be prepared to demonstrate that the failure to
publish its racially nondiscriminatory policy in accordance with subsection 1 of this
section was justified by the application to it of paragraph (a), (b), or (c) of subsection 2.
Further, a school must be prepared to demonstrate that it has publicly disavowed or
repudiated any statements purported to have been made on its behalf (after November
6, 1975) that are contrary to its publicity of a racially nondiscriminatory policy as to
students, to the extent that the school or its principal official were aware of such
statements.
4.04 Facilities and programs. A school must be able to show that all of its programs
and facilities are operated in a racially nondiscriminatory manner.
4.05 Scholarship and loan programs. As a general rule, all scholarship or other
comparable benefits procurable for use at any given school must be offered on a racially
nondiscriminatory basis. Their availability on this basis must be known throughout the
general community being served by the school and should be referred to in the publicity

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2008 Schedule E (Form 990 or 990-EZ) Instructions - Draft
April 7, 2008
required by this section in order for that school to be considered racially
nondiscriminatory as to students. . . . [S]cholarships and loans that are made pursuant to
financial assistance programs favoring members of one or more racial minority groups
that are designed to promote a school’s racially nondiscriminatory policy will not
adversely affect the school’s exempt status.
Financial assistance programs favoring members of one or more racial groups that do
not significantly derogate from the school’s racially nondiscriminatory policy similarly will
not adversely affect the school’s exempt status.
4.06 Certification. An individual authorized to take official action on behalf of a school
that claims to be racially nondiscriminatory as to students is required to certify annually,
under penalties of perjury, that to the best of his or her knowledge and belief the school
has satisfied the applicable requirements of sections 4.01 through 4.05 of the Rev. Proc.
This certification is line 7 of Schedule E.
4.07 Faculty and staff. The existence of a racially discriminatory policy with respect to
employment of faculty and administrative staff is indicative of a racially discriminatory
policy as to students. Conversely, the absence of racial discrimination in employment of
faculty and administrative staff is indicative of a racially nondiscriminatory policy as to
students.
7.01 Specific records. Except as provided in section 7.03, each exempt private school
must maintain for a minimum period of three years, beginning with the year after the
year of compilation or acquisition, the following records for the use of the Service on
proper request:
1.
Records indicating the racial composition of the student body, faculty, and
administrative staff for each academic year.
2.
Records sufficient to document that scholarship and other financial assistance
is awarded on a racially nondiscriminatory basis.
3.
Copies of all brochures, catalogues, and advertising dealing with student
admissions, programs, and scholarships. Schools advertising nationally or in a
large geographic segment or segments of the United States need only maintain a
record sufficient to indicate when and in what publications their advertisements
were placed.
4.
Copies of all materials used by or on behalf of the school to solicit
contributions.
7.02 Limitation.
1. For purposes of section 7.01, the racial composition of the student body,
faculty, and administrative staff may be an estimate based on the best information
readily available to the school, without requiring student applicants, students, faculty, or
administrative staff to submit information to the school that the school otherwise does
not require. For each academic year, however, a record of the method by which racial
composition is determined must be maintained. . . .
2. The Service does not require that a school release personally identifiable
records or personal information contained therein except in accordance with the
requirements of the ‘‘Family Educational Rights and Privacy Act of 1974,’’ 20 U.S.C.
section 1232g (1974). Similarly, the Service does not require a school to keep records
the maintenance of which is prohibited under state or federal law.

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2008 Schedule E (Form 990 or 990-EZ) Instructions - Draft
April 7, 2008
7.03 Exceptions. The records described in section 7.01 need not be independently
maintained for Internal Revenue Service use if:
1.
Substantially the same information that each of these records would provide
has been included in a report or reports filed in accordance with law with an
agency or agencies of Federal, state, or local government, and this information is
current within one year, and
2.
The school maintains copies of these reports from which this information is
readily obtainable. Records described in section 7.01 providing information not
included in reports filed with an agency or agencies must be maintained by the
school for Service use.
7.04 Failure to maintain records. Failure to maintain or to produce upon the proper
request the required records and information will create a presumption that the
organization has failed to comply with these guidelines.

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