Return of Organization Exempt From Income Tax ...; Schedule O - Supplemental Information to Form 990

Userid: ________

PAGER/SGML
Page 1 of 79
2-FEB-2010

Fileid:

DTD INSTR04

Leadpct: -1%

Pt. size: 9

...\z9fhb\documents\epicfiles\2009 Forms\I990 for 2009 as of 2-1-10.sgm

❏

Draft

❏

Ok to Print

(Init. & date)

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

2009

Department of the Treasury
Internal Revenue Service

Instructions for Form 990
Return of Organization
Exempt From Income Tax
Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code
(except black lung benefit trust or private foundation)
Contents
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 . . .
C. Sequencing List To Complete the Form and
Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Accounting Periods and Methods . . . . . . . . . . . .
E. When, Where, and How To File . . . . . . . . . . . . . .
F. Extension of Time To File . . . . . . . . . . . . . . . . . .
G. Amended Return/Final Return . . . . . . . . . . . . . . .
H. Failure-To-File Penalties . . . . . . . . . . . . . . . . . . .
I. Group Return . . . . . . . . . . . . . . . . . . . . . . . . . . .
J. Requirements for a Properly Completed Form
990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Specific Instructions . . . . . . . . . . . . . . . . . . . . . . . . . .
Heading. Items A – M . . . . . . . . . . . . . . . . . . . . . . . .
Part I. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part II. Signature Block . . . . . . . . . . . . . . . . . . . . . .
Part III. Statement of Program Service
Accomplishments . . . . . . . . . . . . . . . . . . . . . . . . .
Part IV. Checklist of Required Schedules . . . . . . . . .
Part V. Statements Regarding Other IRS Filings and
Tax Compliance . . . . . . . . . . . . . . . . . . . . . . . . . .
Part VI. Governance, Management, and Disclosure .
Part VII. Compensation of Officers, Directors,
Trustees, Key Employees, Highest Compensated
Employees, and Independent Contractors . . . . . . . .
Part VIII. Statement of Revenue . . . . . . . . . . . . . . . .
Part IX. Statement of Functional Expenses . . . . . . . .
Part X. Balance Sheet . . . . . . . . . . . . . . . . . . . . . . .
Part XI. Financial Statements and Reporting . . . . . . .
Privacy Act and Paperwork Reduction Act Notice . . .
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix of Special Instructions . . . . . . . . . . . . . . . . .
Appendix A. Exempt Organizations Reference Chart .
Appendix B. How To Determine Whether an
Organization’s Gross Receipts Are Normally
$25,000 (or $5,000) or Less . . . . . . . . . . . . . . . . . .
Appendix C. Special Gross Receipts Tests For
Determining Exempt Status of Section 501(c)(7)
and 501(c)(15) Organizations . . . . . . . . . . . . . . . . .
Appendix D. Public Inspection of Returns . . . . . . . . .
Appendix E. Group Returns — Reporting Information
on Behalf of the Group. . . . . . . . . . . . . . . . . . . . . .
Appendix F. Disregarded Entities and Joint
Ventures — Inclusion of Activities and Items. . . . . . .
Appendix G. Section 4958 Excess Benefit
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

.
.
.
.
.
.
.
.

Page
... 1
... 4
... 4
... 4
... 4
... 4
... 4
... 5

.
.
.
.
.
.
.

.
.
.
.
.
.
.

.
.
.
.
.
.
.

.
.
.
.
.
.
.

.
.
.
.
.

.
.
.
.
.

.
.
.
.
.

. 8
. 9
. 9
10
10

6
6
7
7
7
7
8

. . . 11
. . . 11
. . . 14
. . . 16
.
.
.
.
.
.
.
.
.

.
.
.
.
.
.
.
.
.

.
.
.
.
.
.
.
.
.

21
31
35
39
41
42
43
59
59

. . . 60
. . . 60
. . . 61
. . . 64
. . . 65
. . . 67

Contents
Appendix H. Forms and Publications To File or Use
Appendix I. Use of Form 990 or 990-EZ To Satisfy
State Reporting Requirements . . . . . . . . . . . . . . .
Appendix J. Business Activity Codes . . . . . . . . . . .
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page
. . . . 71
. . . . 72
. . . . 73
. . . . 75

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

What’s New
New Penalty Provisions for Nonfiling
For annual tax periods beginning after 2006, the law requires
most tax-exempt organizations, other than churches, to file an
annual Form 990, 990-EZ, or 990-PF with the IRS, or to submit
a Form 990-N e-Postcard to the IRS. If an organization fails to
file an annual return or notice as required for 3 consecutive
years, it will automatically lose its tax-exempt status. See H.
Failure-To-File Penalties, beginning on page 7.

Redesigned Form 990 and Instructions for 2008
and 2009
The following describes both major changes to the Form 990
that became effective beginning in the 2008 tax year and
additional major changes effective for the 2009 tax year.

2009 Changes
In Part III, Program Service Accomplishments, the instructions
state that an organization must report new, significant program
services or significant changes in how it conducts program
services on its Form 990, Part III, rather than in a letter to IRS
Exempt Organization Determinations.
In Part IV, Checklist of Required Schedules:

• Line 11 includes more detailed trigger questions to help the

organization determine whether it needs to complete Parts VI,
VII, VIII, IX, or X of Schedule D (Form 990).
• A new line 12A asks whether the organization was included
in a consolidated, independent audited financial statement for
the tax year.
• If the organization checks “Yes” to line 20, it must complete
the entire Schedule H (Form 990), Hospitals, not just Part V of
Schedule H as was required for the 2008 tax year.
• If the organization checks “Yes” to line 24a, it must complete
the entire Schedule K (Form 990), Supplemental Information on
Tax-Exempt Bonds, not just Part I of Schedule K as was
required for the 2008 tax year.
• Line 28 includes simplified trigger questions to help the
organization determine whether it needs to complete Schedule
L (Form 990 or 990-EZ), Part IV.
• A new line 38 asks whether the organization completed
Schedule O (Form 990), and notes that all Form 990 filers are
required to complete Schedule O.

Cat. No. 11283J

Page 2 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

• Escrow and custodial accounts, to exempt section
4947(a)(2) split-interest trusts from reporting in Schedule D
(Form 990), Part IV, Trust, Escrow, and Custodial
Arrangements.
• Related organization, to clarify that related organizations
can include nonprofit organizations, stock corporations,
partnerships, limited liability companies, trusts, and
governmental units and other government entities.

In Part V, Statements Regarding Other IRS Filings and Tax
Compliance, the instructions for lines 1c, 7g, and 7h state a filer
should leave those lines blank if the questions are not
applicable.
In Part VI, Governance, Management, and Disclosure:
• Line 4 instructions state that an organization should report
significant changes to its organizational documents on its Form
990, Part VI, rather than in a letter to EO Determinations.
• Line 5 instructions describe a modified standard for
determining whether a diversion is considered material (and
thereby reportable on line 5).
• Lines 9 – 11 have been reordered so that former line 11 is
now line 9, former line 9 is now line 10, and former line 10 is
now lines 11 and 11A. Section B. Policies has been moved so
that is now above line 10.
• Line 18 instructions clarify that the organization should only
check the box for “Another’s website,” if it provided another
party with a copy of its Form 990, Form 990-T, or Form 1023/
1024, and the other party posted, on the other party’s website
during the tax year, an exact reproduction of the form(s) (other
than for information permitted by law to be withheld from public
disclosure, such as the names and addresses of contributors
listed in Schedule B (Form 990, 990-EZ, or 990-PF)).
The instructions for Part VII, Compensation:
• Clarify that U.S. source income to a foreign person from the
filing organization or a related organization, which is reported
on Form 1042-S, should be treated as reportable compensation
and reported, as applicable, in Part VII, Section A, column (E).
• Clarify when and how compensation from unrelated
organizations to the filing organization’s officers, directors,
trustees, and key employees must be reported in Section A.
• Include a new “leased employees” section that explains when
and how compensation of leased employees must be reported
in Section A.
• Clarify how compensation paid by common paymasters and
other reporting and payroll agents should be reported in Section
A.
In Part VIII, Statement of Revenue, the instructions for lines
2 (program service revenue) and 11 (miscellaneous revenue)
direct filers to report on those lines codes from a new Appendix
J, Business Activity Codes, which are derived from North
American Industry Classification System (NAICS) codes.
In Part IX, Statement of Functional Expenses, line 14
instructions clarify on which lines to report various information
technology-related expenses.
In Part X, Balance Sheet:
• Line 5 adds highest compensated employees to the list of
persons from whom receivables should be reported on that line,
and deletes “other related parties” from the list.
• Line 11 instructions state that an organization should report
publicly traded stock in a corporation that comprises more than
5% of the organization’s total assets on line 12 (other
securities), rather than on line 11 (publicly traded securities).
In Part XI, Financial Statements and Reporting:
• Line 1 clarifies that if the organization changed its method of
accounting from a prior year or checked the “other” box, it
should explain in Schedule O (Form 990).
• Line 2c clarifies that if the organization’s process for
overseeing the audit, review, or compilation of its financial
statements or the selection of an independent accountant has
changed from the prior year, the organization should explain
this change in Schedule O (Form 990).
• A new line 2d asks whether the organization’s financial
statements were issued on a consolidated basis, a separate
basis, or both.
• Line 3b clarifies that if the organization did not undergo a
required audit under the Single Audit Act and OMB Circular
A-133, it should explain why in Schedule O (Form 990) and
describe any steps taken to undergo such audits.
The Glossary includes revised definitions of:
• Control, to clarify various means by which the organization
can control or be controlled by another organization, for
purposes of determining the organization’s related
organizations.

2008 Changes
The Form 990 has been redesigned for 2008 and future
years. The new form consists of an 11-page, 11-part core form
that is required to be completed by all organizations that file
Form 990 and schedules to be completed by those
organizations that satisfy the applicable requirements for each
schedule.
The following provides a brief summary of some major
changes and features of the new form and an outline of the new
core form and schedules. This summary does not describe all
of the new features or changes. Some of the information
previously required by the 2007 Form 990 has been eliminated
or revised, and the redesigned Form 990 requires information
not previously required. Some information previously required
of only certain types of organizations now is required of all
types of organizations completing the form. The organization
should carefully review the new form and instructions in order to
make sure it satisfies the new form’s reporting requirements.
See the IRS website at www.irs.gov and click on the Charities &
Non-Profits tab for more information.
Some areas of major changes in reporting requirements
include governance and compensation of officers, directors,
trustees, key employees, and highest compensated employees.
For example, Part VI. Governance, Management, and
Disclosure, is a new section that asks questions about the
organization’s governance structure, policies, and disclosure
practices. Part VII. Compensation of Officers, Directors,
Trustees, Key Employees, Highest Compensated Employees,
and Independent Contractors, also contains important changes,
including new definitions of officer and key employee applicable
to all organizations, and the extension of reporting
compensation paid to the top five highest compensated
employees from organizations described in sections 501(c)(3)
or 4947(a)(1), as was previously the case, to all organizations
filing the Form 990, such as social welfare organizations,
business leagues, trade associations, and social clubs.
Other areas of significant change include determination of
public charity status and public support; supplemental financial
statement reporting; and fundraising, special events, and
gaming. For organizations described in sections 501(c)(3) or
4947(a)(1), Schedule A (Form 990 or 990-EZ) has been revised
to emphasize reporting of public charity status and public
support. Schedule D (Form 990) contains new reporting
requirements for conservation organizations; museums and
other organizations maintaining collections of works of art and
other items; credit counseling organizations and others holding
funds in escrow or custodial arrangements; and organizations
maintaining endowments. Schedule G (Form 990 or 990-EZ)
requires reporting of certain information regarding
arrangements with professional fundraisers, fundraising events,
and gaming activities. Other new schedules include those for
reporting foreign activities (Schedule F); hospitals (Schedule H);
tax-exempt bonds (Schedule K); noncash contributions
(Schedule M); and related organizations (Schedule R).
The following is an outline of the parts of the core form and
the schedules.
Core form. The core form required to be completed by all
organizations consists of the following eleven parts.
• Part I, Summary provides certain important information
regarding the organization’s mission, activities, and current and
prior years’ financial results.
• Part II, Signature Block contains the signature of an
organization’s officer, and, if applicable, paid preparer.
• Part III, Statement of Program Service Accomplishments
requires reporting of the organization’s new, ongoing, and

-2-

Page 3 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

discontinued exempt purpose achievements and related
revenue and expenses.
• Part IV, Checklist of Required Schedules is used by the
organization to determine which schedules it must complete
and file with the IRS as part of the Form 990.
• Part V, Statements Regarding Other IRS Filings and Tax
Compliance is used by the organization to report its compliance
with other federal tax reporting and substantiation requirements.
• Part VI, Governance, Management, and Disclosure requires
information regarding the organization’s governing body and
management, policies, and disclosure practices.
• Part VII, Compensation of Officers, Directors, Trustees, Key
Employees, Highest Compensated Employees, and
Independent Contractors is used to report compensation paid to
such persons by the organization and its related organizations
reported on Forms W-2, Forms 1099-MISC, and as certain
other compensation.
• Part VIII, Statement of Revenue, Part IX. Statement of
Functional Expenses, and Part X. Balance Sheet, comprise the
financial statements of the organization for federal tax reporting
purposes.
• Part XI, Financial Statements and Reporting is used to report
information regarding the organization’s accounting methods
and its compiled, reviewed, or audited financial statements.

information for certain current or former officers, directors,
trustees, key employees, and highest compensated employees,
and certain information regarding the organization’s
compensation practices and arrangements.
• Schedule K (Form 990), Supplemental Information for
Tax-Exempt Bonds is completed by organizations with
outstanding tax-exempt bond liabilities.
• Schedule L (Form 990 or 990-EZ), Transactions with
Interested Persons is completed by organizations that engage
in certain types of relationships or transactions with interested
persons, including excess benefit transactions, loans, grants or
other financial assistance, and other financial or business
transactions or arrangements.
• Schedule M (Form 990), Noncash Contributions is used to
report contributions other than cash received by the
organization.
• Schedule N (Form 990 or 990-EZ), Liquidation, Termination,
Dissolution, or Significant Disposition of Assets is used to report
major dispositions of assets by the organization.
• Schedule O (Form 990), Supplemental Information to Form
990 is used by organizations to provide supplemental
information to describe or explain the organization’s responses
to questions contained in the core form and schedules.
• Schedule R (Form 990), Related Organizations and
Unrelated Partnerships is used to provide information regarding
the organization’s relationships with other exempt and taxable
organizations.

Schedules. The 2009 Form 990 contains 16 schedules. Each
organization must complete Part IV, Checklist of Required
Schedules, to determine those schedules it must complete.
These schedules replace the prior schedules and most required
attachments previously constructed and completed by the filing
organization. All filers will be required to provide certain
narrative responses on Schedule O (Form 990). The following
is a list and brief description of the schedules.
• Schedule A (Form 990 or 990-EZ), Public Charity Status and
Public Support is completed by organizations described in
sections 501(c)(3) and 4947(a)(1) to provide information
relevant to status as a public charity, including satisfaction of
applicable public support tests on an ongoing basis.
• Schedule B (Form 990, 990-EZ or 990-PF), Schedule of
Contributors is completed by organizations to provide
information regarding contributions they report as revenues.
• Schedule C (Form 990 or 990-EZ), Political Campaign and
Lobbying Activities is completed by organizations that conduct
political campaign activities, organizations described in sections
501(c)(3) and 4947(a)(1) that conduct lobbying activities, and
organizations subject to section 6033(e) notice and reporting
requirements and potential proxy tax on certain membership
dues, assessments, and similar amounts.
• Schedule D (Form 990), Supplemental Financial Statements
is completed by organizations to supplement certain balance
sheet information, as well as conservation organizations,
museums and other organizations maintaining collections,
credit counseling organizations and others holding funds in
escrow or custodial arrangements, and organizations
maintaining endowments or donor advised funds and similar
funds or accounts.
• Schedule E (Form 990 or 990-EZ), Schools is the private
school questionnaire previously contained in former Schedule
A.
• Schedule F (Form 990), Statement of Activities Outside the
United States is used to report the organization’s activities
conducted outside the United States.
• Schedule G (Form 990 or 990-EZ), Supplemental Information
Regarding Fundraising or Gaming Activities requires reporting
by organizations that reported certain amounts of professional
fundraising expenses, revenue from fundraising events, and
revenue from gaming activities.
• Schedule H (Form 990), Hospitals is completed by
organizations that operate one or more facilities licensed or
registered as a hospital under state law.
• Schedule I (Form 990), Grants and Other Assistance to
Organizations, Governments and Individuals in the United
States is used to report grants and other assistance provided by
the organization to others within the United States.
• Schedule J (Form 990), Compensation Information is
completed by organizations to provide detailed compensation

Instructions, glossary, and appendices. The 2009
Instructions for Form 990 contain a sequencing list to help
organizations determine the order in which to complete various
portions of the form (see Sequencing List To Complete the
Form); general and specific instructions for the core form and
schedules; a glossary of key terms; and a compensation table
to help organizations determine where and how to report types
of compensation paid to officers, directors, trustees, key
employees, and highest compensated employees (see Specific
Instructions for Part VII). The instructions also contain
appendices for reporting requirements and guidance regarding
group returns (see Appendix E), and for organizations to report
activities conducted indirectly through joint ventures and
disregarded entities (see Appendix F).

Form 990-EZ Filing Amounts for 2009 and 2010
Form 990-EZ, Short Form Return of Organization Exempt From
Income Tax, can be filed by most organizations with gross
receipts and total assets below certain amounts. For calendar
or fiscal years beginning in 2009, most organizations with
annual gross receipts less than $500,000 and total assets less
than $1,250,000 at the end of the tax year can choose to file
Form 990 or 990-EZ. (For 2008, these amounts were less than
$1,000,000 in gross receipts and $2,500,000 in total assets.)
Beginning in tax year 2010, most organizations with annual
gross receipts less than $200,000 and total assets less than
$500,000 at the end of the tax year can file either Form 990 or
990-EZ. See the table on the next page for a summary of the
2008 – 2010 Form 990-EZ filing amounts.
Although Form 990-EZ was not redesigned for 2008 or 2009,
some changes have been made. Organizations that file the
2009 Form 990-EZ must review the instructions for Schedules
A, B, C, E, G, L, and N to determine whether they must now
report any of their activities or information on those schedules.
Form 990-EZ filers will not be required to complete any of the
other 2009 Form 990 schedules.

Annual Electronic Filing Requirement for Small
Tax-Exempt Organizations
Many small tax-exempt organizations with annual gross
receipts less than or equal to $25,000 now must submit Form
990-N, Electronic Notice (e-Postcard) for Tax-Exempt
Organizations Not Required to File Form 990 or 990-EZ, if they
choose not to file Form 990 or 990-EZ. See the IRS website at
www.irs.gov/charities and click on the Form 990-N (e-Postcard)
tab for more information.

-3-

Page 4 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Form 990-EZ Filing Amounts for 2008 – 2010
File Form 990-EZ for . . . . . . . . . . . . . . . . .

If gross receipts are less than . . . . . . . . . . And if total assets are less than . . . . . . . .

2008 (generally filed in 2009)

$1,000,000

$2,500,000

2009 (generally filed in 2010)

$500,000

$1,250,000

2010 and later

$200,000

$500,000

must be completed by all filing organizations and require
reporting on the organization’s exempt and other activities,
finances, governance, compliance with certain federal tax filings
and requirements, and compensation paid to certain persons.
Additional schedules are required to be completed depending
upon the activities and type of the organization. By completing
Part IV, the organization determines which schedules are
required. The entire completed Form 990 filed with the IRS,
except for certain contributor information on Schedule B (Form
990, 990-EZ, or 990-PF), is required to be made available to
the public by the IRS and the filing organization, and can be
required to be filed with state governments to satisfy state
reporting requirements.
Helpful Hints. The following hints can help you more
efficiently review these instructions and complete the form.
• See C. Sequencing List To Complete the Form that provides
guidance on the recommended order for completing the form
and applicable schedules.
• Throughout these instructions, terms that are highlighted in
bold are defined in the Glossary.
• Throughout these instructions, “the organization” and the
“filing organization” both refer to the organization filing Form
990.
• The examples appearing throughout the instructions to Form
990 are illustrative only. They are for the purpose of completing
this form and are not all-inclusive.
• Instructions to the Form 990 schedules are published
separately from these instructions.

Purpose of Form
Forms 990 and 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 or 990-EZ, and a
section 501(c)(3) organization’s 990-T, Exempt Organization
Business Income Tax Return, generally are available for public
inspection as required by section 6104. Schedule B (Form 990,
990-EZ, or 990-PF), Schedule of Contributors, is available for
public inspection for section 527 organizations filing Form 990
or 990-EZ. For other organizations that file Form 990 or Form
990-EZ, parts of Schedule B (Form 990, 990-EZ, or 990-PF),
can be open to public inspection. See Appendix D and the
instructions for Schedule B (Form 990, 990-EZ, or 990-PF) for
more details.
Some members of the public rely on Form 990 or Form
990-EZ as their primary or sole source of information about a
particular organization. How the public perceives an
organization in such cases can be determined by 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 990-EZ to send a required election to the
IRS, such as the election to capitalize costs under section 266.

Phone Help

Organizations that have total gross income from
unrelated trades or businesses of at least $1,000 also
CAUTION are required to file Form 990-T, Exempt Organization
Business Income Tax Return, in addition to any required Form
990, 990-EZ, or 990-N.

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

!

Email Subscription

A. Who Must File

The IRS has established a 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.

Most organizations exempt from income tax under section
501(a) must file an annual information return (Form 990 or
990-EZ) or submit an annual electronic notice (Form 990-N),
depending upon the organization’s gross receipts and total
assets.
For 2009, Form 990 must be filed by an organization exempt
from income tax under section 501(a) (including an organization
that has not applied for recognition of exemption) if it has either
(1) gross receipts greater than or equal to $500,000 or (2) total
assets greater than or equal to $1,250,000 at the end of the tax
year. This includes:
• Organizations described in section 501(c)(3) (other than
private foundations), and
• Organizations described in other 501(c) subsections (other
than black lung benefit trusts).
Gross receipts are the total amounts the organization
received from all sources during its annual accounting period,
without subtracting any costs or expenses. See Appendix B for
a discussion of gross receipts.
For purposes of Form 990 reporting, the term section
501(c)(3) includes organizations exempt under sections 501(e)
and (f) (cooperative service organizations), 501(k) (child care
organizations), and 501(n) (charitable risk pools). In addition,
any organization described in one of these sections is also
subject to section 4958 if it obtains a determination letter from
the IRS stating that it is described in section 501(c)(3).
Form 990-N. If an organization normally has gross receipts of
$25,000 or less, it must submit Form 990-N, Electronic Notice
(e-Postcard) for Tax-Exempt Organizations Not Required To

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

General Instructions
Overview of Form 990
Note. Terms in bold are defined in the Glossary of the
Instructions for Form 990.

!

CAUTION

Certain Form 990 filers must file electronically. See E.
When, Where, and How To File for who must file
electronically.

Form 990 is an annual information return required to be filed
with the IRS by most organizations exempt from income tax
under section 501(a), and certain political organizations and
nonexempt charitable trusts. Parts I through XI of the form

-4-

Page 5 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

File Form 990 or 990-EZ, if it chooses not to file Form 990 or
Form 990-EZ (with exceptions described below for certain
section 509(a)(3) supporting organizations and for certain
organizations described in B. Organizations Not Required To
File Form 990). See Appendix B for a discussion of gross
receipts.
Form 990-EZ. For tax years beginning in 2009, if an
organization has gross receipts less than $500,000 and total
assets at the end of the tax year less than $1,250,000, it can
choose to file Form 990-EZ, Short Form Return of Organization
Exempt From Income Tax, instead of Form 990. See the
instructions for Form 990-EZ for more information. See the
special rules below regarding controlling organizations under
section 512(b)(13) and sponsoring organizations of donor
advised funds.
If an organization eligible to file the Form 990-N or 990-EZ
chooses to file the Form 990, it must file a complete return.

4947(a)(1) (if it is not treated as a private foundation) is required
to file Form 990 or 990-EZ, unless excepted under B.
Organizations Not Required To File Form 990. Such a trust is
treated like an exempt section 501(c)(3) organization for
purposes of completing the form. All references to a section
501(c)(3) organization shall include a section 4947(a)(1) trust
(for instance, such a trust must complete Schedule A (Form 990
or 990-EZ)), unless otherwise specified. If such a trust does not
have any taxable income under Subtitle A of the Code, it can
file Form 990 or 990-EZ to meet its section 6012 filing
requirement and does not have to file Form 1041, U.S. Income
Tax Return for Estates and Trusts.
Returns when exempt status not yet established. An
organization is required to file Form 990 in accordance with
these instructions if the organization claims exempt status
under section 501(a) but has not yet established such exempt
status by filing Form 1023, Application for Recognition of
Exemption Under Section 501(c)(3) of the Internal Revenue
Code, or Form 1024, Application for Recognition of Exemption
Under Section 501(a) or for Determination Under Section 120,
and receiving an IRS determination letter recognizing
tax-exempt status. In such a case, the organization must check
the “Application pending” checkbox in item B on Form 990,
page 1 (whether or not a Form 1023 or 1024 has been filed) to
indicate that Form 990 is being filed in the belief that the
organization is exempt under section 501(a), but that the IRS
has not yet recognized such exemption.

The IRS has provided transitional relief to small and

TIP mid-size organizations, allowing many to file Form
990-EZ for 2009 instead of Form 990, and providing
them additional time to become familiar with the new Form 990
and its requirements. The table on page 4 describes the
modified thresholds for filing Form 990-EZ (instead of Form
990) during this transition period.
Foreign and U.S. possession organizations. Foreign
organizations and U.S. possession organizations as well as
domestic organizations must file Form 990 or 990-EZ unless
specifically excepted under B. Organizations Not Required To
File Form 990. 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.
Sponsoring organizations of donor advised funds.
Sponsoring organizations of donor advised funds, if
required to file an annual information return for the year, must
file Form 990 and not Form 990-EZ.
Controlling organizations described in section 512(b)(13).
A controlling organization of one or more controlled entities,
as described in section 512(b)(13), must file Form 990 and not
Form 990-EZ if it is required to file an annual information return
for the year and if there was any transfer of funds between the
controlling organization and any controlled entity during the
year.
Section 509(a)(3) supporting organizations. A section
509(a)(3) supporting organization must file Form 990 or
990-EZ, even if its gross receipts are normally $25,000 or less,
unless it qualifies as one of the following:
1. An integrated auxiliary of a church as described in
Regulations section 1.6033 – 2(h),
2. The exclusively religious activities of a religious order,
or
3. An organization, the gross receipts of which are normally
not more than $5,000, that supports a section 501(c)(3)
religious organization.

B. Organizations Not Required To File
Form 990 or 990-EZ
An organization does not have to file Form 990 or 990-EZ even
if it has at least $500,000 of gross receipts for the tax year or
$1,250,000 of total assets at the end of the tax year if it is
described below (except for section 509(a)(3) supporting
organizations, which are described earlier). See A. Who Must
File for determining whether the organization can file Form
990-EZ instead of Form 990. An organization described in item
10, 11, or 13 on page 6 is required to file Form 990-N unless it
voluntarily files Form 990, 990-EZ, or 990-BL.
Certain religious organizations.
1. A church, an interchurch organization of local units of a
church, a convention or association of churches, or an
integrated auxiliary of a church as described in Regulations
section 1.6033-2(h) (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 described in Regulations section
1.6033-2(g)(1)(vii).
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
described in Rev. Proc. 91-20, 1991-1 C.B. 524.
Certain governmental organizations.
6. A state institution whose income is excluded from gross
income under section 115.
7. A governmental unit or affiliate of a governmental unit
described in Rev. Proc. 95-48, 1995-2 C.B. 418.
8. 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.
Certain political organizations.
9. 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; or
• Required to report under the Federal Election Campaign
Act of 1971 as a political committee (as defined in section
301(4) of such Act).

If the organization is described in (3) but not in (1) or (2) then it
must file Form 990-N unless it voluntarily files Form 990 or
990-EZ.
Section 501(c)(7) and 501(c)(15) organizations. Section
501(c)(7) and 501(c)(15) organizations apply the same gross
receipts test as other organizations to determine whether they
must file Form 990, but use a different definition of gross
receipts to determine whether they qualify as tax-exempt for the
tax year. See Appendix C for more information.
Section 527 political organizations. Tax-exempt political
organizations must file Form 990 or 990-EZ unless excepted
under B. Organizations Not Required To File Form 990. A
qualified state or local political organization must file Form 990
or 990-EZ only if it has gross receipts of $100,000 or more.
Political organizations are not required to submit Form 990-N.
Section 4947(a)(1) nonexempt charitable trusts. A
nonexempt charitable trust described under section

-5-

Page 6 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Certain organizations with limited gross receipts.
10. An organization whose gross receipts are normally
$25,000 or less. To determine what an organization’s gross
receipts “normally” are, see Appendix B, How to Determine
Whether an Organization’s Gross Receipts Are Normally
$25,000 (or $5,000) or Less.
11. A foreign organization, including organizations located
in U.S. possessions, whose gross receipts from sources
within the United States are normally $25,000 or less and which
did not engage in significant activity in the United States (other
than investment activity). See Rev. Proc. 94-17 and Rev. Proc.
2003-21.
Certain organizations that file different kinds of annual
information returns.
12. A private foundation (including a private operating
foundation) exempt under section 501(c)(3) and described in
section 509(a). Use Form 990-PF, Return of Private
Foundation. Also use Form 990-PF for a taxable private
foundation, a section 4947(a)(1) nonexempt charitable trust
treated as a private foundation, and a private foundation
terminating its status by becoming a public charity under
section 507(b)(1)(B) (for tax years within its 60-month
termination period). If the organization successfully terminates,
then it files Form 990 or 990-EZ in its final year of termination.
13. 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.
14. A religious or apostolic organization described in section
501(d). Use Form 1065, U.S. Return of Partnership Income.
15. A stock bonus, pension, or profit-sharing trust that
qualifies under section 401. Use Form 5500, Annual Return/
Report of Employee Benefit Plan.

independence of members of the governing body under
Form 990, Part VI, line 1b.
9. Complete Part I of Form 990 based on information
derived from other parts of the form.
10. Complete Part IV of Form 990 to determine which
schedules must be completed by the organization.
11. Complete Schedule O (Form 990) and any other
applicable schedules (for “Yes” boxes that were checked in Part
IV). Use Schedule O (Form 990), to provide required
supplemental information and other narrative explanations.
12. Complete Part II, Signature Block, of Form 990.

D. Accounting Periods and Methods
Accounting Periods
Calendar year. Use the 2009 Form 990 to report on the 2009
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 2009 Form 990 to report on the
organization’s fiscal year that began in 2009 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 item A of the Heading of Form 990 the
date the organization’s fiscal year began in 2009 and the date
the fiscal year ended in 2010.
Short period. A short accounting period is a period of less
than 12 months, which exists when an organization first
commences operations, changes its accounting period, or
terminates. If the organization’s short year ended prior to
December 31, 2009 (not on or after December 31, 2009), it
should use 2008 Form 990 to file for the short year.
Accounting period change. If the organization changes its
accounting period, it must file a Form 990 for the short period
resulting from the change. Write “Change of Accounting Period”
at the top of this short-period return.
If the organization previously changed its accounting period
within the 10-calendar-year period that includes the beginning
of the short period, and it had a Form 990 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.

Subordinate organizations in a group exemption

TIP which are included in a group return filed by the
central organization for the tax year should not file a
separate form 990 for the tax year.

C. Sequencing List To Complete the
Form and Schedules
You may find the following list helpful. It limits jumping from one
part of the form to another to make a calculation or
determination needed to complete an earlier part. Certain later
parts of the form must first be completed in order to complete
earlier parts. In general, first complete the core form, and then
complete alphabetically Schedules A – N and Schedule R,
except as provided below. Schedule O should be completed as
the core form and schedules are completed. Note that all
organizations filing Form 990 must file Schedule O.

Accounting Methods
Unless instructed otherwise, the organization should generally
use the same accounting method on the return to report
revenue and expenses that it regularly uses to keep its books
and records. To be acceptable for Form 990 reporting
purposes, however, the method of accounting must clearly
reflect income.
Accounting method change. Generally, the organization
must file Form 3115 to change its accounting method. An
exception applies where a section 501(c) organization changes
its accounting method to comply with SFAS 116, Accounting for
Contributions Received and Contributions Made. See Notice
96-30, 1996-1 C.B. 378. An organization that makes a change
in accounting method, regardless of whether it files Form 3115,
and that has audited financial statements, must report any
adjustment required by section 481(a) on Schedule D (Form
990), Parts XI through XIV.
State reporting. Most states that accept Form 990 in place of
their own forms require that all amounts be reported based on
the accrual method of accounting. If the organization prepares
Form 990 for state reporting purposes, it can 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 for filing with the IRS.
Example 1. The organization maintains its books on the
cash receipts and disbursements method of accounting but
prepares a Form 990 return for the state based on the accrual
method. It could use that return for reporting to the IRS.

A public charity described in section 170(b)(1)(A)(iv),

TIP 170(b)(1)(A)(vi), or 509(a)(2) that is not within its initial
five years of existence should first complete Part II or III
of Schedule A (Form 990 or 990-EZ) to ensure that it continues
to qualify as a public charity for the tax year. If it fails to qualify
as a public charity, then it must file Form 990-PF rather than
Form 990 or 990-EZ.
1. Complete lines A through F and H(a) through M in the
Heading of Form 990, on page 1.
2. See the instructions for definitions of related
organization and control and determine the organization’s
related organizations required to be listed in Schedule R
(Form 990).
3. Determine the organization’s officers, directors, trustees,
key employees, and five highest compensated employees
required to be listed on Form 990, Part VII, Section A.
4. Complete Parts VIII, IX, and X of Form 990.
5. Complete line G in the Heading section of Form 990, on
page 1.
6. Complete Parts III, V, VII, and XI of Form 990.
7. See the instructions for Schedule L (Form 990 or 990-EZ)
and complete Schedule L (Form 990 or 990-EZ) (if required).
8. Complete Part VI of Form 990. Transactions reported on
Schedule L (Form 990 or 990-EZ) are relevant to determining

-6-

Page 7 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

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 prepared for that state is
acceptable for the IRS reporting purposes if the state reporting
requirement does not conflict with the instructions for Form 990.
An organization should keep a reconciliation of any
differences between its books of account and the Form 990 that
is filed. Organizations with audited financial statements are
required to provide such reconciliations on Schedule D (Form
990), Parts XI through XIII.

For additional information on the electronic filing
requirement, visit www.irs.gov/efile.
The IRS may waive the requirements to file electronically in
cases of undue hardship. For information on filing a waiver, see
Notice 2010-13, 2010-4 I.R.B. 327, available at
www.irs.gov/irb/2010-04_IRB/ar14.html.

F. 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.

See IRS Pub. 538, Accounting Periods and Methods,

TIP about reporting changes to accounting periods and
methods.

G. Amended Return/Final Return

E. When, Where, and How to File

To change the organization’s return for any year, file a new
return including any required schedules. Use the version of
Form 990 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 item B of the Heading of the
return. Also, enter in Schedule O (Form 990) which parts and
schedules of the Form 990 were amended and describe the
amendments.
The organization can 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 inspection for 3 years from the date of filing or 3
years from the date the original return was due, whichever is
later.
If the organization needs a complete copy of its previously
filed return, it can file Form 4506, Request for Copy of Tax
Return. See www.irs.gov for information on getting blank tax
forms.
If the return is a final return, see the instructions for
Schedule N (Form 990 or 990-EZ) for further details.
Amended returns and state filing considerations. State law
may require that the organization send a copy of an amended
Form 990 return (or information provided to the IRS
supplementing the return) to the state with which it filed a copy
of Form 990 originally to meet that state’s reporting
requirement. A state may require an organization to file an
amended Form 990 to satisfy state reporting requirements,
even if the original return was accepted by the IRS.

File Form 990 by the 15th day of the 5th month after the
organization’s accounting period ends (May 15th for a
calendar-year filer). 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 liquidation,
dissolution, or termination.
If the return is not filed by the due date (including any
extension granted), explain in a separate attachment, giving the
reasons for not filing on time.
Send the return to:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027
Foreign and U.S. possession organizations. If the
organization’s principal business, office, or agency is located in
a foreign country or U.S. possession, send the return to:
Department of the Treasury
Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409
Private delivery services. The organization can use only the
IRS-designated private delivery services below 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.
• 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 AM, UPS
Worldwide Express Plus, and UPS Worldwide Express.
The private delivery service can tell you how to get written
proof of the mailing date.

!

CAUTION

H. 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, can
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 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.
Tax exempt organizations that are required to file
electronically but do not are deemed to have failed to file the
return. This is true even if a paper return is submitted.
The penalty can also be charged if the organization files an
incomplete return, such as by failing to complete a required line
item or a required part of a schedule. To avoid penalties and
having to supply missing information later:
• Complete all applicable line items,
• Unless instructed to skip a line, answer each question on the
return,
• Make an entry (including a zero when appropriate) on all
lines requiring an amount or other information to be reported,
and
• Provide required explanations as instructed.
Also, this penalty can be imposed if the organization’s return
contains incorrect information. For example, an organization

Private delivery services cannot deliver items to P.O.
boxes. You must use the U.S. Postal Service to mail any
item to an IRS P.O. box.

Electronic filing. The organization can file Form 990 and
related forms, schedules, and attachments electronically.
However, if an organization files at least 250 returns of any type
during the calendar year ending with or within the organization’s
tax year and has total assets of $10 million or more at the end
of the tax year, it must file Form 990 electronically. “Returns” for
this purpose include information returns (for example, Forms
W-2 and Forms 1099), income tax returns, employment tax
returns (including quarterly Forms 941), and excise tax returns.
If an organization is required to file a return electronically but
does not, the organization is considered not to have filed its
return, even if a paper return is submitted. See Regulations
section 301.6033-4 for more information.

-7-

Page 8 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

that reports contributions net of related fundraising expenses
can be subject to this penalty.
Use of a paid preparer does not relieve the organization of
its responsibility to file a complete 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.
There are also penalties (fines and imprisonment) for willfully
not filing returns and for filing fraudulent returns and statements
with the IRS (see sections 7203, 7206, and 7207). States can
impose additional penalties for failure to meet their separate
filing requirements.
New penalty provisions for nonfiling. The law requires most
tax-exempt organizations, other than churches, to file an annual
Form 990, 990-EZ, or 990-PF with the IRS, or to submit a Form
990-N e-Postcard to the IRS. If an organization fails to file an
annual return or notice as required for 3 consecutive years, it
will automatically lose its tax-exempt status. Beginning in 2010,
automatic revocations will start for organizations not filing for
the third consecutive year. Organizations that lose their
exemption must file income tax returns and pay income taxes.
For details, go to www.irs.gov/eo.

so, it must file a complete return and provide all of the
information requested, including the required schedules.
Public inspection. In general, all information the organization
reports on or with its Form 990, including schedules and
attachments, will be available for public inspection. Note,
however, the special rules for Schedule B (Form 990, 990-EZ,
or 990-PF), a required schedule for certain organizations that
file Form 990. Make sure the forms and schedules are clear
enough to photocopy legibly. For more information on public
inspection requirements, see Appendix D, Public Inspection of
Returns, and Pub. 557, Tax-Exempt Status for Your
Organization.
Signature. A Form 990 is not complete without a proper
signature. For details, see the instructions to Part II, Signature
Block.
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
a minimum of 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. Applicable law
and an organization’s policies can require that the organization
retain records longer than 3 years. Form 990, Part VI, line 14,
asks whether the organization has a document retention and
destruction policy.

I. Group Return

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 must round
off cents to whole dollars on the returns and schedules, unless
otherwise noted for particular questions. To round, drop
amounts under 50 cents and increase amounts from 50 to 99
cents to the next dollar. For example, $1.49 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. Make an entry (including a zero when
appropriate) on all lines requiring an amount or other
information to be reported. Do not leave any applicable lines
blank, unless expressly instructed to skip that line. If answering
a line is predicated on a “Yes” answer to the preceding line, and
if the organization’s answer to the preceding line was “No,” then
leave the “If Yes” line blank.

A central, parent, or like organization can file a group return on
Form 990 for two or more subordinate or local organizations
that are:
• Affiliated with the central organization at the time its annual
accounting period ends,
• Subject to the central organization’s general supervision or
control,
• Exempt from tax under a group exemption letter that is still
in effect, and
• Using the same accounting period as the central
organization.
The central organization cannot use a Form 990-EZ for the
group return.
A subordinate organization covered by a group exemption
ruling can file a separate return instead of being included in the
group return. If a subordinate organization is not required to
file a return, it need not be included in the group return or file a
separate return.
If the central organization is required to file a return for
itself, it must file a separate return and cannot be included in
the group return. See B. Organizations Not Required To File
Form 990 for a list of organizations not required to file.
Every year, each subordinate organization must authorize
the central organization in writing to include it in the group
return and must declare, under penalties of perjury, that the
authorization and the information it submits to be included in the
group return are true and complete.
The central organization should send the annual information
update required to maintain a group exemption ruling (a
separate requirement from the annual return) to:

All filers must file Schedule O (Form 990). Certain questions
require all filers to provide an explanation in Schedule O (Form
990). In general, answers can be explained or supplemented in
Schedule O (Form 990) if the allotted space in the form or other
schedule is insufficient, or if a “Yes” or “No” answer is required
but the organization wishes to explain its answer.
Reporting proper amounts. Some lines request information
reported on other forms filed by the organization (such as Form
W-2 or Form 990-T). If the organization is aware that the
amount actually reported on the other form is incorrect, it must
report on Form 990 the information that should have been
reported on the other form (in addition to filing an amended
form with the proper amount).
Inclusion of activities and items of disregarded entities and
joint ventures. An organization must report in its Form 990 all
of the revenues, expenses, assets, liabilities, and net assets or
funds of a disregarded entity of which it is the sole member,
and must report in its Form 990 its share of all such items of a
joint venture or other investment or arrangement treated as a
partnership for federal income tax purposes. This includes
passive investments. In addition, the organization generally
must report activities of a disregarded entity or a joint venture
in the appropriate parts of schedules of Form 990. For special
instructions regarding the treatment of disregarded entities and
joint ventures for various parts of the form, see Appendix F,
Disregarded Entities and Joint Ventures-Inclusion of Activities
and Items.

Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027
For special instructions regarding answering certain Form
990 questions about parts or schedules in the context of a
group return, see Appendix E.

J. Requirements for a Properly
Completed Form 990
All organizations filing Form 990 must complete Parts I through
XI of the Form 990, Schedule O (Form 990) and any schedules
for which a “Yes” response is indicated in Part IV. If an
organization is not required to file Form 990 but chooses to do

-8-

Page 9 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Assembling Form 990, schedules, and
attachments.

describe the amendments. See G. Amended Return/Final
Return, for more information.

Before filing Form 990, assemble the package of forms,
schedules, and attachments in the following order.
1. Core form with Parts I through XI completed, filed in
numerical order.
2. Schedules, completed as applicable, filed in alphabetical
order (see Form 990, Part IV for required schedules). All pages
of a required schedule must be submitted by Form 990 paper
filers, even if the filer is only required to complete certain parts
but not all of the schedule.
3. Attachments, completed as applicable. These include (a)
name change amendment to organizing document required by
item B under Heading; (b) list of subordinate organizations
included in a group return required by item H under Heading;
(c) reasonable cause explanation for a late-filed return; (d)
letters regarding termination of exempt status required by
Schedule N (Form 990 or 990-EZ); and (e) articles of merger or
dissolution, resolutions, and plans of liquidation or merger
required by Schedule N (Form 990 or 990-EZ).

Application pending. Check this box if the organization
has not yet filed either a Form 1023 or Form 1024 with the IRS,
or has filed one and is awaiting a response. If this box is
checked, the organization must complete all parts of Form 990
and any required schedules.
Item C. Name and address. Enter the organization’s legal
name on the “Name of organization” line. If the organization
operates under a name different from its legal name, enter the
alternate name on the “Doing Business As” (DBA) line. If
multiple DBA names will not fit on the line, enter one on the line
and enter the others on Schedule O (Form 990).
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, enter the box
number instead of the street address.
For foreign addresses, enter the information in the following
order: City, province or state, and the name of the country.
Follow the country’s practice in placing the postal code in the
address. Do not abbreviate the country name.
If a change in address occurs after the return is filed, use
Form 8822, Change of Address, to notify the IRS of the new
address.
Item D. Employer identification number (EIN). Use the EIN
provided to the organization for filing its Form 990 and federal
tax returns. The organization must have only one EIN. If it has
more than one and has not been advised which to use, notify
the:

Do not attach materials not authorized in the instructions or
not otherwise authorized by the IRS.

Specific Instructions
Heading. Items A–M
Complete items A through M.
Item A. Accounting period. File the 2009 return for calendar
year 2009 and fiscal years that began in 2009 and ended in
2010. For a fiscal year return, fill in the tax year space at the top
of page 1. See D. Accounting Periods and Methods for
additional information about accounting periods.

Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027
State the numbers the organization has, the name and
address to which each EIN was assigned, and the address of
the organization’s principal office. The IRS will advise the
organization which number to use.

Item B. Checkboxes
Address change, name change, and initial return.
Check the appropriate box if the organization changed its
address or legal name (not its “doing business as” name) since
it filed its previous return, or if this is the first time the
organization is filing either a Form 990 or 990-EZ.
If the organization changed its name, attach the following
documents.
IF the organization is . . .

THEN attach . . .

A corporation

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

A trust

Amendments to the trust
agreement signed by the trustee.

An unincorporated association

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

A subordinate organization in a group exemption

TIP that is filing an individual Form 990 return must use its
own EIN, not that of the central organization or of the
group return.
A section 501(c)(9) voluntary employees’ beneficiary

TIP association 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
personnel can 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. Name and address of principal officer. The address
provided must be a complete mailing address to enable the IRS
to communicate with the principal officer if necessary. If the
officer prefers to be contacted at the organization’s address
listed in item C, enter “same as C above.” For purposes of this
item, “principal officer” means an officer of the organization
who, regardless of title, has ultimate responsibility for
implementing the decisions of the organization’s governing
body, or for supervising the management, administration, or
operation of the organization.
Item G. Gross receipts. On Form 990, Part VIII, column A,
add line 6b (both columns (i) and (ii)), line 7b (both columns (i)
and (ii)), line 8b, line 9b, line 10b, and line 12, and enter the
total here. See the exceptions from filing Form 990 based on
gross receipts and total assets as described in A. Who Must
File; B. Organizations Not Required To File Form 990;
Appendix B. How To Determine Whether an Organization’s

Terminated. Check this box if the organization has
terminated its existence or ceased to be a section 501(a) or
section 527 organization and is filing its final return as an
exempt organization or section 4947(a)(1) trust. For example,
an organization should check this box when it has ceased
operations and dissolved or has had its exemption revoked by
the IRS. An organization that checks this box must also attach
Schedule N (Form 990 or 990-EZ).
Amended return. Check this box if the organization
previously filed a return with the IRS for the same tax year and
is now filing another return for the same tax year to amend the
previously filed return. Enter in Schedule O (Form 990) which
parts and schedules of the Form 990 were amended and

-9-

Page 10 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Gross Receipts Are Normally $25,000 (or $5,000) or Less; and
Appendix C. Special Gross Receipts Tests For Determining
Exempt Status of Section 501(c)(7) and 501(c)(15)
Organizations.
Item H. Group returns. If the organization answers “No” to
line H(a), it should not check a box in line H(b). If the
organization answers “Yes” to line H(a) but “No” to line H(b),
attach a list (not on Schedule O (Form 990)) showing the name,
address, and EIN of each affiliated organization included in the
group return. A central or subordinate organization filing an
individual return should not attach such a list. Enter on line H(c)
the four-digit group exemption number (GEN) if the organization
is filing a group return, or if the organization is a central or
subordinate organization in a group exemption and is filing a
separate return. Do not confuse the four-digit GEN number with
the nine-digit EIN number reported on item D of the form’s
Heading. A central organization filing a group return must not
report its own EIN in item D, but report the special EIN issued
for use with the group return.
If attaching a list:
• Enter the form number (“Form 990”) and tax year,
• Enter the group exemption name and EIN,
• Enter the four-digit group exemption number (GEN), and
• Use the same size paper as the form.
Item I. Tax-exempt status. Check the applicable box. If the
organization is exempt under section 501(c), check the first box
and insert the appropriate subsection number within the
parentheses (for example, “3” for a 501(c)(3) organization).
Item J. Website. Enter the organization’s website address. If
the organization does not maintain a website, enter “N/A” (not
applicable).
Item K. Form of organization. Check the box describing the
organization’s legal entity form or status under state law in its
state of legal domicile. These include corporations, trusts,
unincorporated associations, and other entities (for example,
partnerships and limited liability companies).
Item L. Year of formation. Enter the year in which the
organization was legally created under state or foreign law. If a
corporation, enter the year of incorporation.
Item M. State of legal domicile. For a corporation, enter the
state of incorporation (country of incorporation for a foreign
corporation formed outside the United States). For a trust or
other entity, enter the state whose law governs the
organization’s internal affairs (or the foreign country whose law
governs for a foreign organization other than a corporation).

Line 7b. If the organization is not required to file a Form 990-T
for the tax year, enter “0”. If the organization has not yet filed
Form 990-T for the tax year, provide an estimate of the amount
it expects to report on Form 990-T, line 34, when it is filed.
Lines 8 – 19. If this is an initial return, or if the organization
filed Form 990-EZ or 990-PF in the prior year, leave the “Prior
Year” column blank. Use the same lines from the 2008 Form
990 to determine what to report for prior year revenue and
expense amounts.

Part II. Signature Block
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 can 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 return he
or she files for a corporation or association. For a trust, the
authorized trustee(s) must sign. The definition of “officer” for
purposes of Part II is different from the definition of officer (see
Glossary) used to determine which officers to report elsewhere
on the form and schedules.

Paid Preparer
Generally, anyone who is paid to prepare the return must sign
the return and fill in the other blanks in the Paid Preparer’s Use
Only area. An employee of the filing organization is not a paid
preparer.
The paid preparer must:

• Sign the return in the space provided for the preparer’s
signature,
• Enter the preparer information, and
• Give a copy of the return to the organization.

The paid preparer must enter the preparer’s identifying number
and the firm’s EIN only if filing Form 990 for a section
4947(a)(1) nonexempt charitable trust that is not filing Form
1041, U.S. Income Tax Return for Estates and Trusts. The
preparer’s identifying number is the preparer’s taxpayer
identification number (PTIN), if obtained, or the preparer’s
social security number (SSN).
The IRS is not authorized to redact the paid preparer’s
SSN if such SSN is entered on the paid preparer’s
CAUTION block. Because Form 990 is a publicly disclosable
document, any information entered on this block will be publicly
disclosed (see Appendix D). Accordingly, any paid preparer
whose identifying number must be listed on Form 990 can apply
for and obtain a PTIN using Form W-7P, Application for
Preparer Tax Identification Number.

!

Part I. Summary
Because Part I generally reports information reported

TIP elsewhere on the form, complete Part I after the other

Paid Preparer Authorization

parts of the form are completed. See C. Sequencing
Chart To Complete the Form, on page 6.
Complete lines 3 – 5 and 7 – 22 by using applicable
references made in Part I to other items.
Line 1. Describe the organization’s mission or its most
significant activities for the year, whichever the organization
wishes to highlight, on the summary page.
Line 2. Check this box if the organization answered “Yes,” to
Part IV, line 31 or 32, and complete Schedule N (Form 990 or
990-EZ), Part I or Part II.
Line 6. Enter the number of volunteers, full-time and
part-time, who provided volunteer services to the organization
during the reporting year. Organizations that do not keep track
of this information in their books and records or report this
information elsewhere (such as in annual reports or grant
proposals) can provide a reasonable estimate, and can use any
reasonable basis for determining this estimate. Organizations
can, but are not required, to provide an explanation on
Schedule O (Form 990) of how this number was determined,
the number of hours those volunteers served during the tax
year, and the types of services or benefits provided by the
organization’s volunteers.

On the last line of Part II, check “Yes” if the IRS can contact the
paid preparer who signed the return to discuss the return. This
authorization applies only to the individual whose signature
appears in the Paid Preparer’s Use Only section of Form 990. It
does not apply to the firm, if any, shown in that section.
By checking “Yes,” to this box, the organization is
authorizing the IRS to contact the paid preparer to answer any
questions that arise during the processing of the return. The
organization is also authorizing the paid preparer to:
• Give the IRS any information missing from the return,
• Call the IRS for information about processing the return, and
• Respond to certain IRS notices about math errors, offsets,
and return preparation.
The organization is not authorizing the paid preparer to bind
the organization to anything or otherwise represent the
organization before the IRS.
The authorization will automatically end no later than the due
date (excluding extensions) for filing of the organization’s 2010
Form 990. If the organization wants to expand the paid
preparer’s authorization or revoke it before it ends, see Pub.
947, Practice Before the IRS and Power of Attorney.

-10-

Page 11 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Check “No” if the IRS should contact the organization or its
principal officer listed in item F of the Heading rather than the
paid preparer.

VIII, column (A), line 2, and includes other amounts reported on
Part VIII, lines 3 – 11, as related or exempt function revenue.
Also include unrelated business income from a business that
exploits an exempt function, such as advertising in a journal.
For this purpose, charitable contributions and grants (including
the charitable contribution portion, if any, of membership dues)
reported on Part VIII, line 1, are not considered revenue derived
from program services.
Description of program services. For each program
service reported, include the following.
• Describe program service accomplishments through specific
measurements such as clients served, days of care provided,
number of sessions or events held, 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.
• Be clear, concise, and complete in the description. Use
Schedule O (Form 990) if additional space is needed.
Donated services. The organization can report the amount
of any donated services, or use of materials, equipment, or
facilities it received or used in connection with a specific
program service, on the lines for the narrative description of the
appropriate program service. However, do not include these
amounts in revenue, expenses, or grants reported on lines
4a – 4e, even if prepared in accordance with generally
accepted accounting principles.
Public interest law firm. A public interest law firm exempt
under section 501(c)(3) or section 501(c)(4) must include a list
of all the cases in litigation or that have been litigated during the
year. For each case:
• Describe the matter in dispute,
• Explain how the litigation will benefit the public generally, and
• Enter the fees sought and recovered.
See Rev. Proc. 92-59, 1992-2 C.B. 411.
Line 4d. Other program services. Enter on Schedule O
(Form 990) the organization’s other program services. The
detailed description required for the three largest program
services need not be provided for these other program services.
Section 501(c)(3) and 501(c)(4) organizations, and section
4947(a)(1) trusts, must report on line 4d their total revenues
reported on Part VIII, column (A), line 2, and their total
expenses (including grants) reported in Part IX, column (B) that
are attributable to these other program services, and must
report on line 4e their total program service expenses from lines
4a – 4d. For all other organizations, entering these amounts is
optional.

Part III. Statement of Program Service
Accomplishments
Part III requires reporting regarding the organization’s program
services and exempt purpose achievements. A program service
is an activity of an organization that accomplishes its exempt
purpose. Examples of exempt purpose achievements can
include:
• A section 501(c)(3) organization’s charitable activities such
as a hospital’s provision of charity care under its charity care
policy, a college’s provision of higher education to students
under a degree program, a disaster relief organization’s
provision of grants or assistance to victims of a natural disaster,
or a nursing home’s provision of rehabilitation services to
residents;
• A section 501(c)(5) labor union’s conduct of collective
bargaining on behalf of its members;
• A section 501(c)(6) business league’s conduct of meetings
for members to discuss business issues; or
• A section 501(c)(7) social club’s operation of recreational and
dining facilities for its members.
Do not report a fundraising activity as an exempt purpose
achievement unless it is substantially related to the
accomplishment of the organization’s exempt purposes (other
than by raising funds).
Line 1. Describe the organization’s mission as articulated in its
mission statement or as otherwise adopted by the
organization’s governing body, if applicable. If the organization
does not have a mission that has been adopted by its
governing body, enter “None.”
Line 2. Answer “Yes” if the organization undertook any new
significant program services during the tax year not described in
the prior year’s Form 990 or 990-EZ. Describe these items in
Schedule O (Form 990). If any are among the activities
described on Form 990, Part III, line 4, the organization can
reference the detailed description on line 4.
Line 3. Answer “Yes” if the organization made any significant
changes during the year in how it conducts its program services
to further its exempt purposes, or if the organization ceased
conducting significant program services that had been
conducted in a prior year. Describe these items on Schedule O
(Form 990).
An organization must report new, significant program

TIP services or significant changes in how it conducts
program services on its Form 990, Part III, rather than in
a letter to IRS Exempt Organizations Determinations (“EO
Determinations”). EO Determinations no longer issues letters
confirming the tax-exempt status of organizations that report
such new services or significant changes.
Lines 4a – 4c. All organizations must describe their
achievements for each of their three largest program services,
as measured by total expenses incurred. If there were three or
fewer of such activities, describe each program service activity.
The organization can report on Schedule O (Form 990)
additional activities that it considers of comparable or greater
importance, although smaller in terms of expenses incurred
(such as activities conducted with volunteer labor).
Code. For the 2009 tax year, leave this blank.
Expenses and grants. For each program service reported
on lines 4a – 4c, section 501(c)(3) and 501(c)(4) organizations
and section 4947(a)(1) trusts must enter total expenses
included on Part IX, column (B), line 25, and total grants and
allocations (if any) included within such total expenses that
were reported on Part IX, on column (B), lines 1 – 3. For all
other organizations, entering these amounts is optional.
Revenue. For each program service, section 501(c)(3) and
501(c)(4) organizations must report any revenue derived
directly from the activity, such as fees for services or from the
sale of goods that directly relate to the listed activity. This
revenue includes program service revenue reported on Part

Part IV. Checklist of Required Schedules
For each “Yes” answer to a question on Form 990, Part IV,
complete the applicable schedule (or part or line of the
schedule). See the Glossary and instructions for the pertinent
schedules for definitions of terms and explanations that are
relevant to questions in this part.
The organization is not required to answer “Yes” to a
question on Form 990, Part IV, or complete the schedule (or
part of a schedule) to which the question is directed if the
organization is not required to provide any information in the
schedule (or part of the schedule). Thus, a minimum dollar
threshold for reporting information on a schedule may be
relevant in determining whether the organization must answer
“Yes” to a question on Form 990, Part IV.
All pages of a required schedule should be filed by Form 990
paper filers, even if the filer is only required to complete certain
parts but not all of the schedule.
Line 1. Answer “Yes” if the organization is a section 501(c)(3)
or a section 4947(a)(1) organization that is not a private
foundation. Answer “Yes” if the organization claims section
501(c)(3) status but has not yet filed a Form 1023 application or
received a determination letter recognizing its section 501(c)(3)
status. All other organizations answer “No.”

-11-

Page 12 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Line 2. Answer “Yes” if any of the following are satisfied.
• A section 501(c)(3) organization met the 331/3% support test
of the regulations under sections 509(a)(1)/170(b)(1)(A)(vi) (in
such case, the organization must check “Yes” on Schedule A
(Form 990 or 990-EZ), Part II, line 16a or 16b), and received
from any one contributor, during the year, contributions of the
greater of $5,000 (in money or property) or 2% of the amount
on Form 990, Part VIII, line 1h.
• A section 501(c)(3) organization did not meet the 331/3%
support test of the regulations under sections 509(a)(1)/
170(b)(1)(A)(vi), and received during the year contributions of
$5,000 or more from any one contributor.
• A section 501(c)(7), 501(c)(8), or 501(c)(10) organization
received, during the year, contributions of any amount for use
exclusively for religious, charitable, scientific, literary, or
educational purposes, or the prevention of cruelty to children or
animals, or contributions of $5,000 or more not exclusively for
such purposes from any one contributor.
• Any other organization that received, during the year,
contributions of $5,000 or more from any one contributor.
Line 3. All organizations must answer this question, even if
they are not subject to a prohibition against political campaign
activities. Answer “Yes,” whether the activity was conducted
directly or indirectly through a disregarded entity or a joint
venture or other arrangement treated as a partnership for
federal income tax purposes and in which the organization is an
owner.
Line 4. Complete only if the organization is a section 501(c)(3)
organization. Other organizations leave this line blank.
Line 5. Complete only if the organization is a section
501(c)(4), 501(c)(5), or 501(c)(6) organization that receives
membership dues, assessments, or similar amounts as defined
in Rev. Proc. 98-19, 1998-1 C.B. 547. Other organizations
leave this line blank.
Line 6. Answer “Yes” if the organization maintained at any
time during the organization’s tax year a donor advised fund
or another similar fund or account (that is, any account over
which the donor or a person appointed by the donor had
advisory privileges with respect to the use or investment of any
portion of the account, but which does not constitute a donor
advised fund). Examples of other similar funds or accounts
include, but are not limited to, the types of funds or accounts
described as exceptions to the Glossary definition of a donor
advised fund.
Line 7. Answer “Yes” if the organization received or held any
conservation easement at any time during the year,
regardless of how the organization acquired the easement or
whether a charitable deduction was claimed by a donor of the
easement.
Line 8. Answer “Yes” if at any time during the year the
organization maintained collections of works of art, historical
treasures, or other similar assets as described within SFAS
116, regardless of whether the organization reported revenue
and assets related to such collections in its financial
statements.

See the instructions for Schedule D (Form 990), Part V, for the
definitions of these types of endowments.
Line 11. Answer “Yes” if the organization reported an amount
for land, buildings, or equipment on Part X, line 10: an amount
for other liabilities on Part X, line 25; or if its financial
statements for the tax year included a footnote that addresses
its liability for uncertain tax positions under FIN 48. Also,
answer “Yes” if the organization reported in Part X an amount
for investments-other securities, investments-program related,
or other assets, in any of lines 12,13, or 15, that is 5% or more
of the total assets reported on Part X, line 16.
Line 12. Answer “Yes” if the organization received a separate,
independent audited financial statement prepared in
accordance with generally accepted accounting principles
for the year for which it is completing this return. All other
organizations answer “No.” Do not answer “Yes” if the
organization was included in a consolidated audited financial
statement unless the organization also received a separate
audited financial statement.
An accountant’s compilation or review of financial
statements is not considered to be an audit and does not
produce an audited financial statement. If the organization
answers “No,” but has prepared, for the year for which it is
completing this return, a financial statement that was not
audited, the organization can (but is not required to) provide the
reconciliations contained on Schedule D (Form 990), Parts
XI – XIII.
Line 12A. Answer “Yes” if the organization was included in
consolidated, independent audited financial statements
prepared in accordance with generally accepted accounting
principles for the year for which it is completing this return. All
other organizations answer “No.”
Line 13. Answer “Yes” if the organization checked the box on
Schedule A (Form 990 or 990-EZ), Part I, line 2, indicating that
it is a school.
Lines 14 – 16. Answer “Yes” to line 14a if the organization
maintained an office, or had employees or agents, outside the
United States. Answer “Yes,” to line 14b if the organization had
aggregate revenue or expenses of more than $10,000 from or
attributable to grantmaking, fundraising activities, business,
investments, and program service activities outside the United
States. In the case of indirect investments made through
investment entities, the extent to which revenue or expenses
are taken into account in determining whether the $10,000
threshold is exceeded will depend upon whether the investment
entity is treated as a partnership or corporation for U.S. tax
purposes. For example, an organization with an interest in a
foreign partnership would need to take into account its share of
the partnership’s revenue and expenses in determining whether
the $10,000 threshold is exceeded. However, the organization
need not take into account or report any portion of the
revenues, expenses, or expenditures of a foreign corporation in
which it holds an investment, provided that the corporation is
treated as a separate corporation for U.S. tax purposes.
An organization that answers “Yes,” to line 14a should only
complete Schedule F (Form 990) if it satisfies one or more of
the dollar thresholds described on line 14b, 15, or 16 and
answers “Yes” to any of those questions.
Lines 17 – 19. Answer “Yes” to line 17 if the total amount
reported for professional fundraising services in Part IX (line
11e, plus portion of line 6 amount attributable to professional
fundraising services) exceeds $15,000.
Answer “Yes” to line 18 if the sum of the amounts reported
on lines 1c and 8a of Form 990, Part VIII exceeds $15,000. An
organization that answers “No” should consider whether to
complete Schedule G (Form 990 or 990-EZ) in order to report
its fundraising activities or gaming activities for state or other
reporting purposes.
Line 20. Answer “Yes” if the organization, directly or indirectly
through a disregarded entity or joint venture treated as a
partnership for federal income tax purposes, operated any
facility that at any time during the year was, or was required to
be, licensed, registered, or similarly recognized by a state as a

Organizations that answer “Yes” to line 8 often will

TIP answer “Yes” to Part IV, line 30, which addresses
current-year contributions of such items.
Line 9. Answer “Yes” if at any time during the organization’s
tax year the organization (1) had an escrow or custodial
account or (2) provided credit counseling services and/or
debt management plan services, such as credit repair or debt
negotiations.
Line 10. Answer “Yes” if the organization, a related
organization, or an organization formed and maintained
exclusively to further one or more exempt purposes of the
organization (such as a foundation formed and maintained
exclusively to hold endowment funds to provide scholarships
and other funds for a college or university described within
section 501(c)(3)), held assets in term endowment,
permanent endowment, or quasi-endowment funds at any
time during the year, regardless of whether the organization
follows SFAS 117 or reports endowments in Part X, line 32.

-12-

Page 13 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

hospital. Except in the case of a group return, do not include
facilities operated by another organization that is treated as a
separate taxable or tax-exempt corporation for federal income
tax purposes. For group returns, answer “Yes” if any affiliate
included within the group return operated such a facility.
Lines 21 – 22. Answer “Yes” if the organization reported more
than $5,000 on Part IX, line 1, or more than $5,000 on Part IX,
line 2.

501(c)(3) or 501(c)(4), skip lines 25a and 25b and leave them
blank.
An excess benefit transaction can have serious

TIP implications for the disqualified person that entered
into the transaction with the organization, any
organization managers that knowingly approved of the
transaction, and the organization itself. A section 501(c)(3) or
section 501(c)(4) organization that becomes aware that it may
have engaged in an excess benefit transaction should obtain
competent advice regarding section 4958, consider pursuing
correction of any excess benefit, and take other appropriate
steps to protect its interests with regard to such transaction and
the potential impact it could have on the organization’s
continued exempt status. See Appendix G, Section 4958
Excess Benefit Transactions, for a discussion of section 4958,
and Schedule L (Form 990 or 990-EZ), Part I, regarding
reporting of excess benefit transactions.
Lines 26 – 28. Lines 26 through 28 ask questions about loans
from the organization to certain interested persons (or
vice-versa), grants and other assistance provided by the
organization to certain interested persons, and certain direct
and indirect business transactions involving current or former
governance and management officials of the organization or
their associated businesses or family members. All
organizations must answer these questions. The organization
should review carefully the instructions for Schedule L (Form
990 or 990-EZ), Parts II – IV, before answering these questions
and completing Schedule L (Form 990 or 990-EZ).
Line 29. The organization is required to answer “Yes” to line
29 if it received during the year more than $25,000 in fair
market value of donations, gifts, grants or other contributions
of property other than cash, regardless of the manner received
(such as for use in a charity auction). Do not include
contributions of services or use of facilities.
Line 30. The organization is required to answer “Yes” to line
30 if during the year it received as a donation, gift, grant or
other contribution:
• any work of art, historical treasure, historical artifact,
scientific specimen, archeological artifact, or similar asset,
including a fractional interest, regardless of amount or whether
the organization maintains collections of such items; or
• any qualified conservation contributions regardless of
whether the contributor claimed a charitable contribution
deduction for such contribution.
See the Instructions for Schedule M (Form 990) for definitions
of these terms.
Lines 31 – 32. The organization must answer “Yes” if it
liquidated, terminated, dissolved, ceased operations, or
engaged in a significant disposition of net assets during the
year. See the Instructions for Schedule N (Form 990 or 990-EZ)
for definitions and explanations of these terms and transactions
or events. Organizations that answer “Yes” to either of these
questions must also check the box in Part I, line 2 and complete
Schedule N (Form 990 or 990-EZ), Part I or Part II.
Lines 33 – 35. The organization is required to report on
Schedule R (Form 990) certain information regarding ownership
or control of, and transactions with, its disregarded entities
and tax-exempt and taxable related organizations. An
organization that answers “Yes” to line 33 or 34 must enter its
disregarded entities and related organizations on Schedule R
(Form 990) and provide specified information regarding such
organizations. An organization that is a controlling
organization under section 512(b)(13) with respect to a
controlled entity must answer “Yes” to line 35 and report
transfers to or from the controlled entity. See the Glossary and
the Instructions for Schedule R (Form 990) for definitions of
these terms.
Line 36. Complete line 36 only if the organization is a section
501(c)(3) organization or a section 4947(a)(1) trust. All other
organizations leave this line blank and go to line 37. See the
Glossary and the Instructions to Schedule R (Form 990) for the
types of transfers required to be reported on Schedule R (Form
990), Part V, line 2.

Organizations that answer “No” to lines 21 and 22

TIP should consider whether to complete Schedule I (Form
990) in order to report the provision of grants and other
assistance in the United States for state or other reporting
purposes.
Line 23. Answer “Yes” if the organization:
• Listed in Part VII a former officer, director, trustee, key
employee, or highest compensated employee; or
• Reported for any person listed in Part VII more than
$150,000 of reportable compensation and other
compensation.
Also answer “Yes” if, under the circumstances described in
the instructions to Part VII, Section A, line 5, the filing
organization had knowledge that any person listed in Part VII,
Section A, received or accrued compensation from an
unrelated organization for services rendered to the filing
organization.
Line 24. Lines 24a – 24d involve questions regarding
tax-exempt bonds. All organizations must answer “Yes” or
“No” on line 24a. Those organizations that answer “Yes” on line
24a must also answer lines 24b through 24d and complete
Schedule K (Form 990) . Those that answer “No” to line 24a
can skip to line 25.
Line 24a. Answer “Yes” and complete Schedule K (Form
990) for each tax-exempt bond issued after December 31,
2002 (including refunding bonds) with an outstanding principal
amount of more than $100,000 as of the last day of the
organization’s tax year.
Line 24b. For purposes of line 24b, the organization need
not include the following as investments of proceeds.
• Any investment of proceeds relating to a reasonably
required reserve or replacement fund as described in section
148(d).
• Any investment of proceeds properly characterized as
replacement proceeds as defined in Regulations section
1.148-1(c).
• Any investment of net proceeds relating to a refunding
escrow as defined in Regulations section 1.148-1(b).
Temporary period exceptions are described in section 148(c)
and Regulations section 1.148-2(e). For example, there is a
3-year temporary period applicable to proceeds spent on
expenditures for capital projects and a 13-month temporary
period applicable to proceeds spent on working capital
expenditures.
Line 24c. For purposes of line 24c, the organization is
treated as maintaining an escrow account if such account is
maintained by a trustee with respect to tax-exempt bonds
issued for the benefit of the organization.
Line 24d. Answer “Yes” if the organization has received an
advance ruling that its obligations were issued on behalf of a
state or local governmental unit (see Rev. Proc. 82-26, 1982-1
C.B. 476); meets the conditions for issuing tax-exempt bonds
as set forth in Rev. Rul. 63-20, 1963-1 C.B. 24; or is a
constituted authority organized by a state or local
governmental unit specifically to issue tax-exempt bonds in
order to further public purposes (see Rev. Proc. 57-187, 1957-1
C.B. 65). Also answer “Yes” if the organization has outstanding
qualified scholarship funding bonds under section 150(d) or
bonds of a qualified volunteer fire department under section
150(e).
Lines 25a – 25b. Complete lines 25a and 25b only if the
organization is a section 501(c)(3) or section 501(c)(4)
organization. If the organization is not described in section

-13-

Page 14 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Line 37. Answer “Yes” if at any time during the year the
organization conducted more than 5 percent of its activities,
measured by total gross revenue for the tax year or total
assets of the organization at the end of its tax year, whichever
is greater, through an unrelated organization that is treated as
a partnership for federal income tax purposes. The 5 percent
test is applied on a partnership by partnership basis, although
direct ownership by the organization and indirect ownership
through disregarded or tiered entities is aggregated for this
purpose. The organization need not report on Schedule R
(Form 990) Part VI, either (1) the conduct of activities through
an organization treated as a taxable or tax-exempt corporation
for federal income tax purposes, or (2) unrelated partnerships
that meet both of the following conditions.
• 95% or more of the filing organization’s gross revenue from
the partnership for the partnership’s tax year ending with or
within the organization’s tax year is described in sections
512(b)(1), 512(b)(2), 512(b)(3), and 512(b)(5), such as interest,
dividends, royalties, rents, and capital gains (including
unrelated debt-financed income); and
• The primary purpose of the filing organization’s investment in
the partnership is the production of income or appreciation of
property and not the conduct of a section 501(c)(3) charitable
activity such as program-related investing.
Line 38. Answer “Yes,” if the organization completed Schedule
O (Form 990).

including common paymasters and payroll agents, for the
calendar year ending with or within the filing organization’s tax
year.
Line 2b. If the organization reported at least one employee on
line 2a, answer whether it filed all required federal employment
tax returns (which include Form 940, Employer’s Federal
Unemployment (FUTA) Tax Return, and Form 941, Employer’s
Quarterly Federal Tax Return) relating to such employees. For
more information, see the discussion of employment taxes in
Pub. 557.
Line 3a. Check “Yes” on line 3a if the organization’s total
gross income from all of its unrelated trades or 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, Tax
on Unrelated Business Income of Exempt Organizations, for a
description of unrelated business income and the Form 990-T
filing requirements for organizations having such income.
Neither Form 990-T nor Form 990 is a substitute for the
other. Report on Form 990 items of income and
CAUTION expense that are also required to be reported on Form
990-T when the organization is required to file both forms.
Line 3b. Answer “Yes” if the organization filed Form 990-T by
the time this Form 990 is filed. Check “No” if the organization
has filed an extension but has not filed the Form 990-T. If “No,”
provide an explanation on Schedule O (Form 990).

!

Schedule O (Form 990) must be completed and filed by

All tax-exempt organizations must pay estimated taxes
with respect to their unrelated business income if they
CAUTION expect their tax liability to be $500 or more. Use Form
990-W, Estimated Tax on Unrelated Business Taxable Income
For Tax-Exempt Organizations, to compute these amounts.
Line 4a. Answer “Yes” if either (1) or (2) below applies.
1. At any time during the calendar year ending with or
within the organization’s tax 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 all such 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.

TIP all organizations that file Form 990. All filers must

!

provide narrative responses to certain questions (for
example, Part VI, lines 11A and 19) on Schedule O. Certain
filers must provide narrative responses to other questions (for
example, Part III, line 4d; Part V, line 3b; Part VI, lines 2-7b, 9,
12c, and 15a-b for “Yes” responses; Part VI, lines 8a-b and 10b
for “No” responses; Part XI, line 3b for “No” response). All filers
can supplement their answers to other Form 990 questions on
Schedule O.

Part V. Statements Regarding Other IRS
Filings and Tax Compliance
See Glossary for definition of terms used in the

TIP questions in this section.
Some questions in this part pertain to other IRS forms.

If “Yes,” file Form TD F 90-22.1, Report of Foreign Bank and
Financial Accounts, by June 30 after the end of the calendar
year with the Department of the Treasury at the address shown
on the form. Do not file Form TD F 90-22.1 with the IRS or
attach it to Form 990.
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.
Line 4b. Enter the name of each foreign country in which a
foreign account described on line 4a is located.
Line 5. Answer “Yes” on line 5a if the organization was party
to a prohibited tax shelter transaction as described in section
4965(e) at any time during the organization’s tax year. A
prohibited tax shelter transaction is any listed transaction, within
the meaning of section 6707A(c)(2), and any prohibited
reportable transaction. 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).
An organization that files Form 990 (other than a section 527
political organization) and that is a party to a prohibited tax
shelter transaction must file Form 8886-T, Disclosure by
Tax-Exempt Entity Regarding Prohibited Tax Shelter
Transaction, and may also have to file Form 4720, Return of
Certain Excise Taxes Under Chapters 41 and 42 of the Internal
Revenue Code, and pay an excise tax imposed by section
4965. For more information, see the instructions to Forms
8886-T and 4720.

TIP Forms are available by calling 1-800-TAX-FORM
(1-800-829-3676) or by downloading from the IRS
website at www.irs.gov. Most forms and publications are also
available at your local IRS office. See also Appendix H, Forms
and Publications To File or Use.
Line 1a. The organization must use Form 1096 to transmit
paper Forms 1099, 1098, 5498, and W-2G to the IRS, which
are information returns reporting certain amounts paid or
received by the organization. Report all such returns filed for
the calendar year ending with or within the organization’s tax
year. If the organization transmits any of these forms
electronically, add this number to the total reported. Examples
of payments requiring Form 1099 reporting include certain
payments to independent contractors for services rendered.
Report on this line Forms 1099, 1098, 5498, and W-2G filed by
reporting agents of the filing organization, including common
paymasters and payroll agents, for the calendar year ending
with or within the organization’s tax year.
Line 1b. Form W-2G pertains to certain gambling winnings.
Line 1c. For more information on backup withholding for
missing or incorrect names or taxpayer identification numbers,
see Pub. 1281, Backup Withholding for Missing and Incorrect
Name/TIN(s). If back-up withholding rules did not apply to the
organization because it did not make a reportable payment to a
vendor or provide reportable gaming (gambling) winnings to a
prize winner, then leave line 1c blank.
Line 2a. Include on this line the number of the organization’s
employees reported on a Form W-3 by both the filing
organization and reporting agents of the filing organization,

-14-

Page 15 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Line 6. Answer “Yes” only if the organization has annual gross
receipts that are normally greater than $100,000 and if it
solicited contributions not deductible under Code section 170
during the tax year.
Any fundraising solicitation (including solicitation of member
dues) 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 easily recognizable format whether the solicitation is
made in written or printed form, by television or radio, or by
telephone.
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.
All organizations that qualify under section 170(c) to receive
contributions that are deductible as charitable contributions for
federal income tax purposes (such as domestic section
501(c)(3) organizations other than organizations that test for
public safety) should answer “No” on line 6a.
Line 7. Line 7 is directed only to organizations that can receive
deductible charitable contributions under section 170(c). See
Pub. 526, Charitable Contributions, for a description of such
organizations. All other organizations should leave lines 7a
through 7h blank and go to line 8.
Lines 7a and 7b. If a donor makes a payment in excess of
$75 partly as a contribution and partly in consideration for
goods or services provided by the organization, the
organization generally must notify the donor of the value of
goods and services provided.

produced by donated qualified intellectual property. Qualified
intellectual property is any patent, copyright (other than certain
self-created copyrights), trademark, trade name, trade secret,
know-how, software (other than certain “canned” or
“off-the-shelf” software or self-created software), or similar
property, or applications or registrations of such property. If the
organization did not receive a contribution of qualified
intellectual property, leave line 7g blank.
Line 7h. A donor of a (1) motor vehicle for use on public
roads, (2) a boat, or an (3) airplane cannot claim a charitable
contribution deduction in excess of $500 unless the donee
organization provides the donor with a Form 1098-C,
Contributions of Motor Vehicles, Boats, and Airplanes, with
respect to the donation (or a written acknowledgment with the
same information). See the instructions for Form 1098-C for
more information. If the organization did not receive a
contribution of a car, boat, airplane, or other vehicle, leave line
7h blank.
Line 8. A sponsoring organization of a donor advised fund
must answer “Yes” if any one of its donor advised funds had
excess business holdings at any time during the organization’s
tax year. A section 509(a)(3) supporting organization of the
type described below must answer “Yes” if it had excess
business holdings at any time during the organization’s tax
year. All other organizations should leave this line blank and go
to line 9. If “Yes,” see the instructions for Schedule C of Form
4720 to determine whether the organization is subject to the
excess business holdings tax under section 4943 and is
required to file Form 4720.
Donor advised funds. For purposes of the excise tax on
excess business holdings under section 4943, a donor advised
fund is treated as a private foundation.
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 a supported organization of such
Type II supporting organization.
To determine whether the organization is a supporting
organization and if so, what type of supporting organization it is,
see the Instructions for Schedule A (Form 990 or 990-EZ), Part
I, line 11.
Line 9. Line 9 is required to be completed by sponsoring
organizations maintaining a donor advised fund. All other
organizations can leave this line blank and go to line 10.
Line 9a. Answer “Yes” if the organization made any taxable
distributions under section 4966 during the organization’s tax
year.
Under section 4966, a taxable distribution includes a
distribution from a donor advised fund to an individual. A
taxable distribution also includes a distribution from a donor
advised fund to an estate, partnership, association, company,
or corporation unless:
• The distribution is for a charitable purpose (for example, a
purpose described in section 170(c)(2)(B)), and
• The organization exercises expenditure responsibility with
respect to the distribution.
The above does not apply to distributions to any organization
described in section 170(b)(1)(A) (other than a disqualified
supporting organization, defined in section 4966(d)(4)), to the
sponsoring organization of such donor advised fund, or to any
other donor advised fund.
Line 9b. Answer “Yes” if the organization made a
distribution from a donor advised fund to a donor, donor
advisor, or related person during the organization’s tax year.
For purposes of this question, a related person is any family
member of the donor or donor advisor and any 35% controlled
entity (as defined in section 4958(f)) of the donor or donor
advisor.

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.
See section 6113 and Notice 88-120, 1988 – 2 C.B. 454.

TIP
Lines 7c and 7d. If the organization is required to file Form
8282, Donee Information Return, to report information to the
IRS and to donors about dispositions of certain donated
property made within 3 years after the donor contributed the
property, it must answer “Yes” and indicate number of Forms
8282 filed.
Lines 7e and 7f. If, in connection with a transfer to or for
the use of the 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 on
Form 8870, Information Return for Transfers Associated with
Certain Personal Benefit Contracts, the premiums it paid, and
the premiums paid by others but treated as paid by the
organization. The organization must report and pay an excise
tax, equal to premiums paid, on Form 4720. A personal benefit
contract is generally 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)).
Line 7g. Form 8899, Notice of Income from Donated
Intellectual Property, must be filed by certain organizations that
received a charitable gift of qualified intellectual property that
produces net income. The organization should check “Yes” if it
provided all required Forms 8899 for the year for net income

-15-

Page 16 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

If an organization makes a distribution from a donor
advised fund resulting from the advice of a donor, donor
CAUTION advisor, family member, or a 35% controlled entity of
any of these persons, which distribution directly or indirectly
provides a more than incidental benefit to one of such persons,
section 4967 imposes a tax on (1) the person upon whose
advice the distribution was made, (2) the beneficiary of the
distribution, and (3) the fund manager for knowingly agreeing to
make the distribution. The persons liable for the section 4967
tax must file Form 4720 to pay the tax. If an organization makes
a distribution from a donor advised fund to a donor, donor
advisor, family member, or 35% controlled entity of these
persons, then the transaction might be a section 4958
transaction. Such transactions include any grant, loan,
compensation, or other similar payment to these persons, as
well as any other payment resulting in excess benefit.
Line 10. Answer lines 10a and 10b only if the organization is
exempt under section 501(c)(7).

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.
5. From any asset exchange or conversion transaction.

!

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

TIP 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 10a. Enter the amount of initiation fees, capital
contributions, and unusual amounts of income included in Part
VIII. Statement of Revenue, line 12, Total Revenue, but not
included in the definition of gross receipts for section 501(c)(7)
exemption purposes as discussed in Appendix C. However, if
the organization is a college fraternity or sorority that charges
membership initiation fees but not annual dues, do not include
such initiation fees.
Line 10b. Enter the amount of gross receipts included in
Part VIII. Statement of Revenue, line 12, Total Revenue,
derived from the general public for use of the organization’s
facilities, that is, from persons other than members or their
spouses, dependents, or guests.

For a mutual or cooperative telephone company, gross
income 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,
from qualified pole rentals, from the sale of display listings in a
directory furnished to the telephone company’s members, or
from prepayment of a loan under section 306A, section 306B,
or section 311 of the Rural Electrification Act of 1936 (as in
effect on January 1, 1987).
Line 12. All organizations that are not section 4947(a)(1) trusts
are to leave line 12 blank.
If a section 4947(a)(1) nonexempt charitable trust has no
taxable income under Subtitle A, its filing of Form 990 can be
used to meet its income tax return filing requirement under
section 6012. Such a trust must, if it answers “Yes” on line 12a,
report its tax-exempt interest received or accrued (if reporting
under the accrual method) during the tax year on line 12b.

Part VI. Governance, Management, and
Disclosure
All organizations must complete Part VI. Use Schedule O (Form
990) to provide required supplemental information as described
in this part, and to provide any additional information that the
organization considers relevant to this part.

Include the amount entered on line 10b of Form 990 on

Part VI requests information regarding an organization’s
governing body and management, governance policies, and
disclosure practices. Although federal tax law generally does
not mandate particular management structures, operational
policies, or administrative practices, every organization is
required to answer each question in Part VI. For example, all
organizations must answer lines 11 and 11A, which ask about
the organization’s process, if any, it uses to review Form 990,
even though the governing body is not required by federal tax
law to review Form 990.

TIP the club’s Form 990-T if required to be filed. Investment
income earned by a section 501(c)(7) organization is not
tax-exempt income unless set aside for the following purposes:
religious, charitable, scientific, literary, educational, 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.
Line 11. Answer lines 11a and 11b only if the organization is
exempt under section 501(c)(12).
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 means gross
receipts without reduction for any cost of goods sold.
Gross income for mutual or cooperative electric companies
is figured by excluding any income received or accrued from the
following.
1. Qualified pole rentals.
2. Any provision or sale of electric energy transmission
services or ancillary services if the services are provided on a

Even though the information on policies and procedures
requested in Section B generally is not required under the
Internal Revenue Code, the IRS considers such policies and
procedures to generally improve tax compliance. The absence
of appropriate policies and procedures can lead to opportunities
for excess benefit transactions, inurement, operation for
non-exempt purposes, or other activities inconsistent with
exempt status. Whether a particular policy, procedure, or
practice should be adopted by an organization depends on the
organization’s size, type, and culture. Accordingly, it is
important that each organization consider the governance
policies and practices that are most appropriate for that
organization in assuring sound operations and compliance with
tax law. For more governance information relating to charities,
see www.irs.gov/eo and click on life cycle.

-16-

Page 17 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Section A. Governing Body and Management

charitable or other class served by the organization in the
exercise of its exempt function, such as being a member of a
section 501(c)(6) organization, so long as the financial benefits
comply with the organization’s terms of membership.

Line 1a. The governing body is the group of persons
authorized under state law to make governance decisions on
behalf of the organization and its shareholders or members, if
applicable. The governing body is, generally speaking, the
board of directors (sometimes referred to as board of
trustees) of a corporation or association, or the board of
trustees of a trust (sometimes referred to simply as the trustees,
or trustee, if only one trustee).
Enter the number, as of the end of the organization’s tax
year, of members of the governing body of the organization
with power to vote on all matters that come before the
governing body (other than when a conflict of interest
disqualifies the member from voting). If members of the
governing body do not all have the same voting rights, explain
material differences on Schedule O (Form 990).
If the organization’s governing body delegated authority to
act on its behalf to an executive committee or similar committee
with broad authority to act on behalf of the governing body, and
the committee held such authority at any time during the
organization’s tax year, describe on Schedule O (Form 990)
the composition of the committee, whether any of the
committee’s members are not on the governing body, and the
scope of the committee’s authority. The organization need not
describe on Schedule O (Form 990) delegations of authority
that are limited in scope to particular areas or matters, such as
delegations to an audit committee, investment committee, or
compensation committee of the governing body.
Line 1b. Enter the number of independent voting members of
the organization’s governing body as of the end of the
organization’s tax year. A member of the governing body is
considered “independent” only if all three of the following
circumstances applied at all times during the organization’s tax
year.
1. The member was not compensated as an officer or other
employee of the organization or of a related organization (see
the instructions for Schedule R (Form 990)) except as provided
in the religious exception discussed below.
2. The member did not receive total compensation or other
payments exceeding $10,000 during the organization’s tax year
from the organization and related organizations as an
independent contractor, other than reasonable
compensation for services provided in the capacity as a
member of the governing body. For example, a person who
receives reasonable expense reimbursements and reasonable
compensation as a director of the organization does not cease
to be independent merely because he or she also receives
payments of $7,500 from the organization for other
arrangements.
3. Neither the member, nor any family member of the
member, was involved in a transaction with the organization
(whether directly or indirectly through affiliation with another
organization) that is required to be reported on Schedule L
(Form 990 or 990-EZ) for the organization’s tax year, or in a
transaction with a taxable or tax-exempt related organization of
a type and amount that would be reportable on Schedule L
(Form 990 or 990-EZ) if required to be filed by the related
organization.

Example 1. B is a voting member of the organization’s
board of directors. B is also a partner with a profits and capital
interest greater than 5% in a law firm, C, that charged $120,000
to the organization for legal services in a court case. The
transaction between C and the organization must be reported
on Schedule L (Form 990 or 990-EZ) because it is a transaction
between the organization and an entity of which B is a more
than 5% owner, and because the payment to C from the
organization exceeded $100,000 (see the instructions to
Schedule L (Form 990 or 990-EZ), Part IV, regarding both
factors). Accordingly, B is not an independent member of the
governing body because the $120,000 payment must be
reported on Schedule L (Form 990 or 990-EZ) as an indirect
business transaction with B. If B were an associate attorney (an
employee) rather than a partner with a greater than 5% interest,
and not an officer, director, trustee, key employee, or owner of
the law firm, the transaction would not affect B’s status as an
independent member of the organization’s governing body.
Example 2. D is a voting member of both the organization’s
governing body and the governing body of C, a related
organization. D’s daughter, E, received $40,000 in taxable
compensation as a part-time employee of C. D is not an
independent member of the governing body, because E
received compensation from C, a related organization to D, and
the compensation was of a type (compensation to a family
member of a member of C’s governing body) and amount (over
$10,000) that would be reportable on Schedule L (Form 990 or
990-EZ) if the related organization, C, were required to file
Schedule L (Form 990 or 990-EZ).
See also Examples 2 and 3 in the Instructions for Part VII,
Section A, line 5 on page 30.
Reasonable effort. The organization need not engage in
more than a reasonable effort to obtain the necessary
information to determine the number of independent voting
members of its governing body and can rely on information
provided by such members. For instance, the organization can
rely on information it obtains in response to a questionnaire
sent annually to each member of the governing body that
includes the name, title, date, and signature of each person
reporting information, and containing the pertinent instructions
and definitions for line 1b, to determine whether the member is
or is not independent.
Line 2. Answer “Yes” if any of the organization’s officers,
directors, trustees, or key employees, as reported in Part VII,
Section A, had a family relationship or business relationship
with another of the organization’s officers, directors, trustees, or
key employees, as reported in Part VII, Section A, at any time
during the organization’s tax year. For each family and
business relationship, identify the persons and describe their
relationship on Schedule O (Form 990). It is sufficient to enter
“family relationship” or “business relationship” without greater
detail.
Business relationship. Business relationships between
two persons include any of the following.
1. One person is employed by the other in a sole
proprietorship or by an organization with which the other is
associated as a trustee, director, officer, key employee, or
greater-than-35% owner.
2. One person is transacting business with the other (other
than in the ordinary course of either party’s business on the
same terms as are generally offered to the public), directly or
indirectly, in one or more contracts of sale, lease, license, loan,
performance of services, or other transaction involving transfers
of cash or property valued in excess of $10,000 in the
aggregate during the organization’s tax year. Indirect
transactions are transactions with an organization with which
the one person is associated as a trustee, director, officer, key
employee, or greater-than-35% owner. Such transactions do
not include charitable contributions to tax-exempt organizations.

A member of the governing body is not considered to lack
independence merely because of the following circumstances.
1. The member is a donor to the organization, regardless of
the amount of the contribution.
2. Religious exception: The member has taken a bona fide
vow of poverty and either (a) receives compensation as an
agent of a religious order or a section 501(d) religious or
apostolic organization, but only under circumstances in which
the member does not receive taxable income (see Rev. Rul.
77-290, 1977-2 C.B. 26 and Rev. Rul. 80-332, 1980-2 C.B. 34)
or (b) belongs to a religious order that receives sponsorship or
payments from the organization or a related organization which
do not constitute taxable income to the member.
3. The member receives financial benefits from the
organization solely in the capacity of being a member of the

-17-

Page 18 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

3. The two persons are each a director, trustee, officer, or
greater than 10% owner in the same business or investment
entity (but not in the same tax-exempt organization).

include investment management unless the filing organization
conducts investment management services for others.
Line 4. The organization must report significant changes to its
organizing or enabling document by which it was created
(articles of incorporation, association, or organization; trust
instrument; constitution; or similar document), and to its rules
governing its affairs commonly known as bylaws (or regulations,
operating agreement, or similar document). Report changes
made since the prior Form 990 was filed, or that were not
reported on any prior Form 990. Do not report changes to
policies described or established outside of the organizing or
enabling document and bylaws (or similar documents), such as
adoption of, or change to, a policy adopted by resolution of the
governing body that does not entail a change to the organizing
document or bylaws.
Examples of significant changes to the organizing or
enabling document or bylaws include changes to:
• The organization’s exempt purposes or mission;
• The number, composition, qualifications, authority, or duties
of the governing body’s voting members;
• The number, composition, qualifications, authority, or duties
of the organization’s officers or key employees;
• The role of the stockholders or membership in governance;
• The distribution of assets upon dissolution;
• The provisions to amend the organizing or enabling
document or bylaws;
• The quorum, voting rights, or voting approval requirements of
the governing body members or the organization’s stockholders
or membership;
• The policies or procedures contained within the organizing
documents or bylaws regarding compensation of officers,
directors, trustees, or key employees, conflicts of interest,
whistleblowers, or document retention and destruction; and
• The composition or procedures contained within the
organizing document or bylaws of an audit committee.
Example. Organization X has a written conflicts of interest
policy that is not contained within the organizing document or
bylaws. The policy is changed by board resolution. The policy
change does not need to be reported on line 4.
Examples of insignificant changes made to organizing or
enabling documents or bylaws that are not required to be
reported here include changes to the organization’s registered
agent with the state and to the required or permitted number or
frequency of governing body or member meetings.
Describe significant changes on Schedule O (Form 990), but
do not attach a copy of the amendments or amended document
to Form 990 (or recite the entire amended document verbatim),
unless such amended documents reflect a change in the
organization’s name. See the instructions for Item B under
Heading, Items A – M, regarding attachments required in the
event of a change in the organization’s name.

Ownership is measured by stock ownership (either voting
power or value) of a corporation, profits or capital interest in a
partnership or limited liability company, membership interest in
a nonprofit organization, or beneficial interest in a trust.
Ownership includes indirect ownership (for example, ownership
in an entity that has ownership in the entity in question); there
may be ownership through multiple tiers of entities.
Privileged relationship exception. For purposes of line 2,
a “business relationship” does not include a relationship
between an attorney and client, a medical professional
(including psychologist) and patient, or a priest/clergy and
penitent/communicant.
Example 1. B is an officer of the organization, and C is a
member of the organization’s governing body. B is C’s sister’s
spouse. The organization must report that B and C have a
family relationship.
Example 2. D and E are officers of the organization. D is
also a partner in an accounting firm with 300 partners (with a
1/300 interest in the firm’s profits and capital) but is not an officer,
director, trustee, or key employee of the accounting firm. D’s
accounting firm provides services to E in the ordinary course of
the accounting firm’s business, on terms generally offered to
the public, and receives $100,000 in fees during the year. The
relationship between D and E is not a reportable business
relationship, either because (1) it is in the ordinary course of
business on terms generally offered to the public, or (2) D does
not hold a greater-than-35% interest in the accounting firm’s
profits or capital.
Example 3. F and G are trustees of the organization. F is
the owner and CEO of an automobile dealership. G purchased
a $45,000 car from the dealership during the organization’s tax
year in the ordinary course of the dealership’s business, on
terms generally offered to the public. The relationship between
F and G is not a reportable business relationship because the
transaction was in the ordinary course of business on terms
generally offered to the public.
Example 4. H and J are members of the organization’s
board of directors. Both are CEOs of publicly traded
corporations and serve on each other’s boards. The relationship
between H and J is a reportable business relationship because
each is a director or officer in the same business entity.
Example 5. K is a key employee of the organization, and L
is on its board of directors. L is a greater-than-35% partner of a
law firm that charged $60,000 during the organization’s tax year
for legal services provided to K that were worth $600,000 at the
law firm’s ordinary rates. Thus, the ordinary course of business
exception does not apply. However, the relationship between K
and L is not a reportable business relationship, because of the
privileged relationship of attorney and client.
Reasonable effort. The organization is not required to
provide information about a family or business relationship
between two officers, directors, trustees, or key employees
if it is unable to secure the information after making a
reasonable effort to obtain it. An example of a reasonable
effort would be for the organization to distribute a questionnaire
annually to each such person that includes the name, title, date,
and signature of each person reporting information and
contains the pertinent instructions and definitions for line 2.
Line 3. Answer “Yes” if at any time during the organization’s
tax year the organization used a management company or
other person to perform any management duties customarily
performed by or under the direct supervision of officers,
directors, trustees, or key employees. Such management
duties include, but are not limited to, hiring, firing, and
supervising personnel, planning or executing budgets or
financial operations, or supervising exempt operations or
unrelated trades or businesses of the organization.
Management duties do not include administrative services
(such as payroll processing) that do not involve significant
managerial decision-making. Management duties also do not

An organization must report significant changes to its

TIP organizational documents in Form 990, Part VI, rather
than in a letter to EO Determinations. EO
Determinations no longer issues letters confirming the
tax-exempt status of organizations that report significant
changes to their organizational documents, though it will, on
request, issue an affirmation letter confirming an organization’s
name change. If an exempt organization becomes a different
legal entity, such as by changing its legal structure from a trust
to a corporation or by dissolving in one state and incorporating
in another, then a new exemption application is required to
establish that the new legal entity qualifies for exemption.
Line 5. Answer “Yes” if the organization became aware during
the organization’s tax year of a material diversion of its assets,
whether or not the diversion occurred during the year. If “Yes,”
explain the nature of the diversion, amounts or property
involved, corrective actions taken to address the matter, and
pertinent circumstances on Schedule O (Form 990), although
the person or persons who diverted the assets should not be
identified by name.
A diversion of assets includes any unauthorized conversion
or use of the organization’s assets other than for the

-18-

Page 19 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

organization’s authorized purposes, including but not limited to
embezzlement or theft. Report diversions by the organization’s
officers, directors, trustees, employees, volunteers,
independent contractors, grantees (diverting grant funds), or
any other person, even if not associated with the organization
other than by the diversion. A diversion of assets does not
include an authorized transfer of assets for fair market value
consideration, such as to a joint venture or for-profit subsidiary
in exchange for an interest in the joint venture or subsidiary. For
this purpose, a diversion is considered material if the gross
value of all diversions (not taking into account restitution,
insurance, or similar recoveries) discovered during the
organization’s tax year exceeds the lesser of (1) 5% of the
organization’s gross receipts for its tax year, (2) 5% of the
organization’s total assets as of the end of its tax year, or (3)
$250,000.
Note. A diversion of assets can in some cases constitute
inurement of the organization’s net earnings. In the case of
section 501(c)(3) and 501(c)(4) organizations, it also can be an
excess benefit transaction taxable under section 4958 and
reportable on Schedule L (Form 990 or 990-EZ).
Line 6. Answer “Yes” if the organization is organized as a
stock corporation, a joint-stock company, a partnership, a joint
venture, or a limited liability company. Also answer “Yes” if the
organization is organized as a non-stock, nonprofit, or
not-for-profit corporation or association with members. For
purposes of Form 990, Part VI, member means (without regard
to what a person, including a corporation or other legal entity, is
called in the governing documents) any person who, pursuant
to a provision of the organization’s governing documents or
applicable state law, has the right to participate in the
organization’s governance or to receive distributions of income
or assets from the organization. For instance, for purposes of
Part VI, a membership organization includes members with the
following kinds of rights.
1. The members elect the members of the governing body
(but not if the persons on the governing body are the
organization’s only members) or their delegates.
2. The members approve significant decisions of the
governing body.
3. The members can receive a share of the organization’s
profits or excess dues or a share of the organization’s net
assets upon the organization’s dissolution.

the governing body or committee (such as approving the
minutes of the prior meeting) or (2) 60 days after the date of the
meeting or written action. If “No,” explain on Schedule O (Form
990) the organization’s practices or policies, if any, regarding
documentation of meetings and written actions of its governing
body and committees with authority to act on its behalf.
Line 9. The IRS needs a mailing address to contact the
organization’s officers, directors, trustees, or key
employees. The organization can use its official mailing
address stated on the first page of Form 990 as the mailing
address for such persons. Otherwise, enter on Schedule O
(Form 990) the mailing addresses for such persons that are to
be contacted at a different address. Such information will be
available to the public.

Section B. Policies
Line 10a. Answer “Yes” if the organization had during its tax
year any local chapters, disregarded entities, branches, lodges,
units, or similar affiliates over which the organization has the
legal authority to exercise direct or indirect supervision and
control (whether or not in a group exemption) and local units
that are not separate legal entities under state law over which
the organization has such authority.
Line 10b. Written policies and procedures governing the
activities of chapters, branches, and affiliates to ensure their
consistency with activities of the organization are documents
used by the organization and its local units to address the
policies, practices, and activities of the local unit. Such policies
and procedures can include required provisions in the chapter’s
articles of organization or bylaws, a manual provided to
chapters, a constitution, or similar documents. If “No,” explain
on Schedule O (Form 990) how the organization ensures that
the local unit’s activities are consistent with its own or are
consistent with its tax-exempt purposes.
Note. The central organization (parent organization) named
in a group exemption letter is required to exercise oversight
over its subordinate organizations as a condition of the group
exemption.
Line 11. Answer “Yes” only if a copy of the organization’s final
Form 990 (including required schedules), as ultimately filed with
the IRS, was provided to each voting member of the
organization’s governing body, whether in paper or electronic
form, prior to its filing with the IRS. The organization can
answer “Yes” if it emails all of its governing body members a
link to a password-protected web site on which the entire Form
990 can be viewed, and notes in the email that the Form 990 is
available for review on that site.
Line 11A. Describe on Schedule O (Form 990) the process, if
any, by which any of the organization’s officers, directors,
trustees, board committee members, or management reviewed
the prepared Form 990, whether before or after it was filed with
the IRS, including specifics regarding who conducted the
review, when they conducted it, and the extent of any such
review. If no review was or will be conducted, enter “No review
was or will be conducted.”
Example. The return preparer emails a copy of the final
version of Form 990 to each Board member before it was filed.
However, no board member undertakes any review of the form
either before of after filing. Because such a copy of the final
version of the form was provided to each voting member of the
organization’s governing body before it was filed, the
organization can answer “Yes” even though no review took
place. The organization must describe its Form 990 review
process (or lack thereof) on Schedule O (Form 990).

Answer “No” if the organization is a trust for federal tax
purposes. Describe on Schedule O (Form 990) the classes of
members or stockholders with the rights described above.
Line 7a. Answer “Yes” on line 7a if at any time during the
organization’s tax year there were one or more persons (other
than the organization’s governing body itself, acting in such
capacity) that had the right to elect or appoint one or more
members of the organization’s governing body, whether
periodically, or as vacancies arise, or otherwise. If “Yes,”
describe on Schedule O (Form 990) the class or classes of
such persons and the nature of their rights.
Line 7b. Answer “Yes” on line 7b if at any time during the
organization’s tax year there were one or more persons
(whether members, stockholders, or otherwise) who had the
right to approve or ratify decisions of the organization’s
governing body, such as approval of the governing body’s
election or removal of members of the governing body, or
approval of the governing body’s decision to dissolve the
organization. If “Yes,” describe on Schedule O (Form 990) the
class or classes of such persons, the decisions that require
their approval, and the nature of their voting rights.
Line 8. Answer “Yes” on lines 8a and 8b if the organization
contemporaneously documented by any means permitted by
state law every meeting held and written action taken during the
organization’s tax year by its governing body and committees
with authority to act on behalf of the governing body (which
ordinarily do not include advisory boards). Documentation
permitted by state law can include approved minutes, email, or
similar writings that explain the action taken, when it was taken,
and who made the decision. For this purpose,
contemporaneous means by the later of (1) the next meeting of

Line 12a. Answer “Yes” if as of the end of the organization’s
tax year, the organization had a written conflict of interest
policy. A conflict of interest policy defines conflicts of interest,
identifies the classes of individuals within the organization
covered by the policy, facilitates disclosure of information that
can help identify conflicts of interest, and specifies procedures
to be followed in managing conflicts of interest. A conflict of
interest arises when a person in a position of authority over an
organization, such as an officer, director, or manager, can

-19-

Page 20 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

benefit financially from a decision he or she could make in such
capacity, including indirect benefits such as to family members
or businesses with which the person is closely associated. For
this purpose, a conflict of interest does not include questions
involving a person’s competing or respective duties to the
organization and to another organization, such as by serving on
the boards of both organizations, that do not involve a material
financial interest of, or benefit to, such person.
Example. B is a member of the governing body of X
Charity and of Y Charity, both of which are section 501(c)(3)
public charities with different charitable purposes. X Charity has
taken a public stand in opposition to a specific legislative
proposal. At an upcoming board meeting, Y Charity will
consider whether to publicly endorse the same specific
legislative proposal. While B may have a conflict of interest in
this decision, the conflict does not involve a material financial
interest of B’s merely as a result of Y Charity’s position on the
legislation.
Line 12b. Answer “Yes” if the organization’s officers,
directors, trustees, and key employees are required to
disclose or update annually (or more frequently) their interests
and those of their family members that could give rise to
conflicts of interest, such as a list of family members,
substantial business or investment holdings, and other
transactions or affiliations with businesses and other
organizations and those of family members.
Line 12c. If “Yes” to line 12c, describe on Schedule O (Form
990) the organization’s practices for monitoring proposed or
ongoing transactions for conflicts of interest and dealing with
potential or actual conflicts, whether discovered before or after
the transaction has occurred. The description should include an
explanation of which persons are covered under the policy, the
level at which determinations of whether a conflict exists are
made, and the level at which actual conflicts are reviewed. Also
explain any restrictions imposed on persons with a conflict,
such as prohibiting them from participating in the governing
body’s deliberations and decisions in the transaction.
Lines 13 and 14. A whistleblower policy encourages staff and
volunteers to come forward with credible information on illegal
practices or violations of adopted policies of the organization,
specifies that the organization will protect the individual from
retaliation, and identifies those staff or board members or
outside parties to whom such information can be reported. A
document retention and destruction policy identifies the record
retention responsibilities of staff, volunteers, board members,
and outsiders for maintaining and documenting the storage and
destruction of the organization’s documents and records.
Answer “Yes” if the organization had these policies in place as
of the last day of the organization’s tax year.

participating in or economically benefiting from the
compensation arrangement.
2. The member is in an employment relationship subject to the
direction or control of any person participating in or
economically benefiting from the compensation arrangement.
3. The member receives compensation or other payments
subject to approval by any person participating in or
economically benefiting from the compensation arrangement.
4. The member has a material financial interest affected by the
compensation arrangement.
5. The member approves a transaction providing economic
benefits to any person participating in the compensation
arrangement, who in turn has approved or will approve a
transaction providing economic benefits to the member.
See Regulations section 53.4958-6(c)(1)(iii).
• Use of data as to comparable compensation for similarly
qualified persons in functionally comparable positions at
similarly situated organizations.
• Contemporaneous documentation and recordkeeping with
respect to deliberations and decisions regarding the
compensation arrangement.
Answer “Yes” on line 15b if the process for determining
compensation of one or more officers or key employees other
than the top management official included all of the elements
listed above.
If the answer was “Yes” on line 15a or 15b, describe the
process on Schedule O (Form 990), identify the offices or
positions for which the process was used to establish
compensation of the persons who served in those offices or
positions, and enter the year in which this process was last
undertaken for each such person.
Line 16. Answer “Yes” on line 16a if at any time during its tax
year the organization invested in, contributed assets to, or
otherwise participated in a joint venture or similar arrangement
with one or more taxable persons. For purposes of line 16, a
joint venture or similar arrangement (or a “venture or
arrangement”) means any joint ownership or contractual
arrangement through which there is an agreement to jointly
undertake a specific business enterprise, investment, or
exempt-purpose activity without regard to (1) whether the
organization controls the venture or arrangement, (2) the legal
structure of the venture or arrangement, or (3) whether the
venture or arrangement is treated as a partnership for federal
income tax purposes, or as an association, or corporation for
federal income tax purposes. Disregard ventures or
arrangements that meet both of the following conditions.
1. 95% or more of the venture’s or arrangement’s income
for its tax year ending with or within the organization’s tax year
is described in sections 512(b)(1) – (5) (including unrelated
debt-financed income).
2. The primary purpose of the organization’s contribution to,
or investment or participation in, the venture or arrangement is
the production of income or appreciation of property.

Certain federal or state laws provide protection against

TIP whistleblower retaliation and prohibit destruction of
certain documents. For instance, while the federal
Sarbanes-Oxley legislation generally does not pertain to
tax-exempt organizations, it does impose criminal liability on
tax-exempt as well as other organizations for (1) retaliation
against whistleblowers that report federal offenses, and (2) for
destruction of records with the intent to obstruct a federal
investigation. See 18 U.S.C. sections 1513(e) and 1519. Also
note that an organization is required to keep books and records
relevant to its tax exemption and its filings with the IRS. Some
states provide additional protection for whistleblowers.
Line 15. Answer “Yes” on line 15a if the organization used a
process for determining compensation (reported in Part VII or
Schedule J (Form 990)) of the CEO, executive director, or other
person who is the top management official, that included all of
the following elements.
• Review and approval by a governing body or compensation
committee, provided that persons with a conflict of interest with
respect to the compensation arrangement at issue were not
involved. For purposes of this question, a member of the
governing body or compensation committee has a conflict of
interest with respect to a compensation arrangement if any of
the following circumstances apply.
1. The member (or a family member of the member) is

Answer “Yes” on line 16b if, as of the end of the
organization’s tax year, the organization had both:
1. adopted a written policy or procedure that requires the
organization to negotiate, in its transactions and arrangements
with other members of the venture or arrangement, such terms
and safeguards as are adequate to ensure that the
organization’s exempt status is protected, and
2. taken steps to safeguard the organization’s exempt
status with respect to the venture or arrangement.
Some examples of safeguards include the following:

• Control over the venture or arrangement sufficient to ensure

that the venture furthers the exempt purpose of the
organization.
• Requirements that the venture or arrangement give priority to
exempt purposes over maximizing profits for the other
participants.
• The venture or arrangement not engage in activities that
would jeopardize the organization’s exemption (such as political
intervention or substantial lobbying for a section 501(c)(3)
organization).

-20-

Page 21 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

• All contracts entered into with the organization be on terms

Part VII. Compensation of Officers,
Directors, Trustees, Key Employees,
Highest Compensated Employees, and
Independent Contractors

that are at arm’s length or more favorable to the organization.

Section C. Disclosure
Line 17. Use Schedule O (Form 990) if additional space is
necessary.

Overview. Form 990, Part VII requires the listing of the
organization’s current or former officers, directors, trustees,
key employees and highest compensated employees, and
current independent contractors, and reporting of certain
compensation information relating to such persons.

Some states require or permit the filing of Form 990 to

TIP fulfill state exempt organization or charitable solicitation
reporting requirements.

All organizations are required to complete Part VII, and when
applicable, Schedule J (Form 990), for certain persons.
Compensation must be reported for the calendar year ending
with or within the organization’s tax year. In some cases,
persons are reported in Part VII or Schedule J (Form 990) only
if their reportable compensation (as explained below) or total
compensation (as explained below) from the organization and
related organizations (as explained in the Glossary and in the
instructions for Schedule R (Form 990)) exceeds certain
thresholds. In some cases, compensation from an unrelated
organization must be reported on Form 990. See the
instructions for Part VII, Section A, line 5 on page 30. The
amount of compensation reported on Form 990, Part VII, for a
listed person may differ from the amount reported on Form 990,
Part IX, line 5, for such person due to factors such as a different
accounting period (calendar vs. fiscal year) or a different
accounting method.

Line 18. Check the box for “Own website” only if the
organization posted an exact reproduction (other than for
information permitted by law to be withheld from public
disclosure, such as the names and addresses of contributors
listed in Form 990, Schedule B) of its Form 990, Form 990-T
(for section 501(c)(3) organizations), or application for
recognition of exemption (Form 1023 or 1024) on its web site
during its tax year. Check the box for “Another’s website” only if
the organization provided, and another person or organization
posted on its website, an exact reproduction (other than for
information permitted by law to be withheld from public
disclosure, such as the names and addresses of contributors
listed in Form 990, Schedule B) of any such forms during the
tax year. Explain on Schedule O (Form 990) if the organization
does not make publicly available upon request any of Forms
1023, 1024, 990, or 990-T, if such disclosure is required by law.
Exempt organizations must make publicly available their Form
1023 or 1024 application for recognition of exemption.
Applications filed before July 15, 1987, need not be made
publicly available unless the organization had a copy on July
15, 1987. Organizations that file Form 990 must make it publicly
available for a period of three years from the date it is required
to be filed (including extensions) or, if later, is actually filed.
Organizations are not required to make publicly available the
names and addresses of contributors (as set forth on Schedule
B (Form 990, 990-EZ, or 990-PF), and on Form 1023 or 1024).
Section 501(c)(3) organizations that file Form 990-T also are
required to make their Form 990-T publicly available for the
corresponding three-year period, for forms filed after August 17,
2006 (unless the form was filed solely to request a refund of
telephone excise taxes). See Appendix D for more information
on public inspection requirements.

Form 990, Part VII relies on definitions of reportable
compensation and other compensation. Reportable
compensation generally refers to compensation reported on
Form W-2, box 5, and Form 1099-MISC, box 7. Organizations
also must report other compensation in Part VII, as discussed in
Other compensation beginning on page 23.
Organizations must report compensation for both current
and former officers, directors, trustees, key employees, and
highest compensated employees. The distinction between
current and former such persons is discussed below. The
determination of “former” uses a 5-year look-back period.
Organizations must report compensation from themselves
and from related organizations, which generally consist of
parents, subsidiaries, brother/sister organizations, supporting
organizations, and supported organizations. See the
instructions for Schedule R (Form 990) for a fuller discussion of
related organizations.

Line 19. Explain on Schedule O (Form 990) whether the
organization makes its governing documents, (for example,
articles of incorporation, constitution, bylaws, trust instrument)
conflict of interest policy, and financial statements (whether
or not audited) available to the general public, and if so, how it
makes them available to the public (for example, posting on the
organization’s website, posting on another website, providing
copies on request, inspection at an office of the organization,
etc.). If the organization does not make any of these documents
available to the public, enter “No documents available to the
public.”

Part VII, Section A requires reporting of officers, directors,
trustees, key employees, and up to five of the organization’s
highest compensated employees. Compensation from related
organizations must also be taken into account in determining a
person’s compensation and reported separately in Part VII,
Section A, columns (E) and (F).
Use Schedule J-2 (Form 990), Continuation Sheet for Form
990, if more space is needed to enter additional persons. Use
as many Schedules J-2 (Form 990) as needed.
Section B requires reporting of the five highest compensated
independent contractors. Section B does not require reporting
of compensation from related organizations.

Federal tax law does not require that such documents be
made publicly available unless they were included on a form
that is publicly available (such as Form 1023 or 1024).

Section A. Officers, Directors, Trustees, Key
Employees, and Highest Compensated
Employees

Line 20. Provide the name of the person who possesses the
organization’s books and records, and the business address
and telephone number of such person (or of the organization if
the books and records are kept by such person at a personal
residence). If the books and records are kept at more than one
location, provide the name, business address, and telephone
number of the person responsible for coordinating the
maintenance of the books and records. The organization is not
required to provide the address or telephone number of a
personal residence of an individual. If provided, however, such
information will be available to the public.

Overview. Organizations are required to enter in Part VII,
Section A, the following officers, directors, trustees, and
employees of the organization whose reportable
compensation from the organization and related
organizations (as explained in the instructions for Schedule R
(Form 990)) exceeded the following thresholds.
• Current officers, directors, and trustees (no minimum
compensation threshold).
• Current key employees (over $150,000 of reportable
compensation).

-21-

Page 22 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

• Current five highest compensated employees other than

If ultimate responsibility resides with two or more individuals (for
example, co-presidents or co-treasurers), who can exercise
such responsibility in concert or individually, then treat all such
individuals as officers.
Key employee. For purposes of Form 990, a current key
employee is an employee of the organization (other than an
officer, director or trustee) who meets all three of the
following tests, applied in the following order:
1. $150,000 Test: Receives reportable compensation
from the organization and all related organizations in excess
of $150,000 for the calendar year ending with or within the
organization’s tax year.
2. Responsibility Test: At any time during the calendar year
ending with or within the organization’s tax year:
a. Has responsibilities, powers, or influence over the
organization as a whole that is similar to those of officers,
directors, or trustees;
b. Manages a discrete segment or activity of the
organization that represents 10% or more of the activities,
assets, income, or expenses of the organization, as compared
to the organization as a whole; or
c. Has or shares authority to control or determine 10% or
more of the organization’s capital expenditures, operating
budget, or compensation for employees.
3. Top 20 Test: Is one of the 20 employees other than
officers, directors, and trustees who satisfy the $150,000 Test
and Responsibility Test with the highest reportable
compensation from the organization and related organizations
for the calendar year ending with or within the organization’s
tax year.

officers, directors, trustees, or listed key employees (over
$100,000 of reportable compensation).
• Former officers, key employees, and highest compensated
employees (over $100,000 of reportable compensation, with
special rules for former highest compensated employees).
• Former directors and trustees (over $10,000 of reportable
compensation in the capacity as a former director or trustee).
Special rules described beginning on page 24 apply to
disregarded entities of which the organization is the sole
member.
To determine which persons are current or former officers,
directors, trustees, key employees, or highest compensated
employees, see the instructions to Part VII, Section A, column
(C) beginning on page 24.
Fiscal year filers. To determine which persons are listed in
Part VII, Section A, the organization must use the calendar year
ending with or within the organization’s fiscal year for some
(those whose compensation must exceed minimum thresholds
in order to be reported) and the fiscal year for others. Report
officers, directors, and trustees that served at any time during
the fiscal year (such as “current” officers, directors, and
trustees). Report the following persons based on reportable
compensation and status for the calendar year ending within
the fiscal year.
• Current key employees (over $150,000 of reportable
compensation from the organization and related
organizations).
• Current five highest compensated employees (over
$100,000 of reportable compensation from the organization and
related organizations), other than current officers, directors,
trustees, and key employees.
• Former officers, key employees, and five highest
compensated employees (over $100,000 of reportable
compensation from the organization and related organizations,
with special rules for former highest compensated employees).
• Former directors and trustees (over $10,000 of reportable
compensation for services in the capacity as director or trustee
of the organization, from the organization and related
organizations).
Report compensation on Form 990, Part VII, for the calendar
year ending within the organization’s fiscal year, including that
of current officers, directors, and trustees, even if the fiscal year
is used to determine which such persons must be listed in Part
VII.
Director or trustee. A “director or trustee” is a member of the
organization’s governing body, but only if the member has
voting rights. A director or trustee that served at any time during
the organization’s tax year is deemed a current director or
trustee. Members of advisory boards that do not exercise any
governance authority over the organization are not considered
directors or trustees.
An “institutional trustee” is a trustee that is not an individual
or natural person but an organization. For instance, a bank or
trust company serving as the trustee of a trust is an institutional
trustee.
Officer. An officer is a person elected or appointed to
manage the organization’s daily operations. An officer that
served at any time during the organization’s tax year is deemed
a current officer. The officers of an organization are determined
by reference to its organizing document, bylaws, or resolutions
of its governing body, or as otherwise designated consistent
with state law, but, at a minimum, include those officers
required by applicable state law. Officers can include a
president, vice-president, secretary, treasurer and, in some
cases, a Board Chair. In addition, for purposes of Form 990,
including Part VII, Section A, and Schedule J (Form 990), treat
as an officer the following persons, regardless of their titles.
1. Top management official. The person who has ultimate
responsibility for implementing the decisions of the governing
body or for supervising the management, administration, or
operation of the organization.
2. Top financial official. The person who has ultimate
responsibility for managing the organization’s finances.

If the organization has more than 20 individuals who meet the
$150,000 Test and Responsibility Test , report as key
employees only the 20 individuals that have the highest
reportable compensation from the organization and related
organizations. Note that any others, up to five, might be
reportable as current highest compensated employees, with
over $100,000 in reportable compensation. Use the calendar
year ending with or within the organization’s tax year for
determining the organization’s current key employees.
An individual that is not an employee of the organization (or
of a disregarded entity of the organization) is nonetheless
treated as a key employee if he or she serves as an officer or
director of a disregarded entity of the organization and
otherwise meets the standards of a key employee set forth
above. See Disregarded Entities, on page 24, for treatment of
certain employees of a disregarded entity as a key employee of
the organization.
If an employee is a key employee of the organization for
only a portion of the year, that person’s entire compensation for
the calendar year ending with or within the organization’s tax
year, from both the filing organization and related organizations,
should be reported in Part VII, Section A.
Management companies and similar entities that are
independent contractors should not be reported as key
employees. The organization’s top management official and
top financial official are deemed officers rather than key
employees.
In the examples set forth below, assume the individual
involved is an employee that satisfies the $150,000 Test and
Top 20 Test and is not an officer, director, or trustee.
Example 1. T is a large section 501(c)(3) university. L is the
dean of the law school of T, which generates more than 10% of
the revenue of T, including contributions from alumni and
foundations. Although L does not have ultimate responsibility
for managing the university as whole, L meets the
Responsibility Test and is reportable as a key employee of T.
Example 2. S chairs a small academic department in the
College of Arts and Sciences of the same university, T,
described above. As department chair, S supervises faculty in
the department, approves the course curriculum, and oversees
the operating budget for the department. The department
represents less than 10% of the university’s activities, assets,
income, expenses, capital expenditures, operating budget, and

-22-

Page 23 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

employee compensation. Under these facts and circumstances,
S does not meet the Responsibility Test and is not a key
employee of T.
Example 3. U is a large acute-care section 501(c)(3)
hospital. U employs X as a radiologist. X gives instructions to
staff with respect to the radiology work X conducts, but X does
not supervise other U employees, manage the radiology
department, or have or share authority to control or determine
10% or more of U’s capital expenditures, operating budget, or
employee compensation. Under these facts and circumstances,
X does not meet the Responsibility Test and is not a key
employee of U.
Example 4. W is a cardiologist and head of the cardiology
department of the same hospital U described above. The
cardiology department is a major source of patients admitted to
U and consequently represents more than 10% of U’s income,
as compared to U as a whole. As department head, W
manages the cardiology department. Under these facts and
circumstances, W meets the Responsibility Test and is a key
employee of U.
Five highest compensated employees. The organization is
required to enter its current five highest compensated
employees whose reportable compensation combined from
the organization and related organizations is greater than
$100,000 for the calendar year ending with or within the
organization’s tax year and who are not also current officers,
directors, trustees, or key employees of the organization.
Such individuals are the “current” five highest compensated
employees. These can include persons who meet some but not
all of the tests for key employee status. The organization is not
required to enter more than the top five such persons, ranked
by amount of reportable compensation. Use the calendar year
ending with or within the organization’s tax year for determining
the organization’s current five highest compensated employees.
Example. X is an employee of Y University and is not an
officer, director, or trustee. X’s reportable compensation for the
calendar year exceeds $150,000, and X meets the
Responsibility Test. X would qualify as a key employee of Y,
except that 20 employees had higher reportable compensation
and otherwise qualify as key employees; therefore, those 20
are listed as the organization’s key employees. X has the
highest reportable compensation from the organization and
related organizations of all employees other than the 20 key
employees. X must be listed as one of the organization’s five
highest compensated employees.
$10,000 exceptions for reporting compensation. Report
compensation paid or accrued by the filing organization and
related organizations. Special rules apply with respect to
reporting reportable compensation and other compensation.

Reportable compensation. Reportable compensation
consists of:
• For officers and other employees, amounts required to be
reported on Form W-2, box 5;
• For directors and individual trustees, amounts required to
be reported on Form 1099-MISC, box 7 (plus Form W-2, box 5
if also compensated as an officer or employee); and
• For institutional trustees, fees for services paid pursuant to
a contractual agreement or statutory entitlement. While the
compensation of institutional trustees must be reported on Form
990, Part VII, it need not be reported on Schedule J (Form 990).
If the organization did not file a Form 1099-MISC because
the amounts paid were below the threshold reporting
requirement, then include and report the amount actually paid.
Corporate officers are considered employees for

TIP purposes of Form W-2 reporting, unless they perform no
services as officers, or perform only minor services and
neither receive nor are entitled to receive, directly or indirectly,
any compensation. Corporate directors are considered
independent contractors, not employees, and director
compensation, if any, generally is required to be reported on
Form 1099-MISC. See Regulations section 31.3401(c)-1(f).
For certain kinds of employees and for retirees, box 5 of
Form W-2 can be zero or blank. For instance, recipients of
disability pay, certain members of the clergy, and religious
workers who are not subject to social security and Medicare
taxes as employees can receive compensation that is not
reported in box 5. In such case, the amount required to be
reported on Form W-2, box 1 must be reported as reportable
compensation.
If an officer, director, trustee, key employee, or highest
compensated employee of the organization is a foreign person
who received U.S. source income during the calendar year
ending with or within the organization’s tax year from the filing
organization or a related organization, and if such income was
reported on Form 1042-S, box 2, then treat this income as
reportable compensation and report it in Part VII, Section A,
column (D) or (E). For foreign persons for whom compensation
reporting on Form W-2, Form 1099-MISC, or Form 1042-S is
not required, treat as reportable compensation in column (D) or
(E) the total value of the compensation paid in the form of cash
or property during the calendar year ending with or within the
organization’s tax year. Report other compensation from foreign
organizations as “other compensation” in column (F).
To determine whether an individual received more than
$100,000 (or $150,000) in reportable compensation in the
aggregate from the organization and related organizations,
add the following amounts.
• The amount reported on Form W-2, box 5 or Form
1099-MISC, box 7, issued to the individual by the organization.
• Amounts reported on Form W-2, box 5 or Form 1099-MISC,
box 7, issued to the individual by each related organization that
reported $10,000 or more.
To determine whether an individual received solely in his or
her capacity as a former trustee or director of the organization
more than $10,000 in reportable compensation for the calendar
year ending with or within the organization’s tax year, in the
aggregate, from the organization and all related organizations
(and thus must be reported on Form 990, Part VII and Schedule
J (Form 990), Part II), add the amounts reported on all Forms
1099-MISC, box 7, and, if relevant, all Forms W-2, box 5,
issued to the individual by the organization and all related
organizations for the calendar year ending with or within the
organization’s tax year. Report such amounts only to the extent
that such amounts relate to the individual’s past services as a
trustee or director of the organization, and do not disregard any
payments from a related organization if below $10,000, for such
purpose.
Other compensation. Other compensation includes
compensation other than reportable compensation, including
deferred compensation not currently reportable on Form W-2,
box 5 or Form 1099-MISC, box 7, and certain nontaxable
benefits, as discussed in detail in the instructions for Schedule
J, (Form 990), Part II. See the instructions for other

All reportable compensation paid by the filing organization
must be reported. Reportable compensation paid by a related
organization is not required to be reported unless (1) it is
$10,000 or more for the calendar year ending with or within the
organization’s tax year (the “$10,000-per-related-organization
exception”), or (2) it is paid for past services to the filing
organization in the person’s capacity as a former director or
trustee.
A particular item of other compensation (such as described
in the compensation table beginning on page 27) paid or
accrued by the filing organization is not required to be reported
unless (1) it is $10,000 or more for the calendar year ending
with or within the organization’s tax year (the “$10,000-per-item
exception”) or (2) it is one of the five types of compensation
(generally constituting deferred compensation and health
benefits) that must be reported regardless of amount (see the
instructions for column (F)). The same principles apply with
respect to items of other compensation paid or accrued by a
related organization (applied separately to each related
organization).

!

The $10,000 exceptions do not apply to reporting
compensation on Schedule J (Form 990), Part II.

CAUTION

-23-

Page 24 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

compensation reported in column (F) on page 26, which
includes a table to show where and how to report certain types
of compensation in Part VII, Section A, and Schedule J (Form
990).
Disregarded entities. Disregarded entities (such as a limited
liability company that is wholly owned by the organization and
not treated as a separate entity for federal tax purposes) are
generally treated as part of the organization rather than as
related organizations for purposes of Form 990, including Part
VII and Schedule J (Form 990). A person is not considered an
officer or director of the organization by virtue of being an
officer or director of a disregarded entity, but he or she can
qualify as a key employee or highest compensated
employee of the organization. An officer, director, or employee
of a disregarded entity is a key employee of the organization if
he or she meets the $150,000 Test and Top 20 Test for the
filing organization as a whole, and if, with respect to the
Responsibility Test, the person has responsibilities, powers or
influence over a discrete segment or activity of the disregarded
entity that represents at least 10 percent of the activities,
assets, income, or expenses of the filing organization as a
whole, or has or shares authority to control or determine the
disregarded entity’s capital expenditures, operating budget, or
compensation for employees that constitutes at least 10 percent
of the filing organization’s respective items as a whole. If an
officer or director of a disregarded entity also serves as an
officer, director, trustee, or key employee of the organization,
report this individual as an officer, director, trustee, or key
employee, as applicable, of the organization, and add the
compensation, if any, paid by the disregarded entity to this
individual to the compensation, if any, paid directly by the
organization to this individual. Report the total aggregate
amount in Column (D).
Management companies. Management companies, as
independent contractors, are reported on Form 990, Part VII
(if at all) only in Section B. Independent Contractors, and are
not reported on Schedule J (Form 990), Part II. If a current or
former officer, director, trustee, or key employee has a
relationship with a management company that provides
services to the organization, then the relationship can be
reportable on Schedule L (Form 990 or 990-EZ), Part IV. A key
employee of a management company can be reported as a
current officer of the filing organization if he or she is the filing
organization’s top management official or top financial
official or is designated as an officer of the filing organization.
However, that person does not qualify as a key employee of the
filing organization solely on the basis of being a key employee
of the management company. If a current or former officer,
director, trustee, key employee, or highest compensated
employee receives compensation from a management
company that provides services to the organization and is a
related organization, then the individual’s compensation from
the management company must be reported on Form 990, Part
VII, Section A, columns (E) and (F). Questions pertaining to
management companies also appear on Form 990, Part VI, line
3 and Schedule H (Form 990), Part IV.
Leased employees. In some cases, instead of hiring a
management company, an exempt organization “leases” one or
more “employees” from another company, which may be in the
business of leasing employees. The compensation paid to the
leasing company should be treated like compensation to a
management company for purposes of Form 990 compensation
reporting.
The organization should report employees of an employee
leasing company or a management company as the
organization’s own employees if such persons are common law
employees of the filing organization under state law.
Compensation from unrelated organizations. If a current or
former officer, director, trustee, key employee, or highest
compensated employee received or accrued compensation or
payments from an unrelated organization (other than from
certain management companies or leasing companies, as
discussed above) in exchange for services rendered to the filing
organization in that person’s capacity as an officer, director,

trustee, or employee of the filing organization, then the filing
organization must report (subject to the taxable organization
employee exception on this page) such amounts as
compensation from the filing organization if it has knowledge
of the arrangement, regardless of whether the unrelated
organization treats the amounts as compensation, grants,
contributions, or otherwise.
Compensation from unrelated organizations (except for
compensation from certain management companies or
leasing companies, and compensation described in Taxable
organization employee exception on this page) must be treated
as reportable compensation in determining whether the dollar
thresholds are met for reporting (1) current or former employees
as current or former key employees or highest compensated
employees, or (2) former officers, director or trustees, on Form
990, Part VII, Section A. If the Form 990, Part VII thresholds for
reporting are met, then the compensation from the individual or
unrelated organization must be reported as compensation in
Part VII. The compensation may also need to be reported in
Form 990, Schedule J, Part II (see the instructions for Form
990, Part VII, Section A, line 5.)
Taxable organization employee exception. Do not report
as compensation any payments from an unrelated taxable
organization that employs the individual and continues to pay
the individual’s regular compensation while the individual
provides services without charge to the filing organization, but
only if the unrelated organization does not treat the payments
as a charitable contribution to the filing organization.
Column (A). For each person required to be listed, enter the
name in the top of each row and the person’s title or position
with the organization in the bottom of the row. If more than one
title or position, list all. List persons in the following order:
individual trustees or directors, institutional trustees,
officers, key employees, highest compensated employees,
and former such persons. Use Schedule J-2 (Form 990) if
space is needed for additional persons or titles.
Column (B). For each person listed in column (A), estimate
the average hours per week devoted to the organization during
the year. Entry of a specific number is required for a complete
answer. Enter “-0-” if applicable. Do not include statements
such as “as needed,” “as required,” or “40+”. If the average is
less than one hour per week, then the organization can enter a
decimal rounded to the nearest tenth (for example, 0.2 hours
per week). For each person listed in column (A), provide an
estimate of the average hours per week (if any) devoted to
related organizations on Schedule O (Form 990).
Column (C). For each person listed in column (A), check all
applicable boxes for positions with the organization. For a
former officer, director, trustee, key employee, or highest
compensated employee, check only the “Former” box and
indicate the former status in the person’s title.
“Current” officers, directors, trustees, key employees,
and highest compensated employees. A “current” officer,
director, or trustee is a person that was an officer, director, or
trustee at any time during the organization’s tax year. A
“current” key employee or highest compensated employee is a
person who was a key employee or highest compensated
employee for the calendar year ending with or within the
organization’s tax year.
If the organization files Form 990 based on a fiscal year,
use the fiscal year to determine the organization’s “current”
officers, directors, and trustees. Whether or not the organization
files Form 990 based on a fiscal year, use the calendar year
ending with or within the organization’s tax year to determine
the organization’s “current” key employees and five highest
compensated employees.
Do not check the “Former” box if the person was a current
officer, director or trustee at any time during the organization’s
tax year, or a current key employee or among the five highest
compensated employees for the calendar year ending with or
within the organization’s tax year. A current employee (other
than a current officer, director, trustee, key employee, or
highest compensated employee) can be reported on Form 990,
Part VII and Schedule J (Form 990), Part II: (1) as a former

-24-

Page 25 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

director or trustee because he or she formerly served as a
director or trustee and received more than $10,000 in
reportable compensation in the capacity as a former director
or trustee, or (2) a former officer or key employee (but not as a
former highest compensated employee) because he or she
qualified as an officer or key employee within the last five years
and received more than $100,000 of reportable compensation.
In such case indicate the individual’s former position in his or
her titles (for example, “former president”).
“Former” officers, directors, trustees, key employees,
and highest compensated employees. Check the “Former”
box with respect to former officers, directors, trustees, and key
employees only if both conditions below apply.
• The organization reported (or should have reported, applying
the instructions in effect for such years) an individual on any of
the organization’s Forms 990, 990-EZ or 990-PF, for any one or
more of the five prior years in one or more of the following
capacities: officer, director, trustee, or key employee.
• The individual received reportable compensation in the
calendar year ending with or within the organization’s current
tax year in excess of the threshold amount ($100,000 for
former officers and key employees, $10,000 for services in the
capacity as a director or trustee).

Example 2. T was reported as one of Y Charity’s five
highest compensated employees of over $50,000 on Y’s 2007
Form 990. For 2009, T is not a current officer, director, trustee,
key employee, or highest compensated employee of Y,
although T is still an employee of Y during the 2009 calendar
year ending with or within Y’s tax year. T receives reportable
compensation in excess of $100,000 from Y and related
organizations for such calendar year. T is not reportable as a
former highest compensated employee on Y’s 2009 Form 990,
Part VII, Section A, because T was an employee of Y during the
calendar year ending with or within Y’s tax year.
Example 3. Z was reported as one of Y Charity’s key
employees on Y’s 2007 Form 990. For 2009, Z is not a current
officer, director, trustee, key employee, or highest compensated
employee of Y. For 2009, Z receives reportable compensation
of $90,000 from Y as an employee (and no reportable
compensation from related organizations). Because Z receives
less than $100,000 reportable compensation in 2009 from Y
and its related organizations, Y is not required to report Z as a
former key employee on Y’s 2009 Form 990, Part VII, Section
A.
Columns (D) & (E). Enter the amounts required to be reported
(whether or not actually reported) on Form W-2, box 5 or Form
1099-MISC, box 7, issued to the person for the calendar year
ending with or within the organization’s tax year. Enter an
amount for each person in each of columns (D) and (E). Enter
“-0-” if the person received no reportable compensation. For
institutional trustees that do not receive a Form 1099-MISC,
enter the amount that the organization would have reported in
box 7 if a Form 1099-MISC had been required.
Reportable compensation paid to the person by a related
organization at any time during the entire calendar year ending
with or within the filing organization’s tax year should be
reported in column (E), even if the related organization was
related to the filing organization for only a portion of the tax
year.
Common paymaster or payroll/reporting agent. Treat
amounts paid by a common paymaster (as defined in
Regulations section 31.3121(s)-1(b)(2)) or a payroll or reporting
agent (reported on Form 2678 or 8655 to perform certain
employment tax services on behalf of the organization) for
services performed for the organization as if paid directly by the
organization. Similarly, treat amounts paid by a common
paymaster or a payroll or reporting agent for services performed
for a related organization as if paid directly by the related
organization.
$10,000-per-related-organization exception. For
purposes of column (E), the organization need not include
payments from a single related organization if less than
$10,000 for the calendar year ending with or within the
organization’s tax year, except to the extent paid to a former
director or former trustee of the filing organization for services
as a director or trustee of the organization. For example, if an
officer of the organization received compensation of $6,000,
$15,000, and $50,000 from three separate related organizations
for services provided to those organizations, the organization
needs to report only $65,000 in column (E) for the officer.
Volunteer exception. The organization need not report in
column (E) or (F) compensation from a related organization
paid to a volunteer officer, director, or trustee of the
organization if the related organization is a for-profit
organization, is not owned or controlled directly or indirectly by
the organization or one or more related tax-exempt
organizations, and does not provide management services for a
fee to the organization.
Bank or financial institution trustee exception. If the
organization is a trust with a bank or financial institution trustee
that is also trustee of another trust, it need not report in column
(E) or (F) compensation from the other trust for services
provided as the trustee to the other trust.
Reasonable effort. The organization is not required to
report compensation from a related organization to a person
listed on Form 990, Part VII, Section A, if the organization is
unable to secure the information on compensation paid by the

If a person was reported (or should have been reported) as an
officer, director, trustee or key employee on any of the
organization’s prior five Forms 990, 990-EZ or 990-PF, and the
person was still employed at any time during the organization’s
tax year either (1) by the organization in a lesser capacity other
than as an officer, director, trustee, key employee, or highest
compensated employee; or (2) by a related organization in any
capacity, but not by the filing organization, check only the
“Former” box.
Whether or not the organization files Form 990 based on a
fiscal year, use the calendar year ending within the
organization’s tax year to determine all “former” officers,
directors, trustees, key employees, and five highest
compensated employees (because their status depends on
their reportable compensation, which is reported for the
calendar year).
Check the “Former” box with respect to former five highest
compensated employees only if all four conditions below apply.
1. The individual was not an employee of the organization
at any time during the calendar year ending with or within the
organization’s tax year.
2. The individual was reported (or should have been
reported, applying the instructions in effect for such years) on
any of the organization’s Forms 990, 990-EZ, or 990-PF for one
or more of the five prior years as one of the five highest
compensated employees.
3. The individual’s reportable compensation exceeded
$100,000 for the calendar year ending with or within the
organization’s tax year.
4. The amount of the individual’s reportable compensation
for such year would place him or her among the organization’s
current five highest compensated employees if the individual
were an employee during the calendar year ending with or
within the organization’s tax year.
Transition rule for non-section 501(c)(3) organizations.
Organizations other than section 501(c)(3) organizations do not
report any former highest compensated employees on Form
990.
Example 1. X was reported as one of Y Charity’s five
highest compensated employees of over $50,000 on Y’s 2007
Form 990. For 2009, X is not a current officer, director, trustee,
key employee, or highest compensated employee of Y. X is not
an employee of Y during the 2009 calendar year ending with or
within Y’s tax year. X receives reportable compensation in
excess of $100,000 from Y for past services and would be
among Y’s five highest compensated employees if X were a
current employee. Y must report X as a former highest
compensated employee on Y’s 2009 Form 990, Part VII,
Section A.

-25-

Page 26 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

related organization after making a reasonable effort to obtain
it. In such case, the organization shall report the efforts
undertaken on Schedule O (Form 990). An example of a
reasonable effort is for the organization to distribute a
questionnaire annually to each of its current and former officers,
directors, trustees, key employees, and highest compensated
employees that includes the name, title, date, and signature of
each person reporting information and containing the pertinent
instructions and definitions for Form 990, Part VII, Section A,
columns (E) and (F).
Column (F). Other compensation generally includes
compensation not currently reportable on Form W-2, box 5 or
Form 1099-MISC, box 7, including nontaxable benefits other
than disregarded benefits, as discussed in the instructions for
Schedule J, (Form 990), Part II. Treat amounts paid or accrued
under a deferred compensation plan, or held by a deferred
compensation trust, that is established, sponsored, or
maintained by the organization (or a related organization) as
paid, accrued, or held directly by the organization (or the related
organization). Enter an amount for each person. (Enter “-0-” if
applicable.) Report a reasonable estimate if actual numbers are
not readily available.
Other compensation paid to the person by a related
organization at any time during the calendar year ending with
or within the filing organization’s tax year should be reported in
column (F), even if the related organization was related to the
filing organization for only a portion of the tax year.
The following items of compensation provided by the filing
organization and related organizations must be reported as
“other compensation” in column (F) in all cases regardless of
the amount, to the extent they are not included in column (D).
1. Tax-deferred contributions by the employer to a qualified
defined contribution retirement plan.
2. The annual increase in actuarial value of a qualified
defined benefit plan, whether or not funded or vested.
3. The value of health benefits provided by the employer, or
paid by the employee with pre-tax dollars, that are not included
in reportable compensation. For this purpose, health benefits
include payments of health benefit plan premiums, medical
reimbursement and flexible spending programs, and the value
of health coverage (rather than actual benefits paid) provided
by an employer’s self-insured or self-funded arrangement.
Health benefits include dental, optical, drug, and medical
equipment benefits. They do not include disability or long-term
care insurance premiums or benefits for this purpose.
4. Tax-deferred contributions by the employer and
employee to a nonqualified defined contribution plan, whether
or not funded, vested, or subject to a substantial risk of
forfeiture.
5. The annual increase in actuarial value of a nonqualified
defined benefit plan, whether or not funded, vested, or subject
to a substantial risk of forfeiture.

The $10,000-per-item exception applies separately with
respect to each item of other compensation from the
organization and from each related organization.
Example.
Organization X provides the following compensation to its
current officer:
$110,000
5,000
5,000
4,000
500
8,000

Reportable compensation (including $5,000 pre-tax
employee contribution to qualified defined contribution
retirement plan
Tax-deferred employer contribution to qualified defined
contribution retirement plan
Nontaxable employer contribution to health benefit plan
Nontaxable dependent care assistance
Nontaxable group life insurance premium
Moving expense (nontaxable as qualified under section
132)

Organization Y, a related organization, also provides
compensation to the officer as follows:
$21,000 Reportable compensation (including $1,000 pre-tax
employee contribution to qualified defined contribution
retirement plan)
1,000 Tax-deferred employer contribution to qualified defined
contribution retirement plan
5,000 Nontaxable tuition assistance

The officer receives no compensation in the capacity as a
former director or trustee of X, and no unrelated organization
pays the officer for services provided to X. The organization can
disregard as other compensation the (a) $4,500 in dependent
care and group life insurance payments from the organization
(under the $10,000-per-item exception); (b) the $8,000 moving
expense from the organization (excluded under section 132) on
both Form 990, Part VII and Schedule J (Form 990), Part II; and
(c) the $5,000 in tuition assistance from the related organization
(under the $10,000-per-item exception) in determining whether
the officer’s total reportable and other compensation from the
organization and related organizations exceeds $150,000. In
this case, total reportable compensation is $131,000, and total
other compensation (excluding the excludible items below
$10,000) is $11,000. Under these circumstances, the officer’s
dependent care, group life, moving expenses, and tuition
assistance items need not be reported as other compensation
on Form 990, Part VII, Section A, column (F), and the officer’s
total reportable and other compensation ($142,000) is not
reportable on Schedule J (Form 990). If instead, the officer’s
reportable compensation from Y were $30,000 rather than
$21,000, then the officer’s total reportable and other
compensation ($151,000) would be reportable on Schedule J
(Form 990), including the dependent care, group life, and tuition
assistance items, even though these items would not have to
be reported as other compensation in Form 990, Part VII.
Compensation table for reporting in Part VII, Section A, or
Schedule J (Form 990), Part II. The following table may be
useful in determining how and where to report items of
compensation on Form 990, Part VII, Section A and on
Schedule J, (Form 990), Part II. The list is not comprehensive
but covers most items for most organizations. Many items of
compensation may or may not be taxable or currently taxable,
depending on the plan or arrangement adopted by the
organization and other circumstances. The list attempts to take
into account these varying facts and circumstances. The list is
merely a guideline to report amounts for those persons required
to be listed. In all cases, items included on Form W-2, box 5
and Form 1099-MISC, box 7 are required to be reported on Part
VII, Section A and, for applicable persons, Schedule J, (Form
990), Part II, column (B). Items listed as “taxable” or “taxable in
current year” are currently includible in reportable
compensation, but are not necessarily subject to federal income
tax in the current year.

$10,000-per-item exception. Except for the five items listed
above, neither the organization nor a related organization is
required to report on Form 990, Part VII, Section A any item of
“other compensation” (as set forth in the table beginning on
page 27) if its total value is less than $10,000 for the calendar
year ending with or within the organization’s tax year.
Amounts excluded under the two separate $10,000
exceptions (the $10,000-per-related-organization and
$10,000-per-item exceptions) are to be excluded from
compensation in determining whether an individual’s total
reportable compensation and other compensation exceeds
the thresholds set forth on Form 990, Part VII, Section A, line 4.
If the individual’s total compensation exceeds the relevant
threshold, then the amounts excluded under the $10,000
exceptions are included in the individual’s compensation
reported on Schedule J (Form 990). Thus, the total amount of
compensation reported on Schedule J (Form 990) can be
higher than the amount reported on Form 990, Part VII, Section
A.

-26-

Page 27 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Where to Report
Form 990, Part VII, Section A, column (D) or (E)
Type of Compensation

Form 990, Part VII, Section A,
column (F)

Schedule J (Form Schedule J (Form Schedule J (Form Schedule J (Form Schedule J
990), Part II,
990), Part II,
990), Part II,
990), Part II,
(Form 990), Part
column B(i)
column B(ii)
column B(iii)
column C
II, column D
Base salary/wages/fees paid

x

Base salary/wages/fees deferred (taxable)

x

Base salary/wages/fees deferred (nontaxable)

x

Bonus paid (including signing bonus)

x

Bonus deferred (taxable in current year)

x

Bonus deferred (not taxable in current year)

x

Incentive compensation paid

x

Incentive compensation deferred (taxable in
current year)

x

Incentive compensation deferred (not taxable in
current year)

x

Severance or change of control payments
made
Sick pay paid by employer

x
x

Third party sick pay

x

Other compensation amounts deferred (taxable
in current year)

x

Other compensation amounts deferred (not
taxable in current year)

x

Tax gross-ups paid

x

Vacation/sick leave cashed out

x

Stock options at time of grant

x

Stock options at time of exercise

x

Stock awards paid by taxable organizations
substantially vested

x

Stock awards paid by taxable organizations not
substantially vested

x

Stock equivalents paid by taxable organizations
substantially vested

x

Stock equivalents paid by taxable organizations
not substantially vested

x

Loans — forgone interest or debt forgiveness

x

Contributions (employer) to qualified retirement
plan

x

Contributions (employee deferrals) to section
401(k) plan

x

Contributions (employee deferrals) to section
403(b) plan

x

Qualified or nonqualified retirement plan
defined benefit accruals (reasonable estimate
of increase in actuarial value)

x

Qualified or nonqualified retirement (defined
contribution) plan investment earnings (no
reportable or other compensation)
Taxable distributions from qualified retirement
plan (reported on Form 1099-R but not
reportable or other compensation on Form 990)

-27-

Page 28 of 79
2-FEB-2010

9:01 -

Instructions for Form 990 Return of Organization Exempt From Income Tax

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

Where to Report
Form 990, Part VII, Section A, column (D) or (E)
Type of Compensation

Form 990, Part VII, Section A,
column (F)

Schedule J (Form Schedule J (Form Schedule J (Form Schedule J (Form
Schedule J
990), Part II,
990), Part II,
990), Part II,
990), Part II,
(Form 990), Part
column B(i)
column B(ii)
column B(iii)
column C
II, column D
Distributions from nongovernmental section
457(b) plan (no reportable or other
compensation on Form 990)
Amounts includible in income under section
457(f)

x

Amounts deferred (plus earnings) under
section 457(b) plan (substantially vested)

x

Amounts deferred under section 457(b) plan
(not substantially vested)

x

Contributions to nonqualified plans
(substantially vested)

x

Contributions to nonqualified plans (not
substantially vested)

x

Increase in earnings of nonqualified plan

x

Scholarships and fellowship grants (taxable)

x

Health benefit plan premiums (taxable)

x

Health benefit plan premiums (nontaxable)

x

Medical reimbursement and flexible spending
programs (taxable)

x

Medical reimbursement and flexible spending
programs (nontaxable)

x

Other health benefits (taxable)

x

Other health benefits (nontaxable)

x

Life, disability, or long-term-care insurance
(taxable)

x

Life, disability, or long-term-care insurance
(nontaxable)

*

Split-dollar life insurance (see Notice 2002-8,
2002-1 C.B. 398)

x

Housing provided by employer (taxable)

x

Housing provided by employer (nontaxable)

*

Personal legal services (taxable)

x

Personal legal services (nontaxable)

*

Personal financial services (taxable)

x

Personal financial services (nontaxable)

*

Dependent care assistance (taxable)

x

Dependent care assistance (nontaxable)

*

Adoption assistance (taxable)

x

Adoption assistance (nontaxable)

*

Tuition assistance for family (taxable)

x

Tuition assistance for family (nontaxable)

*

Cafeteria plans (nontaxable health benefit)

x

Cafeteria plans (nontaxable benefit other than
health)

*

Liability insurance (taxable)

x

Employer-provided automobile (taxable)

x

Employer-subsidized parking (taxable)

x

Travel (taxable)

x

-28-

Page 29 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Where to Report
Form 990, Part VII, Section A, column (D) or (E)
Type of Compensation

Form 990, Part VII, Section A,
column (F)

Schedule J (Form Schedule J (Form Schedule J (Form Schedule J (Form
Schedule J
990), Part II,
990), Part II,
990), Part II,
990), Part II,
(Form 990), Part
column B(i)
column B(ii)
column B(iii)
column C
II, column D
Moving (taxable)

x

Meals and entertainment (taxable)

x

Social club dues (taxable)

x

Spending account (taxable)

x

Note. Items marked with asterisk “*” instead of an “x” are
excludible from Form 990, Part VII, Section A, column (F), if
below $10,000.
Line 3. Complete Schedule J (Form 990) for each of the
following persons.
• Each individual listed in Part VII, Section A, as a former
officer, former key employee, or a former highest
compensated employee. To determine whether an individual
received more than $100,000 in reportable compensation in
the aggregate from the organization and related
organizations, add the amounts reported on all Forms W-2,
box 5 and Forms 1099-MISC, box 7 issued to the individual by
the organization and all related organizations (disregarding
amounts from a related organization if below $10,000) for the
calendar year ending with or within the organization’s tax year.
• Each individual that received, solely in the capacity as a
former director or former trustee of the organization, more
than $10,000 of reportable compensation (Part VII, Section A,
columns (D) and (E)) during the year from the organization or
related organizations. To determine whether an individual
received or accrued more than $10,000 in reportable
compensation solely in the capacity as a former trustee or

director of the organization, add the amounts reported on all
Forms 1099-MISC, box 7 and, if applicable, Forms W-2, box 5,
issued to the individual by the organization and all related
organizations, to the extent that such amounts relate to the
individual’s past services as a trustee or director of the
organization and not of a related organization. The
$10,000-per-related-organization exception does not apply for
this purpose.
Line 4. Complete Schedule J (Form 990) for each individual
listed in Section A who received or accrued more than
$150,000 of reportable and other compensation from the
organization and related organizations. To determine whether
any listed individual received or accrued more than $150,000 of
reportable and other compensation, add all compensation
included in Part VII, Section A, columns (D), (E), and (F).
The following chart explains which officers, directors,
trustees, key employees, and highest compensated
employees must be reported on Form 990, Part VII, Section A,
and on Schedule J (Form 990), as well. See also line 5 for
additional individuals who must be reported on Schedule J,
(Form 990), Part II.

-29-

Page 30 of 79
2-FEB-2010

9:01 -

Instructions for Form 990 Return of Organization Exempt From Income Tax

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

Matrix for Part VII, Section A, Lines 3 and 4
Position

Current or former

Current
Directors and Trustees
Former

Enter on Schedule J (Form 990),
Part II . . .

All

If reportable and other
compensation > $150,000 in the
aggregate from organization and
related organizations (do not report
institutional trustees)

If reportable compensation in
capacity as former director or
If listed on Form 990, Part VII,
trustee > $10,000 in the aggregate Section A (do not report institutional
from organization and related
trustees)
organizations

Current

All

If reportable and other
compensation > $150,000 in the
aggregate from organization and
related organizations

Former

If reportable compensation >
$100,000 in the aggregate from
organization and related
organizations

If listed on Form 990, Part VII,
Section A

Current

All

All

Former

If reportable compensation >
$100,000 in the aggregate from
organization and related
organizations

If listed on Form 990, Part VII,
Section A

Current

If reportable compensation >
$100,000 in the aggregate from
organization and related
organizations

If reportable and other
compensation > $150,000 in the
aggregate from organization and
related organizations

Former

If reportable compensation >
$100,000 in the aggregate from
organization and related
organizations

If listed on Form 990, Part VII,
Section A

Officers

Key employees

Enter on Form 990, Part VII,
Section A . . .

Other Five Highest Compensated
Employees

Line 5. Complete Schedule J (Form 990) for any individual
listed on Form 990, Part VII, Section A if the person receives or
accrues compensation from an unrelated organization for
services rendered to the filing organization in the person’s
capacity as an officer, director, trustee, or employee of the
filing organization. Also, specify on Schedule J (Form 990), Part
III, the name of the unrelated organization, the type and amount
of compensation it paid or accrued, and the person receiving or
accruing such compensation. See Compensation from
unrelated organizations on page 24.

Section A. However, the amounts paid by B to A require that
the organization answer “Yes” on line 5 and complete Schedule
J (Form 990) with respect to A.
Example 2. C is an attorney employed by a law firm that is
not a related organization with respect to the organization. The
organization and the law firm enter into an arrangement where
C serves the organization, a section 501(c)(3) legal aid society
pro bono, on a full-time basis as its vice-president and as a
board member while continuing to receive her regular
compensation from the law firm. The organization does not
provide any compensation to C for the services provided by C
to the organization, and does not report C’s compensation on
Form W-2 or Form 1099-MISC. The law firm does not treat any
part of C’s compensation as a charitable contribution to the
legal aid society. Under these circumstances, the amounts paid
by the law firm to C do not require that the organization answer
“Yes” on line 5, with respect to C. Also, nothing in these facts
would prevent C from qualifying as an independent member of
the organization’s governing body for purposes of Form 990,
Part VI, line 1b.

For purposes of line 5, disregard:
1. Payments from a deferred compensation trust or plan
established, sponsored, or maintained by the organization (or a
related organization), and deferred compensation held by such
trust or plan;
2. Payments from a common paymaster for services
provided to the organization (or to a related organization); or
3. Payments from an unrelated taxable organization that
employs the individual and continues to pay the individual’s
regular compensation while the individual provides services
without charge to the filing organization, but only if the unrelated
organization does not treat the payments as a charitable
contribution to the filing organization.

Example 3. D, a volunteer director of the organization, is
also the sole owner and CEO of M management company (an
unrelated organization), which provides management services
to the organization. The organization pays M an annual fee of
$150,000 for management services. Under the circumstances,
the amounts paid by M to D (in the capacity as owner and CEO
of M) do not require that the organization answer “Yes” on line
5, with respect to D. However, the organization must report the
transaction with M, including the relationship between D and M,
on Schedule L (Form 990 or 990-EZ), Part IV. Also, D does not
qualify as an independent member of the organization’s
governing body because D receives indirect financial benefits
from the organization through M that are reportable on
Schedule L (Form 990 or 990-EZ), Part IV.

Example 1. A is the CEO (and the top management
official) of the organization. In addition to compensation paid
by the organization to A, A receives payments from B, an
unrelated corporation (using the definition of relatedness on
Schedule R (Form 990)), for services provided by A to the
organization. B also makes rent payments for A’s personal
residence. The organization is aware of the compensation
arrangement between A and B, and does not treat the
payments as paid by the organization for Form W-2 reporting
purposes. A, as the top management official of the organization,
must be listed as an officer of the organization in Part VII,

-30-

Page 31 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

similar amounts from the general public, governmental units,
foundations, and other exempt organizations. The general
public includes individuals, corporations, trusts, estates, and
other entities. Voluntary contributions are 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. Contributions are reported on line 1 regardless of
whether they are deductible by the contributor. The noncash
portion of contributions reported on lines 1a through 1f is also
reported on line 1g.
Report gross amounts of contributions collected in the
organization’s name by fundraisers.
Report all expenses of raising contributions in Part IX,
column (D), Fundraising Expenses. The organization must
enter on Part IX, line 11e fees for professional fundraising
services relating to the gross amounts of contributions
collected in the organization’s name by professional
fundraisers.
Report the value of noncash contributions at the time of
the donation. For example, report the fair market value of a
donated car at the time the car was received as a donation.
Reporting on line 1 in accordance with SFAS 116 is
acceptable for Form 990 purposes, but not required by IRS. 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 be reported on line 1 in future years.
Contributions do not include:
• Grants, fees or other support from governmental units,
foundations or other exempt organizations that represent a
payment for a service, facility, or product that primarily gives
some economic or physical benefit to the payer.
• The portion of any fundraising solicitation representing
payment for goods, services, or anything else at retail value.
• Donations of services or of use of materials, equipment, or
facilities.
• Unreimbursed expenses of officers, employees, or
volunteers. (See the explanations of charitable contributions
and employee business expenses in Pub. 526 and Pub. 463,
respectively.)
• Payments received from employers for welfare benefits under
plans described in sections 501(c)(9), (17), and (18). Report
these amounts on line 2, Program Service Revenue.
Line 1a. Enter on line 1a the total amount of contributions
received indirectly from the public through solicitation
campaigns conducted by federated fundraising agencies and
similar fundraising organizations (such as from a United Way
organization). Federated fundraising agencies 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.

Section B. Five Highest Compensated
Independent Contractors
Complete this table for the five highest compensated
independent contractors that received more than $100,000 in
compensation for services, whether professional or other
services, from the organization. Independent contractors
include organizations as well as individuals and can include
professional fundraisers, law firms, accounting firms, publishing
companies, management companies, and investment
management companies. Do not report public utilities as
independent contractors. See Pub. 1779, Independent
Contractor or Employee, and Pub. 15-A, Employer’s
Supplemental Tax Guide, for distinguishing employees from
independent contractors.
Column (C). Enter the amount the organization paid, whether
reported on Form 1099-MISC, box 7 or paid pursuant to the
parties’ agreement or applicable state law, for the calendar year
ending with or within the organization’s tax year.
Compensation includes fees and similar payments to
independent contractors but not reimbursement of expenses.
However, for this purpose, the organization must report gross
payments to the independent contractor that include
expenses and fees if the expenses are not separately reported
to the organization.
Form 1099-MISC is not always required to be issued for

TIP payments to an independent contractor.

Part VIII. Statement of Revenue
Column (A).
All organizations must complete column (A), reporting their
gross receipts for all sources of revenue. All organizations
(except section 527 political organizations) must complete
columns (B) through (D). Refer to specific instructions in this
part for completing each column.
If the organization enters an amount in column (A) for

TIP lines 2a through 2e or lines 11a through 11c, it must
also enter a corresponding business activity code from
Appendix J, Business Activity Codes. If none of the listed
codes, or other 6-digit codes listed on the NAICS website at
http://www.census.gov/eos/www/naics/, accurately describe the
activity, enter “900099.” Use of these codes does not imply that
the business activity is unrelated to the organization’s exempt
purpose.
Column (B).
In column (B), report all revenue from activities substantially
related to the organization’s exempt purposes. Use of revenue
for the organization’s exempt purposes does not make the
activity that produced the income (e.g., fundraising activity)
substantially related to the organization’s exempt purposes.
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.
Column (C).
In column (C), report any unrelated business revenue
received by the organization during the tax year from an
unrelated trade or business. See Pub. 598 and Instructions
for Form 990-T for more information.
Column (D).
In column (D), report any revenue excludable from unrelated
business income by section 512, 513, or 514. Examples of
such revenue include receipts from the sale of donated
merchandise, interest (unless debt-financed), and receipts from
bingo games.

Federated fundraising agencies must, like all other filers,

TIP identify the sources of contributions made to them on
lines 1a through 1g.
Line 1b. 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.
Example. M is an organization whose primary purpose is to
support the local symphony orchestra. Members have the
privilege of purchasing subscriptions to the symphony’s annual
concert series before they go on sale to the general public, but
must pay the same price as any other member of the public.
They also are entitled to attend a number of rehearsals each
season without charge. Under these circumstances, M’s
receipts from members are contributions reported on line 1b.
Membership dues that are not contributions because they
compare reasonably with available benefits are reported on line
2, Program service revenue.
Membership dues can consist of both contributions and
payment for goods and services. In that case, the portion of the
membership dues that is a payment for goods or services

Line 1. In General
On lines 1a through 1f, report cash and noncash amounts
received as voluntary contributions, gifts, grants or other

-31-

Page 32 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

should be reported on line 2, Program service revenue. The
portion that exceeds the fair market value of the goods or
services provided should be reported on line 1b.
See Pub. 1771, Charitable Contributions — Substantiation
and Disclosure Requirements.
Line 1c. Enter the total amount of contributions received
from fundraising events, which includes, but is not limited to,
gaming events, dinners, auctions, and other events conducted
for the sole or primary purpose of raising funds for the
organization’s exempt activities
Example. An organization holds a dinner, charging $400
per person for the meal. The dinner has a retail value of $160.
A person who purchases a ticket is really purchasing the dinner
for $160 and making a contribution of $240. The contribution of
$240, which is the difference between the buyer’s payment and
the retail value of the dinner, would be reported on line 1c and
again on line 8a (within the parentheses). The revenue received
($160 retail value of the dinner) would be reported in the
right-hand column on line 8a.
If a contributor gives more than $400, that person would be
making a larger contribution, the difference between the
dinner’s retail value of $160 and the amount actually given.
Rev. Rul. 67-246, 1967-2 C.B. 104, explains this principle in
detail. See also the instructions for lines 8a through 8c and Pub.
526.

of commissions, to the charity. The value of the stock at the
time of the contribution must be reported on line 1f and also on
line 1g. The sale of the stock, and the related sales expenses
(including the amount reported on lines 1f and 1g), must be
reported on lines 7a through 7d.
Museums and other organizations that elect not to

TIP capitalize their collections (in accordance with SFAS
116) should not report an amount on line 1g for works
of art and other collection items donated to them.
For more information on noncash contributions see the
Instructions for Schedule M (Form 990).
Line 1h. Enter on line 1h the total of lines 1a through 1f (but
not line 1g).
The organization may also need to attach Schedule B

TIP (Form 990, 990-EZ, or 990-PF). See the instructions for
Schedule B (Form 990, 990-EZ, or 990-PF) for more
information.
Line 2. On lines 2a through 2e, enter the organization’s five
largest sources of program service revenue. Program services
are primarily those that form the basis of an organization’s
exemption from tax. For a more detailed description of program
service revenue, refer to the instructions for Part IX, column (B).
On line 2f, enter the total received from all other sources of
program service revenue not listed individually on lines 2a
through 2e. On line 2g, enter the total of column (A), lines 2a
through 2f.
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. 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. 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 fundraising events or
fundraising activities) that generate fees for services can 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 or organizations that file Form 990. Accordingly,
hospitals, colleges, and universities can report, as program
service revenue on line 2, sales of inventory items otherwise
reportable on line 10a. In that event, enter the applicable cost of
goods sold as program service expense in column (B) of Part
IX. No other organizations should report sales of inventory
items on line 2.
Common Types of Program Service Revenue:
• Medicare/Medicaid payments, and other payments for
medical services.

Organizations that report more than $15,000 total on lines 1c
and 8a must also answer “Yes” to Part IV, line 18 and complete
Part II of Schedule G (Form 990 or 990-EZ).
Line 1d. Enter on line 1d amounts contributed to the
organization by related organizations. Do not report amounts
reportable on line 1a.
Line 1e. Enter the total amount of contributions in the form of
grants or similar payments from local, state, or federal
government sources, as well as foreign governments. Include
grant amounts from U.S. possessions.
A grant or other payment from a governmental unit is
reported here if its primary purpose is to enable the
organization 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 governmental unit. In other words, the
payment is recorded on line 1e if the general public receives the
primary and direct benefit from the payment and any benefit to
the governmental unit is indirect and insubstantial as compared
to the public benefit.
The following are examples of governmental grants and
other payments that are treated as contributions and reported
on line 1e.
• Payments by a governmental unit for the construction or
maintenance of library or museum facilities open to the public.
• Payments by a governmental unit to nursing homes to
provide health care to their residents.
• Payments by a governmental unit to child placement or child
guidance organizations under government programs to better
serve children in the community.
Line 1f. Enter all other contributions, gifts, and similar
amounts the organization received from sources not reported
separately on lines 1a through 1e. This amount includes
contributions from donor advised funds (unless the
sponsoring organization is a related organization).
Line 1g. Enter on line 1g the value of noncash contributions
included on lines 1a through 1f. If this amount exceeds
$25,000, the organization must answer “Yes” to Part IV, line 29
and complete and attach Schedule M (Form 990).
Noncash contributions are anything other than cash, checks,
money orders, credit card charges, wire transfers, and other
transfers and deposits to a cash account of the organization.
Value noncash donated items, like cars and securities, as of
the time of their receipt, even if sold immediately after they were
received.
Example. A charity receives a gift of stock from an
unrelated donor. The stock is delivered to the charity’s broker,
who sells it on the same day and remits the sales proceeds, net

-32-

Page 33 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

• Fees and contracts from government agencies for a service,

Line 6a. Enter on line 6a the rental income received for the
year from investment property. Allocate revenue to real property
and personal property in the spaces provided. Do not include
on line 6a rental income related to the filing organization’s
exempt function (program service). Report such income on line
2. For example, an exempt organization whose 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.
Only for purposes of completing this return, the filing
organization must report any rental income received from an
affiliated exempt organization as program service revenue on
line 2.
Rental revenue can be from an activity that is related or
unrelated to the organization’s exempt purpose. In general,
rents from real property are excluded in computing unrelated
business income, while rental income from personal property
is included. There are special rules when rents are received
from personal property leased with real property (a mixed
lease). In general, rental revenue from real property is excluded
from unrelated business revenue when:
• The determination of the amount of such rents is not based
on income or net profits derived by any person from the
property leased other than an amount based on a fixed
percentage of the gross receipts or sales,
• The lease does not include personal services other than
customary ones such as trash removal and cleaning of public
areas,
• Any portion attributable to personal property is 10% or less of
the total rent, and
• The real property is not debt-financed within the meaning of
section 512, 513, or 514. (Rent from debt-financed real property
is generally includible in unrelated business income, but there
can be exceptions based on use of the property. See Pub. 598.)
Rent received from leased personal property is generally
taxable except when leased with real property, and the rent
attributable to the personal property does not exceed 10% of
the total rents from all leased property.
Line 6b. Enter on Line 6b 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. If the organization reported on line 2 any
rental income reportable as program service revenue, report
any rental expense allocable to such activity on the applicable
lines of Part IX, column (B).
Line 6c. Subtract line 6b from line 6a for both columns (i) and
(ii) and enter on line 6c. Show any loss in parentheses.
Line 6d. Add line 6c, columns (i) and (ii) and enter on line 6d.
Show any loss in parentheses.
Lines 7a through 7d. Enter on lines 7a through 7c 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 non-inventory
assets (such as program-related investments and fixed assets
used by the organization in its related and unrelated activities).
On line 7a, 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
7b. On line 7c, enter the net gain or loss. Show any loss in
parentheses.
On lines 7a and 7c, also report capital gains dividends, the
organization’s share of capital gains and losses from a
partnership, and capital gains distributions from trusts.
Combine the gain or loss figures reported on line 7c,
columns (i) and (ii) and report that total on line 7d. Show any
loss in parentheses. Do not include any unrealized gains or
losses on securities carried at market value in the books of
account.
For reporting sales of securities on Form 990, the
organization can 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.

facility, or product that primarily benefited the government
agencies.
Example 1. A payment by a governmental agency to a
medical clinic to provide vaccinations to the general public is a
contribution reported on line 1e. A payment by a governmental
agency to a medical clinic to provide vaccinations to employees
of the agency is program service revenue reported on line 2.
Example 2. A payment by a governmental agency to an
organization to provide job training and placement for disabled
individuals is a contribution reported on line 1e. A payment by a
governmental agency to the same organization to operate the
agency’s internal mail delivery system is program service
revenue reported on line 2.
• Income from program-related investments. Report interest,
dividends, and other revenues from those investments made
primarily to accomplish the organization’s exempt purposes
rather than to produce income. Examples of program-related
investments include student loans and notes receivable from
other exempt organizations that borrowed the funds to pursue
the filing organization’s exempt function.
• Membership dues and assessments received that compare
reasonably with the membership benefits provided by the
organization. Organizations described in section 501(c)(5), (6),
or (7) generally provide benefits that have a reasonable
relationship with dues.
Examples of membership benefits include:
• Subscriptions to publications,
• Newsletters (other than one only about the organization’s
activities),
• Free or reduced-rate admissions to events sponsored by the
organization,
• Use of the organization’s facilities, and
• Discounts on articles or services that members and
nonmembers can buy
For each amount entered on lines 2a through 2e, the
organization must also enter a corresponding business
CAUTION activity code from Appendix J, Business Activity Codes.
Select the most specific 6-digit code available that describes
the activity producing the income. Note that most codes
describe more than one type of activity. Avoid using codes that
describe the organization rather than the income-producing
activity. For example, a credit union reporting income from
consumer lending activities should use code 522291. Sales
revenue from a museum gift shop should be reported with code
453220. An organization operating a thrift store should use
code 453310 to report sales revenue. An organization providing
credit counseling services should use code 541990. If none of
the listed codes accurately describe the activity, enter “900099.”
Use of these codes does not imply that the activity is unrelated
to the organization’s exempt purpose.
Line 3. Enter the amount of interest income from savings and
temporary cash investments, dividend and interest income from
equity and debt securities (stocks and bonds), amounts
received from payments on securities loans, as defined in
section 512(a)(5), as well as interest from notes and loans
receivable. Do not include unrealized gains and losses on
investments carried at market value.
Line 4. Enter all investment income actually or constructively
received from investing the proceeds of a tax-exempt bond
issue, which are under the control of the organization. For this
purpose, do not include any investment income received from
investing proceeds which are technically under the control of
the governmental issuer. For example, proceeds deposited
into a defeasance escrow which is irrevocably pledged to pay
the principal and interest (debt service) on a bond issue is not
under the control of the organization.
Line 5. Enter on line 5 royalties received by the organization
from licensing the ongoing use of its property to others.
Typically, royalties are received for the use of intellectual
property, such as patents and trademarks. Royalties also
include payments to the owner of property for the right to exploit
natural resources on the property, such as oil, natural gas, or
minerals.

!

-33-

Page 34 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

However, for reporting sales of securities on Form 990-T, do
not use the average cost basis to determine gain or loss.
The organization should maintain books and records to
substantiate information regarding any securities or other
assets sold for which market quotations were not published or
were not otherwise readily available. The recorded information
should include:
• A description of the asset,
• Date acquired,
• Whether acquired by donation or purchase,
• Date sold and to whom sold,
• Gross sales price,
• Cost, other basis, or, if donated, value at time acquired,
• Expense of sale and cost of improvements made after
acquisition, and
• Depreciation since acquisition, if depreciable property.
Line 8a. Enter in the line 8a box the gross income from
fundraising events, not including the amount of contributions
from fundraising events reported on line 1c. Report the line 1c
amount in the line 8a parenthetical. If the sum of the amounts
reported on line 1c and the line 8a box exceeds $15,000, then
the organization must answer “Yes” to Part IV, line 18 and
complete Schedule G (Form 990 or 990-EZ), Part II. If gaming
is conducted at a fundraising event, the income and expenses
must be allocated between the gaming and the fundraising
event in Form 990, Part VIII.
Compute the organization’s gross income from fees, ticket
sales or other revenue from fundraising events.
Fundraising events include:
• Dinners/dances,
• Door-to-door sales of
merchandise,
• Concerts,

food and beverages served would be one of the items reported
on line 8b. Indirect fundraising expenses, such as certain
advertising expenses associated with raising these
contributions, must be reported on the appropriate lines in
Part IX, column (D) and not on line 8b.
Line 8c. Enter on line 8c the difference between lines 8a and
8b. Show any loss in parentheses. The organization must report
net income from fundraising events as unrelated business
revenue (column (C)) or as revenue excluded from tax under
sections 512, 513, or 514 (column (D)).
Example. If an organization receives a donation of a
painting appraised at $5,000 at the time of donation, sells it for
$7,500 at an auction, and incurs $500 in costs related to selling
the painting at auction, it should report $5,000 on line 1f (and on
line 1g), the $7,500 gross proceeds from the auction on line 8a,
the $5,000 contribution value and $500 in auction costs on line
8b, and the net proceeds of $2,000 ($7,500 – $5,500) on line
8c. If the painting sold at auction for $2,500, the organization
would report a net loss of $3,000 ($2,500 – $5,500) on line 8c.
The organization would also need to report this contribution of
art on Schedule M, line 1 if it received over $25,000 in noncash
contributions during the filing year.
Line 9a. Organizations that report more than $15,000 on line
9a must also answer “Yes” to Part IV, line 19 and complete Part
III of Schedule G (Form 990 or 990-EZ).
Types of gaming include, but are not limited to:
- Bingo
- Pull tabs
- Instant bingo
- Raffles

Fundraising events do not
include:
• Sales or gifts of goods or
services of only nominal value,
• Raffles or lotteries in which
prizes have only nominal value,
and
• Solicitation campaigns that
generate only contributions.

- Scratch-offs
- Charitable gaming tickets
- Break-opens
- Hard cards
- Banded tickets
- Jar tickets
- Pickle cards

• Carnivals,
• Sports events, and
Proceeds from these activities are
considered contributions and
should be reported on line 1f.

- Nevada Club tickets
- Casino nights
- Las Vegas nights
- Coin-operated
gambling devices
including:
• Slot machines
• Electronic video
slot or line games
• Video poker
• Video blackjack
• Video keno
• Video bingo
• Video pull tab
games

• Auctions.

Many games of chance are taxable. Income from bingo
games is not generally subject to the tax on unrelated business
income if the games meet the legal definition of bingo. For a
game to meet the legal definition of bingo, wagers must be
placed, winners must be determined, and prizes or other
property must be distributed in the presence of all persons
placing wagers in that game.
A wagering game that does not meet the legal definition of
bingo does not qualify for the exclusion, regardless of its name.
For example, instant bingo, in which a player buys a
pre-packaged bingo card with pull-tabs that the player removes
to determine if he or she is a winner, does not qualify. See Pub.
598.
Line 9b. Enter on this line the expenses that relate directly to
the production of the revenue portion of the gaming activity.
Direct expenses of gaming include:
• Cash prizes,
• Noncash prizes,
• Compensation to bingo callers and workers,
• Rental of gaming equipment, and
• Cost of bingo supplies such as pull tabs, etc.
Line 9c. Enter the difference between 9a and 9b. Show any
loss in parentheses.
Line 10a. Enter the organization’s gross income from sales of
inventory items, less returns and allowances. Sales of inventory
items reportable on line 10a are sales of items that are donated
to the organization, that the organization makes to sell to
others, or that it buys for resale. Sales of inventory do not,
however, include the sale of goods related to a fundraising
event, which must be reported on line 8. Sales of investments

Fundraising events do not include events or activities that
substantially further the organization’s exempt purpose even if
they also raise funds. Revenue from such program service
activities are reported on line 2.
Example. An organization formed to promote and preserve
folk music and related cultural traditions holds an annual folk
music festival featuring concerts, handcraft demonstrations, and
similar activities. Because the festival directly furthers the
organization’s exempt purpose, income from ticket sales should
be reported on line 2 as program service revenue.
Fundraising events sometimes generate both contributions
and income, such as when an individual pays more than the
retail value for the goods or services furnished. Report in
parentheses the total amount from fundraising events that
represents contributions rather than payment for goods or
services. Treat the following as contributions.
• Amounts paid in excess of retail value of goods or service
furnished. See Example for line 1c.
• Amounts received from fundraising events when the
organization gives items of only nominal value to recipients.
Example. In return for a contribution of any amount, donors
receive a keychain with the organization’s logo. All amounts
received should be reported as contributions on line 1f and all
associated expenses on the appropriate lines in Part IX, column
(D). In such a case, no amounts would be reported on line 8.
Line 8b. Enter on this line both the cost or other basis of any
items sold at the events and the expenses that relate directly to
the production of the revenue portion of the fundraising activity.
In the line 1c dinner example referred to earlier, the cost of the

-34-

Page 35 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

on which the organization expected to profit by appreciation and
sale are not reported here. Report sales of investments on line
7.
The organization must report the sales revenue regardless
of whether the sales activity is an exempt function of the
organization or an unrelated trade or business.
Line 10b. Enter the cost of goods sold related to the sales of
inventory. The usual items included in cost of goods sold are
direct and indirect labor, materials and supplies consumed,
freight-in, and a portion of overhead expenses. Marketing and
distribution costs are not included in the cost of goods sold but
are reported in column (B), Program service expenses, of Part
IX.
Line 10c. Enter in the appropriate columns (A) through (D),
the net income or (loss) from the sale of inventory items. Show
any loss in parentheses.
Line 11. Enter all other types of revenue not reportable on
lines 1 through 10. Enter the three largest sources on lines 11a
through 11c and all other revenue on line 11d.

Program services can also include the organization’s
unrelated trade or business activities. Publishing a magazine
is a program service even though the magazine contains both
editorials and articles that further the organization’s exempt
purpose as well as advertising, the income from which is
taxable as unrelated business income.
Also include costs to secure a grant to conduct research,
produce an item, or perform a service, whether the activities
were conducted to meet the grantor’s specific needs or to
benefit the public directly. Do not report these costs as
fundraising expenses in column (D), even if the organization
reports the grant on Part VIII, line 1, as a contribution.
Column (C) — Management and General
Use Column (C) to report expenses that relate to the
organization’s overall operations and management, rather than
to fundraising activities or program services. Overall
management usually includes the salaries and expenses of the
organization’s chief executive officer and his or her staff, unless
a part of their time is spent directly supervising program
services or fundraising activities. In that case, their salaries and
expenses should be allocated among management,
fundraising, and program services.
Expenses incurred to manage investments must be reported
in column (C). Lobbying expenses should be reported in this
column if they do not directly relate to the organization’s exempt
purposes.
Organizations must also report the following in column (C):
costs of board of directors meetings; committee meetings, and
staff meetings (unless they involve specific program services or
fundraising activities); general legal services; accounting
(including patient accounting and billing); general liability
insurance; office management; auditing, human resources, and
other centralized services; preparation, publication, and
distribution of an annual report; and management of
investments.
However, report expenses related to the production of
program-related income in column (B) and expenses related to
the production of rental income in Part VIII, on line 6b. Rental
expenses incurred for the organization’s office space or
facilities are reported on line 16.
Do not use this column to report costs of special meetings or
other activities that relate to fundraising or specific program
services.

For each amount entered on lines 11a, 11b and 11c, the
organization must also enter a corresponding business
CAUTION activity code from Appendix J, Business Activity Codes.
Select the most specific 6-digit code available that describes
the activity producing the income. Note that most codes
describe more than one type of activity. Avoid using codes that
describe the organization rather than the income- producing
activity. If none of the listed codes accurately describe the
activity, enter “900099.” Use of these codes does not imply that
the activity is unrelated to the organization’s exempt purpose.
Line 12. For column (A), add lines 1h, 2g, 3 through 5, 6d, 7d,
8c, 9c, 10c, and 11e. For columns (B) through (D), add lines 2a
through 2f, 3, 4, 5, 6d, 7d, 8c, 9c, 10c, and 11a through 11d.
The amounts reported on line 12 in columns (B), (C), and (D),
plus the amount reported on line 1h, should equal line 12,
column (A).

!

Part IX. Statement of Functional
Expenses
Use the organization’s normal accounting method to complete
this section. If the organization’s accounting system does not
allocate expenses, the organization can use any reasonable
method of allocation. The organization must report amounts
accurately and document the method of allocation in its records.
Do not report in Part IX expenses that must be reported on lines
6b, 7b, 8b, 9b, or 10b in Part VIII.
Column (A) — Total
Section 501(c)(3) and 501(c)(4) organizations as well as section
4947(a)(1) nonexempt charitable trusts must complete columns
(A) through (D).
All other organizations must complete column (A) but can
complete columns (B), (C), and (D).

!

Column (D) — Fundraising
Fundraising expenses are the expenses incurred in soliciting
contributions, gifts, and grants. Report as fundraising
expenses all expenses, including allocable overhead costs,
incurred in: (a) publicizing and conducting fundraising
campaigns and (b) soliciting bequests and grants from
foundations or other organizations, or government grants
reported on Part VIII, line 1. This includes participating in
federated fundraising campaigns; preparing and distributing
fundraising manuals, instructions, and other materials; and
conducting fundraising events that generate contributions
reportable on Part VIII, line 1c, or revenue reported on Part VIII,
on line 8a.
Example. For an employee who works on fundraising 40
percent of the time and program management 60 percent of the
time, an organization must allocate that employee’s salary 40
percent to fundraising and 60 percent to program service
expenses. It cannot report the 100 percent of salary as program
expenses simply because the employee spent over 50 percent
of his time on program management.

State reporting requirements can be different from IRS
reporting requirements applicable to Part IX.

CAUTION

Column (B) — Program Services
Program services are mainly those activities that further the
organization’s exempt purposes. Fundraising expenses should
not be reported as program-service expenses even though one
of the organization’s purposes is to solicit contributions.
Include lobbying expenses in this column if the lobbying is
directly related to the organization’s exempt purposes.
Example. Foundation M, an organization exempt under
section 501(c)(3), has the exempt purpose of improving health
care for senior citizens. Foundation M operates in State N. The
legislature of State N is considering legislation to improve
funding of health care for senior citizens. Foundation M lobbies
state legislators in support of the legislation. Since this lobbying
is directly related to Foundation M’s exempt purpose, it would
be considered an exempt function expense, and would be
included under Column (B).

Allocating Indirect Expenses
Direct costs are expenses that can be identified specifically with
an organization’s activity or project, and can be assigned to an
activity or project with a high degree of accuracy. Indirect costs
are costs that cannot be identified specifically with an activity or
project. For example, a computer bought by a university
specifically for a research project is a direct cost. In contrast,

-35-

Page 36 of 79
2-FEB-2010

9:01 -

Instructions for Form 990 Return of Organization Exempt From Income Tax

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

the costs of software licensing for programs that run on all the
university’s computers are indirect costs.

salaries, interest, supplies, etc.). Using the reporting method
described above avoids this problem.

Colleges, universities, hospitals, and other organizations that
incur indirect expenses in various cost centers (such as
organizational memberships, books and subscriptions, and
regular telecommunications costs) can allocate and report such
expenses in the following manner:
1. Report the expenses of all indirect cost centers on
column (C), lines 5 through 24.
2. As a separate line item of line 24, enter “Allocation of
[name of indirect cost center] expenses.”
a. If any of the cost center’s expenses are allocated to
expenses listed in Part VIII such as the expenses attributable to
fundraising events and activities, enter such expenses as a
negative figure in columns (A) and (C).
b. Allocate expenses to column (B) or (D) as positive
amounts.
c. Add the amounts in columns (B) and (D) and enter the
sum as a negative offsetting amount in column (C). Do not
make any entries in column (A) for these offsetting entries.

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

!

Grants and Other Assistance to
Governments, Organizations and
Individuals
Organizations should report the amount of grants and other
assistance on lines 1 through 3. Report expenses incurred in
selecting recipients or monitoring compliance with the terms of
a grant or award on lines 5 through 24. See the following
instructions.
Note. Organizations can report this information in accordance
with Statement of Financial Accounting Standards (SFAS 116)
but are not required to do so. For example, an organization that
follows SFAS 116 and makes a grant during the tax year to be
paid in future years should report the grant’s present value on
this year’s Form 990 and report accruals of additional value
increments in future years.
Line 1. Enter the amount that the organization, at its own
discretion, paid in grants to governmental units and other
organizations in the United States. United Way and similar
federated fundraising organizations should report grants to
member or participating agencies on line 1. Organizations must
report voluntary grants to state or local affiliates for specific
(restricted) purposes or projects on line 1.
If line 1 exceeds $5,000, the organization must complete
Parts I and II of Schedule I (Form 990).
Line 2. Enter the amount paid by the organization to
individuals in the United States in the form of scholarships,
fellowships, stipends, research grants, and similar payments
and distributions.
Also include grants and other assistance paid to third party
providers for the benefit of specified individuals. For example, a
grant payment to a hospital to cover the medical expenses of a
particular patient must be reported on line 2. By comparison, a
grant to the same hospital to provide services to the general
public or to unspecified charity patients must be reported on line
1.
If line 2 exceeds $5,000, the organization must complete
Parts I and III of Schedule I (Form 990).
Line 3. The organization must enter the total amount of grants
and other assistance made to foreign governments, foreign
organizations, and foreign individuals outside the United
States, and to U.S. individuals for foreign activity.
If line 3 exceeds $5,000, the organization may have to
complete Parts II and/or Part III of Schedule F (Form 990). See
instructions for Schedule F for more information.
Line 4. Enter the payments made by the organization to
provide benefits to members (such as payments made by an
organization exempt under sections 501(c)(8), 501(c)(9), or
501(c)(17) to obtain insurance benefits for members). Do not
report on this line the cost of employment-related benefits such
as health insurance, life insurance, or disability insurance
provided by the organization to its officers and employees.
Report those expenses on lines 8 and 9.

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 5 through 24 of column (C)
would be $150,000 before the indirect cost center allocations
were made. Assume that of the $100,000 total expenses of the
cost center, $10,000 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 IX under this optional method:
1. Indicate the cost center, the expenses of which are being
allocated, on line 24, as “Allocation of [specify the indirect cost
center] expenses;”
2. Enter a decrease of $5,000 on the same line in the
column (A), Total expenses, representing the fundraising event
expenses that were already reported in Part VIII, on line 8b;
3. Enter $70,000 on the same line in column (B), Program
service expenses;
4. Enter $10,000 on the same line in column (D),
Fundraising expenses; and
5. Enter a decrease of $85,000 on the same line in column
(C), Management and general expenses, to represent the
allocations to functional areas other than management and
general.
After making these allocations, the column (C), line 25 total
functional expenses 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 IX. This reporting method
would actually be more useful to avoid multiple-step allocations
involving two or more cost centers. Without this optional
reporting method, the total expenses of the first cost center
would be allocated to the other functions, and might include an
allocation of part of these expenses to another cost center. The
expenses of the second cost center would then be allocated to
other functions and, perhaps, to other cost centers, and so on.
The greater the number of these cost centers that are allocated
out, the more difficult it is to preserve the object classification
identity of the expenses of each cost center (for example,

Allocating Indirect Expenses — Example
Line
5 – 24a
24b Allocation of $100,000 indirect cost center expenses
reported in (C)
25

(A)

(B)

$150,000

-

(5,000)
$145,000

-36-

70,000
$70,000

(C)
$150,000
(85,000)
$65,000

(D)
10,000
$10,000

Page 37 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Line 5. Enter the total compensation paid to current officers,
directors, trustees, and key employees for the organization’s
tax year. Compensation includes all forms of income and other
benefits earned or received in return for services rendered,
including pension plan contributions and other employee
benefits, but does not include non-compensatory expense
reimbursements or allowances. Report all compensation
amounts relating to such an individual, including those related
to services performed in a capacity other than as an officer,
director, trustee, or key employee.

Line 10. 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 on line 10 taxes withheld from employees’ salaries
and paid to various governmental units such as federal, state,
and local income taxes and the employees’ shares of Social
Security and Medicare taxes. Such withheld amounts are
reported as compensation.
Line 11. Fees for services paid to non-employees
(independent contractors). Enter on lines 11a through 11g
amounts for services provided by independent contractors for
management, legal, accounting, lobbying, professional
fundraising services, investment management, and other
services, respectively. Include amounts regardless of whether a
Form 1099 was issued to the independent contractor. Do not
include on line 11 amounts paid to or earned by employees,
officers, directors, trustees, or disqualified persons for these
types of services, which must be reported on lines 5 through 7.
Line 11a. Management fees. Enter the total fees charged for
management services provided by outside firms and
individuals.
Line 11b. Legal fees. Enter the total legal fees charged by
outside firms and individuals. Do not include any penalties,
fines, settlements or judgments imposed against the
organization as a result of legal proceedings. Report those
expenses on line 24. Report any amounts for lobbying services
provided by attorneys on line 11d.
Line 11c. Accounting fees. Enter the total accounting and
auditing fees charged by outside firms and individuals.
Line 11d. Lobbying fees. Enter amounts for activities
intended to influence foreign, national, state, or local legislation,
including direct lobbying and grassroots lobbying. Do not
include activities to influence actions by executive, judicial, or
administrative officials or bodies, or other advocacy services.
Report these amounts on line 11g.
Line 11e. Professional fundraising fees. Enter amounts paid
for professional fundraising services, including solicitation
campaigns and advice or other consulting services supporting
in-house fundraising campaigns. If the organization is able to
distinguish between fees paid for professional fundraising
services and amounts paid for fundraising expenses such as
printing, paper, envelopes, postage, mailing list rental, and
equipment rental, then fees paid for professional fundraising
services should be reported on line 11e and amounts paid for
fundraising expenses should be reported on line 24 as other
expenses. If the organization is unable to distinguish between
these amounts, it should report all such fees and amounts on
line 11e.
Line 11f. Investment management fees. Enter amounts for
investment counseling and portfolio management. Monthly
account service fees are considered portfolio management
expenses, and must be reported here. Do not include
transaction costs such as brokerage fees and commissions,
which are considered sales expenses and are included on Part
VIII, line 7b.
Line 11g. Other fees for services. Enter amounts for other
independent contractor services not listed on lines 11a
through 11f. For example, amounts paid to an independent
contractor for advocacy services that do not constitute lobbying
should be reported here. For health care organizations,
payments to health care professionals who are independent
contractors are reported on line 11g.
Line 12. Advertising expenses. Enter amounts paid for
advertising. Include amounts for print and electronic media
advertising. Also include Internet site link costs, signage costs,
and advertising costs for the organization’s in-house fundraising
campaigns. Do not include fees paid to independent
contractors for conducting professional fundraising services
or campaigns, which are reported on line 11e.
Line 13. Office expenses. Enter amounts for supplies (office,
classroom, medical, or other supplies); telephone (cell phones

Compensation for Part IX is reported based on the

TIP accounting method and reporting period used by the
organization, rather than the definitions and calendar
year used to complete Part VII or Schedule J (Form 990)
regarding compensation of certain officers, directors, trustees
and other employees.
Note. To the extent the following examples discuss allocation
of expenses in columns (B), (C), and (D), they apply only to
filers required to complete those columns.
Example 1. Key Employee A spent 90% of her time
administering a program that constitutes the basis of the
organization’s exempt purpose and 10% of her time in the
general management of the organization itself. Allocate 90% of
key employee A’s compensation to column (B), and 10% to
column (C).
Example 2. Director B is not paid as a member of the
board, but is employed and compensated by the organization
as a part-time fundraiser. Allocate 100% of Director B’s
compensation to column (D).
Example 3. Officer C receives $100,000 of salaries and
wages. In addition, the organization paid $25,000 of fringe
benefits, $10,000 of non-compensatory travel reimbursements,
and $7,500 of pension plan contributions relating to Officer C.
The organization reports $132,500 as compensation on line 5
and reports the $10,000 of expense reimbursements on line 17.
Line 6. Section 501(c)(3) and 501(c)(4) organizations must
report the total compensation and other distributions provided
to disqualified persons and persons described in section
4958(c)(3)(b) to the extent not included on line 5. See Appendix
G, Section 4958 Excess Benefit Transactions.
Compensation includes all forms of income and other
benefits earned or received in return for services rendered,
including pension plan contributions and other employee
benefits, but does not include non-compensatory expense
reimbursements or allowances.
Line 7. Enter the total amount of employee salaries, wages,
fees, bonuses, severance payments, and similar amounts not
reported on line 5 or 6.
Line 8. Enter the employer’s share of contributions to qualified
and nonqualified pension plans for the year. The organization
should include contributions made to sections 401(k) and
403(b) pension plans on behalf of employees. However, it
should not include contributions to qualified pension,
profit-sharing, and stock bonus plans under section 401(a)
solely for the benefit of current or former officers, directors,
trustees, or key employees that are reportable on line 5 or 6.
Complete Form 5500, Annual Return/Report of

TIP Employee Benefit Plan, for the organization’s plan and
file it as a separate return. If the organization has more
than one pension plan, complete a Form 5500 for each plan.
File the form by the last day of the 7th month after the plan year
ends.
Line 9. Other employee benefits. 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 8), and the cost of other
employee benefits.
For example, report expenses for employee events such as
a picnic or holiday party on line 9. Do not include contributions
on behalf of current or former officers, directors, trustees,
key employees or other persons that were included on line 5 or
6.

-37-

Page 38 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

and landlines) and facsimile; postage (overnight delivery, parcel
delivery, trucking, and other delivery expenses) and mailing
expenses; shipping materials; equipment rental; bank fees and
other similar costs. Also include printing costs of a general
nature. Printing costs that relate to conferences or conventions
must be reported on line 19.
Line 14. Information technology. Enter amounts for
information technology, including hardware, software, and
support services, such as maintenance, help desk, and other
technical support services. Also include expenses for
infrastructure support, such as web site design and operations,
virus protection and other information security programs and
services to keep the organization’s web site operational and
secured against unauthorized and unwarranted intrusions, and
other information technology contractor services. Report
payments to information technology employees on lines 5
through 10. Report depreciation/amortization related to
information technology on line 22.
Line 15. Royalties. Enter amounts for royalties, license fees
and similar amounts that allow the organization to use
intellectual property such as patents and copyrights.
Line 16. Occupancy. Enter amounts for the use of office
space or other facilities, including rent, heat, light, power, and
other utilities expenses; property insurance; real estate taxes;
mortgage interest; and similar occupancy-related expenses. Do
not include on line 16 expenses reported as office expenses
(such as telephone expenses), on line 13.
Do not net any rental income received from leasing or
subletting rented space against the amount reported on line 16
for occupancy expenses. If the tenant’s activities are related to
the organization’s exempt purpose, report rental income as
program-service revenue on Part VIII, line 2, and allocable
occupancy expenses on line 16. However, if the tenant’s
activities are not program-related, report the rental income on
Part VIII, line 6a, and related rental expenses on Part VIII, line
6b.
Do not include employee salaries or depreciation as
occupancy expenses. These expenses are reported on lines 5
through 7 and 22, respectively.
Line 17. Travel. Enter the total travel expenses, including
transportation costs (fares, mileage allowances, and automobile
expenses), meals and lodging, and per diem payments. Travel
costs include the expenses of purchasing, leasing, operating,
and repairing any vehicles owned by the organization and used
for the organization’s activities. However, if the organization
leases vehicles on behalf of its executives or other employees
as part of an executive or employee compensation program, the
leasing costs are considered employee compensation, and are
reported on lines 5 through 7.
Line 18. Payments of travel or entertainment expenses for
any federal, state or local public officials. Enter total
amounts for travel or entertainment expenses (including
reimbursement for such costs) for any federal, state or local
public officials (as determined under section 4946(c)) and their
family members (as determined under 4946(d)). Report
amounts for a particular public official only if aggregate
expenditures for the year relating to such official (including
family members of such official), exceed $1,000 for the year.
For expenditures that are not specifically identifiable to a
particular individual, the organization can use any reasonable
allocation method to estimate the cost of the expenditure to an
individual. Amounts not described above can be included in the
reported total amount for line 18 or can be reported on line 24.
The organization is responsible for keeping records of all travel
and entertainment expenses related to a government official
regardless of whether the expenses are reported on line 18 or
line 24.
Line 19. Conferences, Conventions, and Meetings. Enter
the total expenses incurred by the organization in conducting
meetings related to its activities. Include such expenses as
facility rentals, speakers’ fees and expenses, and printed
materials. Include the registration fees (but not travel expenses)
paid for sending any of the organization’s staff to conferences,
conventions, and meetings conducted by other organizations.

Travel expenses incurred by officers, directors, and
employees attending such conferences, conventions and
meetings must be reported on line 17.
Line 20. Interest. Enter the total interest expense for the year.
Do not include any interest attributable to rental property
(reported on Part VIII, line 6b) or any mortgage interest
(reported as an occupancy expense on line 16).
Line 21. Payments to affiliates. Enter certain types of
payments to organizations affiliated with (closely related to) the
filing organization.
Payments to affiliated state or national organizations.
Dues paid by a local organization to its affiliated state or
national (parent) organization are reported on line 21. Report on
this line predetermined quota support and dues (excluding
membership dues of the type described below) by local
agencies to their state or 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 21 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 for providing goods or services to affiliates can be
reported on line 21 if:
• 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
• The costs involved are not connected with the management
and general or fundraising functions of the filing 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 can be reported on line 21, but not
the expenses of preparing and maintaining the local
organization’s master list.
Federated fundraising agencies. Federated fundraising
agencies should include in their own support, and report in Part
VIII, line 1, 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 agencies
must report the allocations to participating agencies as grants
and other assistance on line 1, and quota support payments
to their state or national organization as payments to affiliates
on line 21.
Voluntary awards or grants to affiliates. Do not report on
line 21 voluntary awards or grants made by the organization to
its state or national organizations for specified purposes.
Membership dues paid to other organizations. Report
membership dues paid to obtain general membership benefits
from other organizations, such as regular services, publications,
and other materials, on line 24. This is the case if a charitable
organization pays dues to a trade association comprised of
otherwise unrelated members.
Properly distinguishing between payments to affiliates

TIP and grants and allocations is especially important if the
organization uses Form 990 for state reporting
purposes. If the organization uses Form 990 only for reporting
to the IRS, payments to affiliated or national organizations that
do not represent membership dues reportable as miscellaneous
expenses on line 24 can be reported either on line 21 or line 1.
Line 22. Depreciation, depletion, and amortization. If the
organization records depreciation, depletion, amortization, or
similar expenses, enter the total on line 22. Include any
depreciation or amortization of leasehold improvements and
intangible assets. An organization is not required to use the
Modified Accelerated Cost Recovery System (MACRS) to
compute depreciation reported on Form 990. For an
explanation of acceptable methods for computing depreciation
see Pub. 946, How to Depreciate Property. If an amount is

-38-

Page 39 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

reported on this line, the organization is required to maintain
books and records to substantiate any amount reported.
Line 23. Insurance. Enter total insurance expenses other than
insurance attributable to rental property (reported on Part VIII,
line 6b). Do not report on this line payments made by
organizations exempt under section 501(c)(8), (9), or (17) to
obtain insurance benefits for members. Report those expenses
on line 4. Do not report on this line the cost of
employment-related benefits such as health insurance, life
insurance, or disability insurance provided by the organization
to its officers and employees. Report those expenses on lines
8 and 9. Do not report on this line property or
occupancy-related insurance. Report those expenses on line
16.
Line 24. Other expenses. Enter the types and amounts of
miscellaneous expenses which were not reported on lines 1
through 23. Include payments by the organization to
professional fundraisers of fundraising expenses such as
printing, paper, envelopes, postage, mailing list rental, and
equipment rental, if the organization is able to distinguish these
expense amounts from fees for professional fundraising
services reportable on line 11e. Enter the 5 largest dollar
amounts on lines 24a through 24e and the total of all remaining
expenses on line 24f. However, the organization must
separately report the amount, if any, of unrelated business
income taxes on line 24. If lines 24a through 24e contain an
amount labeled “other expenses” or “miscellaneous expenses”
or something similar, the amount reported cannot exceed 5% of
the total expenses reported on line 25.
Line 25. Total functional expenses. Section 501(c)(3) and
501(c)(4) organizations and section 4947(a)(1) nonexempt
charitable trusts: Add lines 1 through 24f and enter the totals
on line 25 in columns (A), (B), (C), and (D).
All other organizations: Add lines 1 through 24f and enter
the total on line 25 in column (A).
Line 26. Joint Costs. Organizations that included in program
service expenses (column (B) of Part IX) 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 IX. Any costs provided here are
not to be deducted from the other lines in Part IX on which they
are reported.
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 non-fundraising 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 fundraising expenses and
must be reported in column (D). Do not report such expenses
as program service expenses in column (B).
Any method of allocating joint costs between columns (B)
and (D) must be reasonable under the facts and circumstances
of each case. Most states with reporting requirements for
charitable organizations and other organizations that solicit
contributions either require or allow reporting of joint costs
under AICPA Statement of Position 98-2 (SOP 98-2).

in Part X, it is only for the end-of-year balance sheet figure
reported in column (B). If this is the organization’s final return,
enter zeros on lines 16, 26, 33, and 34 in column (B).
Line 1. Cash (non-interest bearing). Enter the total funds
that the organization has in cash, including amounts held as
“petty cash” at its offices or other facilities, and amounts held in
banks in non-interest bearing accounts. Do not include cash
balances held in an investment account with a financial
institution and reported on lines 11 through 13.
Line 2. Savings and temporary cash investments. Enter the
combined total of amounts held in interest-bearing checking
and savings accounts, deposits in transit, temporary cash
investments (such as money market funds, commercial paper,
and certificates of deposit), and U.S. Treasury bills or other
governmental obligations that mature in less than a year. Do
not include cash balances held in an investment account with a
financial institution and reported on lines 11 through 13. Do not
include advances to employees or officers or refundable
deposits paid to suppliers or other independent contractors.
Report the income from these investments on Part VIII, line 3.
Line 3. Pledges and grants receivable, Net. Enter the total
of (a) all pledges receivable, less any amounts estimated to be
uncollectible, including pledges made by officers, directors,
trustees, key employees, and highest compensated
employees and (b) all grants receivable.
Organizations that follow Statement of Financial Accounting
Standards (SFAS) 116 can report the present value of the
grants receivable as of each balance sheet date.
Line 4. Accounts Receivable, Net. Enter the organization’s
total accounts receivable (reduced by any allowance for
doubtful accounts) from the sale of goods and 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 15, Other assets.
Report the net amount of all receivables due from officers,
directors, trustees, or key employees on line 5. Report
receivables (including loans and advances) due from other
disqualified persons on line 6. Receivables (including loans and
advances) from employees who are not current or former
officers, directors, trustees, key employees, or disqualified
persons must be reported on line 7.
Lines 5 and 6. Receivables from current officers, directors,
trustees, key employees, and highest compensated
employees.
Report on line 5 receivables due from current or former
officers, directors, trustees, key employees, and highest
compensated employees. Section 501(c)(3) and 501(c)(4)
organizations must also report on line 6 receivables due from
other disqualified persons (for purposes of section 4958, see
Appendix G) and persons described in section 4958(c)(3)(B).
Include all amounts owed on secured and unsecured loans
made to such persons. Report interest from such receivables
on Part VIII, line 11. Do not report on line 5 or 6 (1) pledges or
grants receivable, which are to be reported on line 3 or (2)
receivables that are excepted from reporting in Schedule L
(Form 990 or 990-EZ), Part II (except for excess benefit
transactions involving receivables). If the organization must
report receivables on either line 5 or 6, it must answer “Yes” to
Part IV, line 26 and complete Schedule L (Form 990 or
990-EZ), Part II.
Line 7. Notes and loans receivable, Net. Enter the net
amount of all notes receivable and loans receivable not listed
on lines 5 and 6, including receivables from unrelated third
parties. The term “unrelated third parties” includes
independent contractors providing goods or services and
employees who are not current or former officers, directors,
trustees, key employees, highest compensated employees
or disqualified persons. Do not include the following:
• Receivables reported on line 4.
• Program-related investments reported on line 13.
• Notes receivable acquired as investments reported on line
12.
Line 8. Inventories for sale or use. Enter the amount of
materials, goods, and supplies held for future sale or use,

Part X. Balance Sheet
All organizations must complete Part X. No substitute balance
sheet will be accepted. All references to Schedule D are to
Schedule D (Form 990), Supplemental Financial Statements.
Column (A) — Beginning of Year
In column (A), enter the amount from the preceding year’s Form
990, column (B). If the organization was excepted from filing
Form 990 for the preceding year, enter amounts the
organization would have entered in column (B) for that year. If
this is the organization’s first year of existence, enter zeros on
lines 16, 26, 33, and 34 in column (A).
Column (B) — End of Year
When Schedule D (Form 990) reporting is required for any item

-39-

Page 40 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

whether purchased, manufactured by the organization, or
donated.
Line 9. 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, or pension costs, and
expenses incurred for a solicitation campaign to be conducted
in a future accounting period.
Line 10a. Land, buildings, and equipment. Enter the cost or
other basis of all land, building, and equipment held at the end
of the year. Include both property held for investment purposes
and property used for the organization’s exempt functions. If an
amount is reported here, answer “Yes” to Part IV, line 11 and
complete Schedule D (Form 990), Part VI. The amount reported
on line 10a must equal the total of Schedule D, Part VI,
columns (a) and (b).
Line 10b. Accumulated depreciation. Enter the total amount
of accumulated depreciation with respect to the assets reported
on line 10a. The amount reported on line 10b must equal the
total of Schedule D (Form 990), Part VI, column (c).
Line 10c. Column (A) — Beginning of year. Enter the cost or
other basis of land, buildings, and equipment, net of any
accumulated depreciation, as of the beginning of the year.
Line 10c. Column (B) — End of year. Enter line 10a minus
line 10b. The amount reported must equal the total of Schedule
D, (Form 990), Part VI, column (d).
Line 11. Investments — publicly traded securities. Enter the
total value of publicly traded securities held by the
organization as investments. 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 an established exchange and for
which market quotations are published or are otherwise readily
available. Report dividends and interest from these securities
on Part VIII, line 3.
Do not report on line 11 publicly traded stock for which the
organization holds 5% or more of the outstanding shares of the
same class or publicly traded stock in a corporation that
comprises more than 5% of the organization’s total assets.
Report these investments on line 12.
Line 12. Investments — other securities. Enter on this line
the total amount of all securities, partnerships, or funds that
are not publicly traded. This includes stock in a closely held
company whose stock is not available for sale to the general
public or which is not widely traded. Other securities also
include publicly traded stock for which the organization holds
5% or more of the outstanding shares of the same class, and
publicly traded stock in a corporation that comprises more than
5% of the organization’s total assets. Do not include program
related investments.
If an amount is reported on this line that is 5% or more of the
amount reported on Part X, line 16, answer “Yes” to Part IV, line
11b and complete Schedule D (Form 990), Part VII. The
amount reported on column (B), line 12 must equal the total of
Schedule D (Form 990), Part VII, column (b).
Line 13. Program-related investments. Report here the total
book value of all investments made primarily to accomplish the
organization’s exempt purposes rather than to produce income.
Examples of program-related investments include student loans
and notes receivable from other exempt organizations that
obtained the funds to pursue the filing organization’s exempt
function.
If the amount reported on this line is 5% or more of the
amount reported on Part X, line 16, answer “Yes” to Part IV, line
11c and complete Part VIII of Schedule D (Form 990). The
amount reported on Part X, column (B), line 13 must equal the
total of Schedule D (Form 990), Part VIII, column (b).
Line 14. Intangible assets. Report on this line the total value
of all non-monetary, non-physical assets such as copyrights,
patents, trademarks, mailing lists, or goodwill.
Line 15. Other assets. Report on this line the total book value
of all assets held and not reported on lines 1 through 14.

If an amount is reported on this line that is 5% or more of the
amount reported on Part X, line 16, answer “Yes” to Part IV, line
11d and complete Schedule D (Form 990), Part IX. The amount
reported on Part X, column (B), line 15 must equal the total of
Schedule D, Part IX, column (b).
Line 16. Total assets. Add the totals in columns (A) and (B),
lines 1 through 15. The amounts on line 16 must equal the
amounts on line 34 for both the beginning and end of the year.
The organization must enter a zero or a dollar amount on this
line.
Line 17. Accounts payable and accrued expenses. Enter
the total of accounts payable to suppliers, service providers,
property managers and other independent contractors, plus
accrued expenses such as salaries payable, accrued payroll
taxes, and interest payable.
Line 18. Grants payable. Enter the unpaid portion of grants
and awards that the organization has committed to pay other
organizations or individuals, regardless of whether the
commitments have been communicated to the grantees.
Line 19. Deferred revenue. Report revenue that the
organization has received but not yet earned as of the balance
sheet date under its method of accounting.
Line 20. Tax-exempt bond liabilities. Enter the amount of
tax-exempt bonds (or other obligations) for which the
organization has a direct or indirect liability which were either
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 gross income of the recipient for federal
income tax purposes under section 103.
See also Part IV, line 24, and Schedule K (Form 990).
Line 21. Escrow or custodial account liability. Enter the
amount of funds or other assets held in an escrow or
custodial account for other individuals or organizations. Enter
these amounts only if the related assets (such as cash) are
reported on lines 1 through 15 of this part. If an amount is
reported on this line, the organization must also answer “Yes” to
Part IV, line 9 and complete Schedule D (Form 990), Part IV. If
the organization has signature authority over, or another
interest in an escrow or custodial account for which it does
not report the assets or liabilities, it must also answer “Yes” to
Part IV, line 9 and complete Schedule D, Part IV.
Example. A credit counseling organization collects
amounts from debtors to remit to creditors and reports the
amounts temporarily in its possession as cash on line 1 of the
balance sheet. It must then report the corresponding liability
(the amounts to be paid to the creditors on the debtors’ behalf)
on line 21.
Lines 22 – 24. Enter on line 22 the unpaid balance of loans
payable (whether or not secured) to current and former
officers, directors, trustees, key employees, highest
compensated employees, disqualified persons (for
purposes of section 4958), and persons described in section
4958(c)(3)(B). If the organization reports a loan payable on this
line, it must answer “Yes” to Part IV, line 26 and complete
Schedule L (Form 990 or 990-EZ), Part II. Do not report on line
22 accrued but unpaid compensation owed by the
organization.
On line 23, enter the total amount of secured mortgages and
notes payable to unrelated third parties that are secured by the
organization’s assets as of the end of the tax year. Report on
line 25 (and not line 23) any secured mortgages and notes
payable to related organizations.
On line 24, enter the total amount of notes and loans that are
payable to unrelated third parties but are not secured by the
organization’s assets. Report on line 25 (and not line 24) any
unsecured payables to related organizations.
Line 25. Other liabilities. Enter the total amount of all
liabilities not properly reportable on lines 17 through 24. Items
properly reported on this line include federal income taxes

-40-

Page 41 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Line 31. Paid-In or capital surplus, or land, building, and
equipment fund. Enter the balance of paid-in capital in
excess of par or stated value for all stock issued and not yet
canceled, as recorded on the corporation’s books. If
stockholders or others made donations that the organization
records as paid-in capital, include them here. Enter the fund
balance for the land, building, and equipment fund on this line.
Line 32. Retained earnings or accumulated income,
endowment, or other funds. For corporations, enter the
balance of retained earnings as recorded on the corporation’s
books, or similar account, minus the cost of any corporate
treasury stock. For trusts, enter the balance in the accumulated
income or similar account. For those organizations using the
fund method of 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 30 and 31.
Line 33. Total net assets or fund balances. For
organizations that follow SFAS 117, enter the total of lines 27
through 29. For all other organizations, enter the total of lines
30 through 32. All filers must enter a zero or a dollar amount on
this line.
Line 34. Total liabilities and net assets/fund balances.
Enter the total of line 26 and line 33. This amount must equal
the amount on line 16. The organization must enter a zero or a
dollar amount on this line.

payable and secured or unsecured payables to related
organizations. The organization must also answer “Yes” to
Part IV, line 11 and complete Schedule D (Form 990), Part X.
Line 26. Total liabilities. Add the totals in columns (A) and
(B), lines 17 through 25. The organization must enter a zero or
a dollar amount on this line.

Net Assets and Fund Balances
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. However, a Form 990 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 27, and complete
lines 27 through 29 and lines 33 and 34. 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.
Enter the sum of the three classes of net assets on line 33. On
line 34, add the amounts on lines 26 and 33 to show total
liabilities and net assets. The amount on line 34 must equal the
amount on line 16.

Part XI. Financial Statements and
Reporting
Line 1. Accounting method. Indicate the method of
accounting used in preparing this return. See General
Instructions, D. Accounting Periods and Methods. Provide an
explanation in Schedule O (Form 990) (1) if the organization
changed its method of accounting from a prior year, or (2) if the
organization checked the “other” accounting method box.
Line 2. Financial statements and independent accountant.
Answer “Yes” or “No” to indicate on line 2a or line 2b whether
the organization’s financial statements for the reporting period
were compiled, reviewed or audited by an independent
accountant. An accountant is independent if he or she meets
the standards of independence set forth by the American
Institute of Certified Public Accountants (AICPA), the Public
Company Accounting Oversight Board (PCAOB), or another
similar body that oversees or sets standards for the accounting
or auditing professions.
If “Yes” to either line 2a or 2b, answer “Yes” or “No” on line
2c to indicate whether the organization has a committee that is
responsible under its governing documents or through
delegation by its governing body for (i) overseeing the
compilation, review or audit of the financial statements, and (ii)
the selection of an independent accountant that compiled,
reviewed, or audited the statements. Answer “Yes” only if both
(i) and (ii) apply. If this process has changed from the prior
year, describe in Schedule O (Form 990).
If the organization’s financial statements were compiled,
reviewed, or audited as part of a consolidated financial
statement only, check “Yes” on line 2a or 2b, as appropriate,
and check the appropriate box on line 2d to indicate whether
the financial statements were issued on a separate basis,
consolidated basis, or both.
Line 3a. Single Audit Act and OMB Circular A-133. Answer
“Yes” if during the year the organization was required under the
Single Audit Act of 1984, as amended in 1996, and OMB
Circular A-133 to undergo an audit or audits because of its
receipt of federal contract awards. The Single Audit Act requires
states, local governments, and nonprofit organizations that
expend $500,000 or more of federal awards in a year to obtain
an annual audit in accordance with the Act.
Line 3b. Required audits. If “Yes” to line 3a, indicate whether
the organization has undergone the required audit or audits. If
the answer to line 3b is “No,” explain in Schedule O (Form 990)
why the organization has not undergone any required audits
and describe any steps taken to undergo such audits.

Effective for reporting years ending after December 15,
2008, FSP FAS 117-1 addresses reporting of
CAUTION endowments as permanently restricted or temporarily
restricted funds. Further, a number of states have enacted or
are considering enacting the Uniform Prudent Management of
Institutional Funds Act (“UPMIFA”). If the organization is subject
to UPMIFA or FSP 117-1, it may affect the amounts reported in
lines 27 through 29.
Line 27. Unrestricted net assets. Enter the balance per
books of unrestricted 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.
Line 28. Temporarily restricted net assets. Enter the
balance per books of temporarily restricted net assets. Donors’
temporary restrictions may require that resources be used after
a specified date (time restrictions), or that resources be used for
a specified purpose (purpose restrictions), or both.
Line 29. Permanently restricted net assets. Enter the
balance per books of permanently restricted 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 results from gifts or
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 30 and complete lines 30 through 34. Report capital stock,
trust principal, or current funds on line 30. Report paid-in capital
surplus or land, building, or equipment funds on line 31. Report
retained earnings, endowment, accumulated income or other
funds on line 32.
Line 30. Capital stock, trust principal, or current funds. For
corporations, enter the balance per books of capital stock
accounts. Show par or stated value (or for stock with no par or
stated value, total amount received on issuance) of all classes
of stock issued and not yet canceled. For trusts, enter the
amount in the trust principal or corpus. For organizations using
the fund method of accounting, enter the fund balances for the
organization’s current restricted and unrestricted funds.

!

-41-

Page 42 of 79
2-FEB-2010

9:01 -

Instructions for Form 990 Return of Organization Exempt From Income Tax

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

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 can become material in the administration of any Internal Revenue law. The rules governing the confidentiality of
Forms 990 and 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

990

117 hr., 54 min.

990-EZ

29 hr., 10 min.

Schedule A (Form 990 or 990-EZ)

39 hr., 56 min.

6 hr., 51 min.

7 hr., 48 min.

-----

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

5 hr., 58 min.

1 hr., 35 min.

1 hr., 45 min.

-----

Schedule C (Form 990 or 990-EZ)

Learning about the law or
the form

Preparing
the
form

Copying, assembling,
and sending the form
to the IRS

16 hr., 4 min.

23 hr., 29 min.

1 hr., 4 min.

11 hr., 33 min.

14 hr., 24 min.

32 min.

22 hr., 0 min.

42 min.

1 hr., 5 min.

-----

Schedule D (Form 990)

30 hr., 51 min.

1 hr., 17 min.

1 hr., 51 min.

-----

Schedule E (Form 990 or 990-EZ)

5 hr., 30 min.

53 min.

1 hr., 1 min.

-----

Schedule F (Form 990)

6 hr., 42 min.

6 min.

12 min.

-----

Schedule G (Form 990 or 990-EZ)

24 hr., 9 min.

24 min.

48 min.

-----

Schedule H (Form 990)

71 hr., 1 min.

-----

1 hr., 9 min.

-----

Schedule I (Form 990)

5 hr., 15 min.

18 min.

23 min.

-----

Schedule J (Form 990)

13 hr., 21 min.

2 hr., 34 min.

2 hr., 54 min.

-----

Schedule K (Form 990)

9 hr., 34 min.

2 hr., 22 min.

2 hr., 39 min.

-----

Schedule L (Form 990 or 990-EZ)

5 hr., 30 min.

1 hr., 5 min.

1 hr., 13 min.

-----

Schedule M (Form 990)

28 hr., 27 min.

35 min.

1 hr., 5 min.

-----

Schedule N (Form 990 or 990-EZ)

7 hr., 53 min.

42 min.

51 min.

-----

Schedule O (Form 990)

43 min.

-----

-----

-----

Schedule R (Form 990)

14 hr., 36 min.

1 hr., 29 min.

1 hr., 52 min.

-----

We welcome comments on forms. If you have comments concerning the accuracy of these time estimates or suggestions for
making these forms simpler, we would be happy to hear from you. You can write to the Internal Revenue Service, Tax Products
Coordinating Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.
Do not send the form to this address. Instead, see When, Where, and How To File in General Instruction E.

-42-

Page 43 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Glossary
NOTES:

• Words in bold within a definition are defined elsewhere within the Glossary.
• All section references are to the Internal Revenue Code (Title 26 of U.S. Code)
or regulations under Title 26, unless otherwise specified.

• Definitions are for purposes of filing Form 990 (and Schedules) only.
35% controlled entity

An entity that is owned, directly or indirectly (e.g., under constructive ownership
rules of section 267(c)), by a given person, such as the organization’s current or
former officers, directors, trustee, or key employees listed in Form 990, Part
VII, Section 1, or the family members thereof (listed persons) as follows:
1. A corporation in which listed persons own more than 35% of the total
combined voting power;
2. A partnership in which listed persons own more than 35% of the profits
interest; or
3. A trust or estate in which listed persons own more than 35% of the
beneficial interest.

Accountable plan

A reimbursement or other expense allowance arrangement that satisfies the
requirements of section 62(c) by meeting the requirements of business
connection, substantiation, and returning amounts in excess of substantiated
expenses. See Regulations section 1.62-2(c)(2).

Activities conducted outside the United
States

For purposes of Schedule F (Form 990), Statement of Activities Outside the
United States, include grantmaking, fundraising, unrelated trade or business,
program services, or maintaining offices, employees, or agents in particular
regions outside the United States.

Applicable tax-exempt organization

A section 501(c)(3) or a 501(c)(4) organization that is tax-exempt under section
501(a), or that was such an organization at any time during the 5-year period
ending on the day of the excess benefit transaction.

Art

See works of art.

Audit

A formal examination of an organization’s financial records and practices by an
independent, certified public accountant with the objective of issuing a report on
the organization’s financial statements as to whether those statements are fairly
stated in accordance with generally accepted accounting principles (or other
recognized comprehensive basis of accounting).

Audited financial statements

Financial statements accompanied by a formal opinion or report prepared by an
independent, certified public accountant with the objective of assessing the
accuracy and reliability of the organization’s financial statements.

Audit committee

A committee, generally established by the governing body of an organization,
with the responsibilities to oversee the organization’s financial reporting process,
monitor choice of accounting policies and principles, monitor internal control
processes, or oversee hiring and performance of any external auditors.

Bingo

A game of chance played with cards that are generally printed with five rows of
five squares each. Participants place markers over randomly called numbers on
the cards in an attempt to form a pre-selected pattern such as a horizontal,
vertical, or diagonal line, or all four corners. The first participant to form the
pre-selected pattern wins the game. To be a bingo game, the game must be of the
type described in which wagers are placed, winners are determined, and prizes or
other property are distributed in the presence of all persons placing wagers in that
game. Satellite, internet, and progressive bingo are not bingo, because they are
conducted in many different places simultaneously, and the winners are not all
present when the wagers are placed, the winners are determined, and the prizes
are distributed. Thus, revenue and expenses associated with satellite, internet,
and progressive bingo should be included under pull tabs. Certain consolation
bingo games within a progressive bingo game can also qualify as bingo.

Board-designated endowment

See quasi-endowment.

Bond issue

An issue of two or more bonds that are:
1. Sold at substantially the same time;
2. Sold pursuant to the same plan of financing; and
3. Payable from the same source of funds.
See Regulations section 1.150-1(c).

-43-

Page 44 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Business relationship

For purposes of Part VI, line 2, business relationships between two persons
include the following.
1. One person is employed by the other in a sole proprietorship or by an
organization with which the other is associated as a trustee, director, officer,
key employee, or greater-than-35% owner.
2. One person is transacting business with the other (other than in the ordinary
course of either party’s business on the same terms as are generally offered to
the public), directly or indirectly, in one or more contracts of sale, lease, license,
loan, performance of services, or other transaction involving transfers of cash or
property valued in excess of $10,000 in the aggregate during the organization’s
tax year. Indirect transactions are transactions with an organization with which the
one person is associated as a trustee, director, officer, key employee, or
greater-than-35% owner.
3. The two persons are each a director, trustee, officer, or greater than 10%
owner in the same business or investment entity.
Ownership is measured by stock ownership (either voting power or value) of a
corporation, profits or capital interest in a partnership or limited liability company,
membership interest in a nonprofit organization, or beneficial interest in a trust.
Ownership includes indirect ownership (e.g., ownership in an entity that has
ownership in the entity in question); there can be ownership through multiple tiers
of entities.

Cash contributions

Contributions received in the form of cash, checks, money orders, credit card
charges, wire transfers, and other transfers and deposits to a cash account of the
organization.

Central organization

The parent organization in a group exemption, which exercises general
supervision and control over the subordinate organizations in the group
exemption.

CEO, executive director, or top management
official

See top management official. “CEO” stands for chief executive officer.

Certified historic structure

Any building or structure listed in the National Register of Historic Places as well
as any building certified as being of historic significance to a registered historic
district. See section 170(h)(4)(B) for special rules that apply to contributions
made after August 17, 2006.

Church

Certain characteristics are generally attributed to churches. These attributes of a
church have been developed by the IRS and by court decisions. They include:
distinct legal existence; recognized creed and form of worship; definite and distinct
ecclesiastical government; formal code of doctrine and discipline; distinct religious
history; membership not associated with any other church or denomination;
organization of ordained ministers; ordained ministers selected after completing
prescribed courses of study; literature of its own; established places of worship;
regular congregations; regular religious services; Sunday schools for the religious
instruction of the young; schools for the preparation of its ministers. The IRS
generally uses a combination of these characteristics, together with other facts
and circumstances, to determine whether an organization is considered a church
for federal tax purposes. A convention or association of churches is generally
treated like a church for federal tax purposes. See Pub. 1828, Tax Guide for
Churches and Religious Organizations.

Closely held stock

Generally, shares of stock in a closely held company that is not available for sale
to the general public or which is not widely traded (see further explanation in the
instructions for Part IX, line 12 and Schedule M (Form 990), Noncash
Contributions, line 10).

Collections of works of art, historical
treasures, and other similar assets

Include collections, as described in SFAS 116, of works of art, historical
treasures, and other similar assets held for public exhibition, education, or
research in furtherance of public service.

Collectibles

Include autographs, sports memorabilia, dolls, stamps, coins, books (other than
books and publications reported on line 4 of Schedule M), gems, and jewelry
(other than costume jewelry reportable on line 5 of Schedule M).

-44-

Page 45 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Compensation

Unless otherwise provided, all forms of cash and noncash payments or benefits
provided in exchange for services, including salary and wages, bonuses,
severance payments, deferred payments, retirement benefits, fringe benefits, and
other financial arrangements or transactions such as personal vehicles, meals,
housing, personal and family educational benefits, below-market loans, payment
of personal or family travel, entertainment, and personal use of the organization’s
property. Compensation includes payments and other benefits provided to both
employees and independent contractors in exchange for services. See also
deferred compensation, nonqualified deferred compensation, and reportable
compensation.

Compilation (compiled financial statements)

A compilation is a presentation of financial statements and other information that
is the representation of the management or ownership of an organization and
which has not been reviewed or audited by an independent accountant.

Conflict of interest policy

A policy that defines conflict of interest, identifies the classes of individuals within
the organization covered by the policy, facilitates disclosure of information that
can help identify conflicts of interest, and specifies procedures to be followed in
managing conflicts of interest. A conflict of interest arises when a person in a
position of authority over an organization, such as an officer, director, or
manager, can benefit financially from a decision he or she could make in such
capacity, including indirect benefits such as to family members or businesses
with which the person is closely associated. For this purpose, a conflict of interest
does not include questions involving a person’s competing or respective duties to
the organization and to another organization, such as by serving on the boards of
both organizations, that do not involve a material financial interest of, or benefit to,
such person. For a description of “conflict of interest” for purposes of determining
whether governing body members who are reviewing a potential excess benefit
transaction have a conflict of interest, pursuant to Regulations section
53.4958-6(c)(1)(iii), see instructions for Part VI, line 15.

Conservation easement

A restriction on the use that may be made of, or changes made to, real property
that is granted in perpetuity to a qualified organization exclusively for conservation
purposes. Conservation purposes include protection of natural habitat, the
preservation of open space; or the preservation of property for historic,
educational, or recreational purposes. Qualified organizations include
governmental units and certain tax-exempt organizations described in section
501(c)(3) that have a commitment to protect the conservation purposes of the
easement and the resources to enforce the restrictions. For more information see
Notice 2004-41, 2004-28 I.R.B. 31 and section 170(h). See also qualified
conservation contribution.

Contributions

Unless otherwise provided, includes donations, gifts, bequests, grants, and other
transfers of money or property to the extent that adequate consideration is not
provided in exchange and that the contributor intends to make a gift, whether or
not made for charitable purposes. A transaction can be partly a sale and partly a
contribution. See also cash contributions and noncash contributions.

-45-

Page 46 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Control

For purposes of determining related organizations:
Control of a nonprofit organization (or other organization without owners or
persons having beneficial interests, whether the organization is taxable or
tax-exempt)
One or more persons (whether individuals or organizations) control a nonprofit
organization if they have the power to remove and replace (or to appoint or elect,
if such power includes a continuing power to appoint or elect periodically or in the
event of vacancies) a majority of the nonprofit organization’s directors or trustees,
or a majority of the members who elect the nonprofit organization’s directors or
trustees. Such power can be exercised directly by a (parent) organization through
one or more of the (parent) organization’s officers, directors, trustees, or agents,
acting in their capacity as officers, directors, trustees, or agents of the (parent)
organization. Also, a (parent) organization controls a (subsidiary) nonprofit
organization if a majority of the subsidiary’s directors or trustees are trustees,
directors, officers, employees, or agents of the parent.
Control of a stock corporation
One or more persons (whether individuals or organizations) control a stock
corporation if they own more than 50% of the stock (by voting power or value) of
the corporation.
Control of a partnership or limited liability company
One or more persons control a partnership if they own more than 50% of the
profits or capital interests in the partnership (including a limited liability company
treated as a partnership or disregarded entity for federal tax purposes, regardless
of the designation under state law of the ownership interests as stock,
membership interests, or otherwise). A person also controls a partnership if the
person is a managing partner or managing member of a partnership or limited
liability company which has three or fewer managing partners or managing
members (regardless of which partner or member has the most actual control), or
if the person is a general partner in a limited partnership which has three or fewer
general partners (regardless of which partner has the most actual control).
Control of a trust with beneficial interests
One or more persons control a trust if they own more than 50% of the beneficial
interests in the trust.
See Regulations sections 301.7701-2, 3, and 4 for more information on
classification of corporations, partnerships, disregarded entities, and trusts.
Control can be indirect. See the Schedule R (Form 990) instructions for a
description of indirect control.

Controlled entity

An organization controlled by a controlling organization under section
512(b)(13). For the definition of control in this context, see section 512(b)(13)(D).

Controlling organization under section
512(b)(13)

An exempt organization that controls a controlled entity. Section 512(b)(13)
treats payments of interest, annuity, royalties, and rent from a controlled entity to a
controlling organization as unrelated business taxable income under certain
circumstances. For the definition of control in this context, see section
512(b)(13)(D).

Credit counseling services

Include the providing of information to the general public on budgeting, personal
finance, and saving and spending practices, or assisting individuals and families
with financial problems by providing them with counseling. See section
501(q)(4)(A).

Current year

The tax year for which the Form 990 is being filed; see also fiscal year.

Defeasance escrow

An irrevocable escrow established to redeem the bonds on their earliest call date
in an amount that, together with investment earnings, is sufficient to pay all the
principal of, and interest and call premiums on, bonds from the date the escrow is
established to the earliest call date. See Regulations section 1.141-12(d)(5).

Debt management plan services

Services related to the repayment, consolidation, or restructuring of a consumer’s
debt, including the negotiation with creditors of lower interest rates, the waiver or
reduction of fees, and the marketing and processing of debt management plans.
See section 501(q)(4)(B).

-46-

Page 47 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Deferred compensation

Compensation that is earned or accrued in, or is attributable to, one year and
deferred to a future year for any reason, whether or not funded, vested, or subject
to a substantial risk of forfeiture. Deferred compensation may or may not be
included in reportable compensation for the current year.

Director

See director or trustee.

Director or trustee

A member of the organization’s governing body, but only if the member has any
voting rights. A member of an advisory board that does not exercise any
governance authority over the organization is not considered a director or trustee.

Disqualified person

A. For purposes of section 4958; Form 990, Parts IX and X; and Schedule L
(Form 990 or 990-EZ), Transactions With Interested Persons, Parts I and II, any
person (including an individual, corporation, or other entity) who was in a position
to exercise substantial influence over the affairs of the applicable tax-exempt
organization at any time during a 5-year period ending on the date of the
transaction. Persons who hold certain powers, responsibilities, or interests are
among those who are in a position to exercise substantial influence over the
affairs of the organization.
A disqualified person includes:

• A disqualified person’s family member,
• A 35% controlled entity of a (1) disqualified person and/or (2) family members
of the disqualified person,

• A donor or donor advisor to a donor advised fund, or
• An investment advisor of a sponsoring organization.
The disqualified persons of a supported organization include the disqualified
persons of a section 509(a)(3) supporting organization that supports the
supported organization.
See Appendix G for more information on disqualified persons and section 4958
excess benefit transactions.
B. Under section 4946, a disqualified person includes:
1. A substantial contributor, which is any person who gave an aggregate
amount of more than $5,000, if that amount is more than 2% of the total
contributions the foundation or organization received from its inception through
the end of the year in which that person’s contributions were received. If the
organization is a trust, a substantial contributor includes the creator of the trust
(without regard to the amount of contributions the trust received from the creator
and related persons). Any person who is a substantial contributor at any time
generally remains a substantial contributor for all future periods even if later
contributions by others push that person’s contributions below the 2% figure
discussed above. Gifts from the contributor’s spouse are treated as gifts from the
contributor. Gifts are generally valued at fair market value as of the date the
organization received them.
2. A foundation manager, defined as an officer, director, or trustee of the
organization or any individual having powers or responsibilities similar to those of
officers, directors, or trustees.
3. An owner of more than 20% of the voting power of a corporation, profits
interest of a partnership, or beneficial interest of a trust or an unincorporated
enterprise that is a substantial contributor to the organization.
4. A family member of an individual in the first three categories. For this
purpose, “family member” includes only the individual’s spouse, ancestors,
children, grandchildren, great grandchildren, and the spouses of children,
grandchildren, and great-grandchildren.
5. A corporation, partnership, trust, or estate in which persons described in (1)
through (4) above own more than 35% of the voting power, profits interest, or
beneficial interest.
For purposes of section 509(a)(2), as referenced in Schedule A (Form 990 or
990-EZ), Public Charity Status and Public Support, a disqualified person is
defined in section 4946, except that it does not include an organization described
in section 509(a)(1).
For purposes of section 509(a)(3), as referenced in Schedule A (Form 990 or
990-EZ), a disqualified person is defined in section 4946, except that it does not
include a foundation manager or an organization described in section 509(a)(1) or
509(a)(2).
Disregarded entity or entities

An entity wholly owned by the organization that is generally not treated as a
separate entity for Federal tax purposes. (e.g., single-member limited liability
company of which the organization is the sole member.) See Regulations sections
301.7701-2 and 3.

-47-

Page 48 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Domestic organization

A corporation or partnership is domestic if created or organized in the United
States or under the law of the United States or of any state or possession. A trust
is domestic if a court within the United States or a U.S. possession is able to
exercise primary supervision over the administration of the trust, and one or more
U.S. persons (or persons in possessions of the United States) have the authority
to control all substantial decisions of the trust.

Donor advised fund

A fund or account:
1. That is separately identified by reference to contributions of a donor or
donors;
2. That is owned and controlled by a sponsoring organization; and
3. For which the donor or donor advisor has or reasonably expects to have
advisory privileges in the distribution or investment of amounts held in the donor
advised funds or accounts because of the donor’s status as a donor.
A donor advised fund does not include any fund or account:
1. That makes distributions only to a single identified organization or
governmental entity, or
2. In which a donor or donor advisor gives advice about which individuals
receive grants for travel, study, or other similar purposes, if:
a. The donor or donor advisor’s advisory privileges are performed exclusively
by such person in his or her capacity as a committee member in which all of the
committee members are appointed by the sponsoring organization;
b. No combination of donors or donor advisors (and related persons as
defined below) directly or indirectly control the committee; and
c. All grants from the fund or account are awarded on an objective and
nondiscriminatory basis following a procedure approved in advance by the board
of directors of the sponsoring organization. The procedure must be designed to
ensure that all grants meet the requirements of section 4945(g)(1), (2), or (3); or
3. That the Secretary exempts from being treated as a donor advised fund
because either such fund or account is advised by a committee not directly or
indirectly controlled by the donor or donor advisor or such fund benefits a single
identified charitable purpose. For example, see Notice 2006-109, 2006-51 I.R.B.
1121, and any future related guidance.

Donor advisor

Any person appointed or designated by a donor to advise a sponsoring
organization on the distribution or investment of amounts held in the donor’s
donor advised fund or similar account.

EIN

Employer identification number, a nine-digit number. Use Form SS-4 to apply for
an EIN.

Employee

Any individual who, under the usual common law rules applicable in determining
the employer-employee relationship, has the status of an employee, and any other
individual who is treated as an employee for federal employment tax purposes
under section 3121(d). See Pub. 1779 for more information.

Endowment

See term endowment, permanent endowment, and quasi-endowment. See
also SFAS 117.

Escrow or custodial account

Refers to an account (whether a segregated account at a financial institution or a
set-aside on the organization’s books and records) over which the organization
has signature authority, in which the funds are held for the benefit of other
organizations or individuals, regardless of whether the funds are reported on Part
X, line 21, and regardless of whether the account is labeled as “escrow account,”
“custodial account,” “trust account,” or some similar term. An escrow or custodial
account does not include a split-interest trust (or the beneficial interest in such
trust) described in section 4947(a)(2) for which the filing organization is a trustee,
other than a trust in the trade or business of lending money, repairing credit, or
providing debt management plan services, payment processing, or similar
services.

Excess benefit transaction

In the case of an applicable tax-exempt organization, any transaction in which
an excess benefit is provided by the organization, directly or indirectly to, or for the
use of, any disqualified person, as defined in section 4958. Excess benefit
generally means the excess of the economic benefit received from the applicable
organization over the consideration given (including services) by a disqualified
person, but see the special rules on page 49 regarding donor advised funds and
supporting organizations. See Appendix G for more information.

-48-

Page 49 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Donor advised fund. For a donor advised fund, an excess benefit transaction
also includes a grant, loan, compensation, or similar payment from the fund to a:
• Donor or donor advisor;
• Family member of a donor or donor advisor;
• 35% controlled entity of a donor or donor advisor; or
• 35% controlled entity of a family member of a donor or donor advisor.
The excess benefit in this transaction is the amount of the grant, loan,
compensation, or similar payments.
For additional information see the Instructions for Form 4720.
Supporting organization. For any supporting organization, defined in section
509(a)(3), an excess benefit transaction also includes grants, loans,
compensation, or similar payments provided by the supporting organization to a:
• Substantial contributor,
• Family member of a substantial contributor,
• 35% controlled entity of a substantial contributor, or
• 35% controlled entity of a family member of a substantial contributor.
For this purpose, the excess benefit is defined as the amount of the grant, loan,
compensation, or similar payments. Additionally, an excess benefit transaction
includes any loans provided by the supporting organization to a disqualified
person (other than an organization described in section 509(a)(1), (2), or (4)).
Exempt bond

See tax-exempt bond.

Fair market value

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.

Family member, family relationship

Unless specified otherwise, the family of an individual includes only his or her
spouse, ancestors, brothers and sisters (whether whole or half blood), children
(whether natural or adopted), grandchildren, great-grandchildren, and spouses of
brothers, sisters, children, grandchildren, and great-grandchildren.

FIN 48

Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting
for Uncertainty in Income Taxes -an interpretation of FASB Statement No. 109.
The organization can be required to provide in Schedule D (Form 990),
Supplemental Financial Statements, the text of the footnote to its financial
statements regarding the organization’s liability for uncertain tax positions under
FIN 48.

Financial statements

An organization’s statements of revenue and expenses and balance sheet, or
similar statements prepared regarding the financial operations of the organization.

Fiscal year

An annual accounting period ending on the last day of a month other than
December. See also tax year and current year.

Foreign government

A governmental agency or entity, or a political subdivision thereof, that is not
classified as a United States agency or governmental unit, regardless of where
it is located or operated.

Foreign individual

A person, including a U.S. citizen or resident, who lives or resides outside the
United States. For purposes of Form 990, Part IX, and Schedule F (Form 990),
Statement of Activities Outside the United States, a person who lives or resides
outside the United States at the time the grant is paid or distributed to the
individual is a foreign individual.

Foreign organization

A foreign estate or trust, nonprofit or other nongovernmental organization,
partnership, corporation, or other entity that is not created or organized in the
United States or under the laws of the United States. A foreign organization
includes an affiliate that is organized as a legal entity separate from the filing
organization, but does not include any branch office, account, or employee of the
organization located outside the United States.

Fundraising

See fundraising activities.

-49-

Page 50 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Fundraising activities

For purposes of Schedule G (Form 990 or 990-EZ), Part I, activities undertaken to
induce potential donors to contribute money, securities, services, materials,
facilities, other assets, or time. They include publicizing and conducting
fundraising campaigns; maintaining donor mailing lists; conducting fundraising
events, preparing and distributing fundraising manuals, instructions, and other
materials; professional fundraising services; and conducting other activities
involved with soliciting contributions from individuals, foundations, governments,
and others. Fundraising activities do not include gaming, the conduct of any trade
or business that is regularly carried on, or activities substantially related to the
accomplishment of the organization’s exempt purpose (other than by raising
funds).

Fundraising events

Include dinners and dances, door-to-door sales of merchandise, concerts,
carnivals, sports events, auctions, casino nights (in which participants can play
casino-style games but the only prizes or auction items provided to participants
are noncash items that were donated to the organization), and similar events not
regularly carried on that are conducted for the primary purpose of raising funds.
Fundraising events do not include the following:
1. The conduct of a trade or business that is regularly carried on;
2. Activities substantially related to the accomplishment of the organization’s
exempt purposes (other than by raising funds);
3. Solicitation campaigns that generate only contributions, which may involve
gifts of goods or services from the organization of only nominal value, or
sweepstakes, lotteries, or raffles in which the names of contributors or other
respondents are entered in a drawing for prizes of only nominal value; and
4. Gaming.

GAAP

See generally accepted accounting principles.

Gaming

Includes (but is not limited to): bingo, pull tabs/instant bingo (including satellite
and progressive bingo), Texas Hold-Em Poker and other card games, raffles,
scratch-offs, charitable gaming tickets, break-opens, hard cards, banded tickets,
jar tickets, pickle cards, Lucky Seven cards, Nevada Club tickets, casino nights/
Las Vegas nights (other than events not regularly carried on in which participants
can play casino-style games but the only prizes or auction items provided to
participants are noncash items that were donated to the organization, which
events are fundraising events), and coin-operated gambling devices.
Coin-operated gambling devices include slot machines, electronic video slot or
line games, video poker, video blackjack, video keno, video bingo, video pull tab
games, etc.

Generally accepted accounting principles/
GAAP

The accounting principles set forth by the Financial Accounting Standards Board
(FASB) and the American Institute of Certified Public Accountants (AICPA) that
guide the work of accountants in reporting financial information and preparing
audited financial statements for organizations.

Governing body

The group of persons authorized under state law to make governance decisions
on behalf of the organization and its shareholders or members, if applicable. The
governing body is, generally speaking, the board of directors (sometimes referred
to as board of trustees) of a corporation or association, or the board of trustees of
a trust (sometimes referred to simply as the trustees, or trustee if only one
trustee).

Government official

A federal, state or local official described within section 4946(c).

Governmental issuer

A State or local governmental unit that issues a tax-exempt bond.

Governmental unit

A State, a possession of the United States, or a political subdivision of a
State or U.S. possession, the United States, or the District of Columbia. See
section 170(c)(1).

Grants and other assistance

Include awards, prizes, contributions, noncash assistance, program-related
investments, cash allocations, stipends, scholarships, fellowships, research
grants, and similar payments and distributions made by the organization during
the tax year. It does not include salaries or other compensation to employees or
payments to independent contractors if the primary purpose is to serve the
direct and immediate needs of the organization (such as legal, accounting, or
fundraising services).

Gross proceeds

For purposes of Schedule K (Form 990), Supplemental Information on
Tax-Exempt Bonds, generally any sale proceeds, investment proceeds,
transferred proceeds, and replacement proceeds of an issue. See Regulations
sections 1.148-1(b) and 1(c).

-50-

Page 51 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Gross receipts

See Appendix B, How to Determine Whether an Organization’s Gross Receipts
Are Normally $25,000 (or $5,000) or Less and Appendix C, Special Gross
Receipts Tests for Determining Exempt Status of section 501(c)(7) and 501(c)(15)
Organizations.

Group exemption

Tax exemption of a group of organizations all exempt under the same Code
section, applied for and obtained by a central organization on behalf of
subordinate organizations under the central organization’s general supervision
or control. See Rev. Proc. 80-27, 1980-1 C.B. 677, and Appendix E. Group
Returns — Reporting Information on Behalf of the Group, for more information.

Group return

A Form 990 filed by the central organization of a group exemption for two or
more of the subordinate organizations. See General Instructions and Appendix
E. Group Returns — Reporting Information on Behalf of the Group, for more
information.

Highest compensated employee

One of the five highest compensated employees of the organization (including
employees of a disregarded entity of the organization) other than current
officers, directors, trustees, or key employees. The five highest compensated
employees are determined by the amounts of reportable compensation for the
calendar year ending with or within the organization’s tax year.

Historical treasure

A building, structure, area, or property (real or personal) with recognized cultural,
aesthetic, or historical value that is significant in the history, architecture,
archeology, or culture of a country, state, or city.

Hospital

For purposes of Schedule H (Form 990), Hospitals, a hospital is a facility that is,
or is required to be, licensed, registered, or similarly recognized by a state as a
hospital. This includes a hospital that is operated through a disregarded entity or
a joint venture treated as a partnership for federal income tax purposes. It does
not include hospitals that are located outside the United States. It also does not
include hospitals that are operated by entities organized as separate legal entities
from the organization that are taxable as a corporation for federal tax purposes
(except for members of a group exemption included in a group return filed by
an organization). For purposes of Schedule H (Form 990), an animal hospital is
not a hospital.

Hospital (or cooperative hospital service
organization)

For purposes of Schedule A (Form 990 or 990-EZ), Public Charity Status and
Public Support, a hospital (or cooperative hospital service organization) is an
organization whose main purpose is to provide hospital or medical care. For
purposes of Schedule A, a rehabilitation institution or an outpatient clinic can
qualify as a hospital if its principal purposes or functions are the providing of
hospital or medical care, but the term does not include medical schools, medical
research organizations, convalescent homes, homes for children or the aged,
animal hospitals, or vocational training institutions for handicapped individuals.

Household goods

Include furniture, furnishings, electronics, appliances, linens, and other similar
items. They do not include food, paintings, antiques and other objects of art,
jewelry and gems (other than costume jewelry), and other collectibles.

Independent contractor

A person who provides services to the organization but who is not treated as an
employee. See Pub. 1779 for more information.

Independent voting member of governing
body

A voting member of the governing body, if all three of the following
circumstances applied at all times during the organization’s tax year:
1. The member was not compensated as an officer or other employee of the
organization or of a related organization (see the instructions for Schedule R,
Related Organizations and Unrelated Partnerships), except as provided in the
religious exception discussed in the instructions for Form 990, Part VI.
2. The member did not receive total compensation or other payments
exceeding $10,000 during the organization’s tax year from the organization or
from related organizations as an independent contractor, other than reasonable
compensation for services provided in the capacity as a member of the
governing body. For example, a person who receives reasonable expense
reimbursements and reasonable compensation as a director of the organization
does not cease to be independent merely because he or she also received
payments of $7,500 from the organization for other arrangements.
3. Neither the member, nor any family member of the member, was involved
in a transaction with the organization (whether directly or indirectly through
affiliation with another organization) required to be reported on Schedule L (Form
990 or 990-EZ), Transactions With Interested Persons, for the organization’s tax
year, or in a transaction with a related organization of a type and amount that
would be reportable on Schedule L (Form 990 or 990-EZ) if required to be filed by
the related organization.

-51-

Page 52 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

A member of the governing body is not considered to lack independence merely
because of any of the following circumstances.
1. The member is a donor to the organization, regardless of the amount of the
contribution.
2. The member has taken a bona fide vow of poverty and either:
a. Receives compensation as an agent of a religious order or a section
501(d) religious or apostolic organization, but only under circumstances in which
the member does not receive taxable income (for example, Rev. Rul. 77-290,
1977-2 C.B. 26; Rev. Rul. 80-332); or
b. Belongs to a religious order that receives sponsorship or payments from the
organization that do not constitute taxable income to the member.
3. The member receives financial benefits from the organization solely in the
capacity of being a member of the charitable or other class served by the
organization in the exercise of its exempt function, such as being a member of a
section 501(c)(6) organization, so long as the financial benefits comply with the
organization’s terms of membership.
Initial contract

A binding written contract between an applicable tax-exempt organization and a
person who was not a disqualified person immediately prior to entering into the
contract.

Instant bingo

See pull tabs.

Institutional trustee

A trustee that is not an individual or natural person but an organization. For
instance, a bank or trust company serving as the trustee of a trust is an
institutional trustee.

Joint venture

Unless otherwise provided, a partnership, limited liability company, or other entity
treated as a partnership for federal tax purposes, as described in Regulations
sections 301.7701-1 through 301.7701-3.

Key employee

For purposes of Form 990, an employee of an organization (other than an
officer, director, or trustee) who meets all three of the following tests applied in
the following order:
1. $150,000 Test. Receives reportable compensation from the organization
and all related organizations in excess of $150,000 for the calendar year ending
with or within the organization’s tax year.
2. Responsibility Test. The employee:
a. has responsibilities, powers or influence over the organization as a whole
similar to those of officers, directors, or trustees;
b. manages a discrete segment or activity of the organization that represents 10%
or more of the activities, assets, income, or expenses of the organization, as
compared to the organization as a whole;
c. or has or shares authority to control or determine 10% or more of the
organization’s capital expenditures, operating budget, or compensation for
employees.
3. Top 20 Test. Is one of the 20 employees (that satisfy the $150,000 Test and
Responsibility Test) with the highest reportable compensation from the
organization and related organizations for the calendar year ending with or within
the organization’s tax year.
See instructions for Part VII for examples of key employees.

Legislation

Includes action by Congress, any state legislature, any local council, or similar
governing body with respect to acts, bills, resolutions, or similar items or by the
public in referenda, ballot initiatives, constitutional amendments or similar
procedures. It does not include actions by executive, judicial or administrative
bodies.

Lobbying

See lobbying activities.

Lobbying activities

All activities intended to influence foreign, national, state or local legislation. Such
activities include direct lobbying (attempting to influence the legislators) and
grassroots lobbying (attempting to influence legislation by influencing the general
public).

Maintaining offices, employees or agents

For purposes of Schedule F (Form 990), Statement of Activities Outside the
United States, includes principal, regional, district, or branch offices, such offices
maintained by agents, and persons situated at those offices paid wages for
services performed. “Agent” is defined under traditional agency principles (but
does not include volunteers).

-52-

Page 53 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Management company

An organization that performs management duties for another organization
customarily performed by or under the direct supervision of the other
organization’s officers, directors, trustees, or key employees. These
management duties include, but are not limited to, hiring, firing, and supervising
personnel; planning or executing budgets or financial operations; and supervising
exempt operations or unrelated trades or businesses.

Medical research

For purposes of a medical research organization operated in conjunction with a
hospital (see Schedule A (Form 990 or 990-EZ), Public Charity Status and Public
Support), medical research means investigations, studies and experiments
performed to discover, develop, or verify knowledge relating to physical or mental
diseases and impairments and their causes, diagnosis, prevention, treatment, or
control.

Member of the governing body

A person who serves on an organization’s governing body, including a director
or trustee, but not if the person lacks voting power.

Noncash contributions

Contributions of property, tangible or intangible, other than money. Noncash
contributions include, but are not limited to, stocks, bonds, and other securities;
real estate; works of art; stamps, coins, and other collectibles; clothing and
household goods; vehicles, boats, and airplanes; inventories of food, medical
equipment or supplies, books, or seeds; intellectual property, including patents,
trademarks, copyrights, and trade secrets; donated items that are sold
immediately after donation, such as publicly traded stock or used cars; and items
donated for sale at a charity auction. Noncash contributions do not include
volunteer services performed for the reporting organization or use of facilities.

Nonexempt charitable trust

A trust that meets the following conditions:

• Is not exempt from tax under section 501(a),
• All of its unexpired interests are devoted to charitable purposes, and
• A charitable deduction was allowed for contributions to the trust under section

170, section 545(b)(2), section 642(c), section 2055, section 2106(a)(2), or section
2522, or for amounts paid by or permanently set aside by the trust under section
642(c).

Nonqualified deferred compensation

Deferred compensation that is earned pursuant to a nonqualified plan or
nongovernmental section 457 plan. Different rules can apply for purposes of
identifying arrangements subject to sections 83, 409A, 457(f), and 3121(v).
Earned but unpaid incentive compensation can be deferred pursuant to a
nonqualified deferred compensation plan.

Officer

Unless otherwise provided, (e.g., Signature Block, principal officer in Heading) a
person elected or appointed to manage the organization’s daily operations, such
as a president, vice-president, secretary, treasurer, and, in some cases, Board
Chair. The officers of an organization are determined by reference to its
organizing document, bylaws, or resolutions of its governing body, or as otherwise
designated consistent with state law, but at a minimum include those officers
required by applicable state law. For purposes of Form 990, treat the
organization’s top management official and top financial official as officers.

“On behalf of” issuer

A corporation organized under the general nonprofit corporation law of a state
whose obligations are considered obligations of a state or local governmental
unit. See Rev. Proc. 82-26 for a description of the circumstances under which the
Service will ordinarily issue an advance ruling that the obligations of a nonprofit
corporation were issued on behalf of a state or local governmental unit. See also
Rev. Rul. 63-20, 1963-1 C.B. 24; Rev. Rul. 59-41, 1959-1 C.B. 13; and Rev. Rul.
54-296, 1954-2 C.B. 59. An “on behalf of” issuer also includes any corporation
organized by a state or local governmental unit specifically to issue tax-exempt
bonds to further public purposes. See Rev. Rul. 57-187.

Organization manager

For purposes of section 4958, any officer, director, or trustee of an applicable
tax-exempt organization, or any individual having powers or responsibilities
similar to officers, directors, or trustees of the organization, regardless of title.

Permanent (true) endowment

An endowment fund established by donor-restricted gifts that is maintained to
provide a permanent source of income, with the stipulation that principal must be
invested and kept intact in perpetuity, while only the income generated can be
used by the organization. See SFAS 117.

Political campaign activities

All activities that support or oppose candidates for elective federal, state or local
public office. It does not matter whether the candidate is elected. A candidate is
one who offers himself or is proposed by others for public office. Political
campaign activity does not include any activity to encourage participation in the
electoral process, such as voter registration or voter education, provided that the
activity does not directly or indirectly support or oppose any candidate.

-53-

Page 54 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Political subdivision

A division of any state or local governmental unit which is a municipal
corporation or which has been delegated the right to exercise part of the
sovereign power of the unit. Sovereign power includes the power to make and
enforce laws.

Possession of the United States

Includes the Commonwealth of Puerto Rico, the Commonwealth of the Northern
Mariana Islands, Guam, American Samoa, and the U.S. Virgin Islands.

Principal officer

For purposes of Part II, Signature Block, an officer of the organization who,
regardless of title, has ultimate responsibility for implementing the decisions of the
organization’s governing body, or for supervising the management,
administration, or operation of the organization.

Private business use

For purposes of Schedule K (Form 990), Supplemental Information on
Tax-Exempt Bonds, use by the organization or another 501(c)(3) organization in
an unrelated trade or business. Private business use also generally includes
any use by a nongovernmental person other than a section 501(c)(3) organization
unless otherwise permitted through an exception or safe harbor provided under
the regulations or a revenue procedure.

Private foundation

An organization described in section 501(c)(3) that is not a public charity. Some
private foundations are classified as operating foundations (also known as private
operating foundations) under section 4942(j)(3) or exempt operating foundations
under section 4940(d)(2). A private foundation retains its private foundation status
until such status is terminated under section 507. Thus, a tax-exempt private
foundation becomes a taxable private foundation if its section 501(c)(3) status is
revoked.

Proceeds

For purposes of Schedule K (Form 990), Supplemental Information on
Tax-Exempt Bonds, generally the sale proceeds of an issue (other than those sale
proceeds used to retire bonds of the issue that are not deposited in a reasonably
required reserve or replacement fund). Proceeds also include any investment
proceeds from investments that accrue during the project period (net of rebate
amounts attributable to the project period). See Regulations section 1.141-1(b).

Professional fundraising services

Services performed for the organization requiring the exercise of professional
judgment or discretion consisting of planning, management, preparation of
materials (such as direct mail solicitation packages), provision of advice and
consulting regarding solicitation of contributions, and direct solicitation of
contributions. However, professional fundraising does not include purely
ministerial tasks, such as printing, mailing services, or receiving and depositing
contributions to a charity, such as services provided by a bank or caging service.

Program-related investment

Investments made primarily to accomplish the organization’s exempt purposes
rather than to produce income. Examples of program-related investments include
student loans and notes receivable from other exempt organizations that obtained
the funds to pursue the filing organization’s exempt function.

Public charity

An organization described in section 501(c)(3) and that is excepted from private
foundation status because it is described in section 509(a)(1) (which
cross-references sections 170(b)(1)(A)(i) through (vi)), 509(a)(2), 509(a)(3), or
509(a)(4).

Publicly traded securities

Generally, include common and preferred stocks, bonds (including governmental
obligations such as bonds and Treasury bills), and mutual fund shares listed and
regularly traded in an over-the-counter market or an established exchange and for
which market quotations are published or are otherwise readily available. (See
further explanation in the instructions for Part IX, line 11, and Schedule M (Form
990), Noncash Contributions, line 9).

Pull tabs

Includes games in which an individual places a wager by purchasing preprinted
cards that are covered with pull tabs. Winners are revealed when the individual
pulls back the sealed tabs on the front of the card and compares the patterns
under the tabs with the winning patterns preprinted on the back of the card.
Included in the definition of pull tabs are “instant bingo,” “mini bingo,” and other
similar scratch-off cards. Satellite, internet, and progressive bingo are games
conducted in many different places simultaneously and the winners are not all
present when the wagers are placed, the winners are determined, and the prizes
are distributed. Revenue and expenses associated with satellite, internet, and
progressive bingo should be included under this category.

-54-

Page 55 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Qualified 501(c)(3) bond

A tax-exempt bond, the proceeds of which are used by a section 501(c)(3)
organization in furtherance of its charitable purpose. Requirements generally
applicable to a qualified section 501(c)(3) bond under section 145 include the
following.
1. All property financed by the bond issue is to be owned by a section
501(c)(3) organization or a governmental unit.
2. At least 95% of net proceeds of the bond issue are used either by a
governmental unit or a section 501(c)(3) organization in activities that do not
constitute unrelated trades or businesses (determined by applying section 513).

Qualified conservation contribution

Any contribution of a qualified real property interest to a qualified organization
exclusively for conservation purposes. A “qualified real property interest” means
any of the following interests in real property:
1. The entire interest of the donor,
2. A remainder interest, or
3. A restriction (such as an easement), granted in perpetuity, on the use which
may be made of the real property.
A “conservation purpose” means:
1. The preservation of land areas for outdoor recreation by, or the education
of, the general public;
2. The protection of a relatively natural habitat of fish, wildlife, plants, or similar
ecosystems;
3. The preservation of open space (including farm and forest land) where such
preservation is for the scenic enjoyment of the general public or is in accordance
with governmental conservation policy; or
4. The preservation of an historically important land area or a certified historic
structure.
See section 170(h) for additional information, including special rules with respect
to the conservation purpose requirement for buildings in registered historic
districts. See also conservation easement.

Qualified state or local political organization

A type of political organization that meets the following requirements:

• It limits its exempt function to the selection process relating solely to any state
or local public office or office in a state or local political organization;

• It is required under a state law to report to a state agency (and does report)

information that otherwise would be required to be reported on Form 8872 or it is
required to report under state law (and does report) at least the following
information:
1. The name and address of every person who contributes a total of $500 or
more during the calendar year and the amount of each contribution;
2. The name and address of every person to whom the organization makes
expenditures aggregating $800 or more during the calendar year, and the amount
of each expenditure; and
3. Any additional information specified in section 527(j)(3), if state law requires
the reporting of that information to the state agency.

• The state agency makes the reports filed by the organization publicly available;
• The organization makes the reports filed with the state agency publicly available
in the manner described in section 6104(d); and

• No federal candidate or office holder controls or materially participates in the

direction of the organization, solicits contributions to the organization, or directs
any of the organization’s disbursements.
Quasi-endowment

An endowment fund established by the organization itself, either from
unrestricted donor or organizational funds, over which the organization itself
imposes restrictions on their use, and which restrictions can be temporary or
permanent in nature. These funds are sometimes referred to as board-designated
endowments. See SFAS 117.

Reasonable compensation

The value that would ordinarily be paid for like services by like enterprises under
like circumstances.

Reasonable effort

For purposes of Part VI, lines 1b and 2; Part VII, Section A (compensation from
related organizations); and Schedule L (Form 990 or 990-EZ), Parts III and IV, a
reasonable effort refers to a reasonable amount of effort in information gathering
that the organization is expected to undertake in order to answer the question.
See the specific instructions for Part VI, lines 1b and 2; Part VII, Section A
(compensation from related organizations); and Schedule L (Form 990 or
990-EZ), Parts III and IV, for examples of reasonable efforts.

-55-

Page 56 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Refunding escrow

One or more funds established as part of a single transaction or a series of related
transactions, containing proceeds of a refunding issue and any other amounts
to provide for payment of principal or interest on one or more prior issues. See
Regulations section 1.148-1(b).

Refunding issue

An issue of obligations, the proceeds of which are used to pay principal, interest,
or redemption price on another issue (a prior issue), including the issuance costs,
accrued interest, capitalized interest on the refunding issue, a reserve or
replacement fund, or similar costs, if any, properly allocable to that refunding
issue. A current refunding issue is a refunding issue that is issued not more than
90 days before the last expenditure of any proceeds of the refunding issue for the
payment of principal or interest on the prior issue. An advance refunding issue is a
refunding issue that is not a current refunding issue. See Regulations sections
1.150-1(d)(1), 1.150-1(d)(3), and 1.150-1(d)(4).

Related organization

An organization, including a nonprofit organization, a stock corporation, a
partnership or limited liability company, a trust, and a governmental unit or other
government entity, that stands in one or more of the following relationships to the
filing organization at any time during the tax year.
• Parent: an organization that controls the filing organization.
• Subsidiary: an organization controlled by the filing organization.
• Brother/Sister: an organization controlled by the same person or persons that
control the filing organization.
• Supporting/Supported: an organization that is (or claims to be) at any time
during the organization’s tax year (i) a supporting organization of the filing
organization within the meaning of section 509(a)(3), if the filing organization is a
supported organization within the meaning of section 509(f)(3); (ii) or a
supported organization, if the filing organization is a supporting organization.
The organization must determine its related organizations for purposes of
completing Form 990, Parts VI (Governance), VII (Compensation), VIII (Statement
or Revenue) and X (Balance Sheet), Schedule D (Form 990), Part V, Schedule J
(Form 990), and Schedule R (Form 990). See instructions for those parts and
schedules for related organization reporting requirements.

Religious order

An organization described in Rev. Proc. 91-20.

Reportable compensation

In general, the aggregate compensation that is reported (or required to be
reported, if greater) on Form W-2, box 5 and/or Form 1099-MISC, box 7, for the
calendar year ending with or within the organization’s tax year. If the amount
reported on Form W-2, box 5 is zero, such as for certain clergy and religious
workers not subject to social security and Medicare taxes as employees,
reportable compensation includes the box 1 amount rather than the box 5 amount.
For foreign persons who receive U.S. source income, reportable compensation
includes the amount reportable on Form 1042-S, box 2. For persons for whom
compensation reporting on Form W-2, 1099-MISC, or 1042-S is not required
(such as certain foreign persons, institutional trustees, and persons whose
compensation was below the $600 reporting threshold for Form 1099-MISC),
reportable compensation includes the total value of the compensation paid in the
form of cash or property during the calendar year ending with or within the
organization’s tax year.

Review of financial statement

An examination of an organization’s financial records and practices by an
independent accountant with the objective of assessing whether the financial
statements are plausible, without the extensive testing and external validation
procedures of an audit.

School

An organization, the primary function of which is the presentation of formal
instruction, and which has a regular faculty, curriculum, an enrolled body of
students, and a place where educational activities are regularly conducted.

Security/securities

Any bond, debenture, note, or certificate or other evidence of indebtedness issued
by a corporation, government or political subdivision, share of stock, voting trust
certificate, or any certificate of interest or participation in, certificate of deposit or
receipt for, temporary or interim certificate for, or warrant or right to subscribe to or
purchase, any of the foregoing.

SFAS 116

Statement of Financial Accounting Standards No. 116, Accounting for
Contributions Received and Contributions Made.

SFAS 117

Statement of Financial Accounting Standards No. 117, Financial Statements of
Not-for-Profit Organizations.

Short accounting period

An accounting period of less than 12 months, which exists when an organization
changes its annual accounting period, and which can exist in its initial or final year
of existence (see tax year).

-56-

Page 57 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Short period

See short accounting period.

Significant disposition of net assets

A disposition of net assets, consisting of a sale, exchange, disposition or other
transfer of more than 25% of the fair market value of the organization’s net assets
during the year, regardless of whether the organization received full or adequate
consideration. A significant disposition of net assets involves:
1. One or more dispositions during the organization’s tax year, amounting to
more than 25% of the fair market value of the organization’s net assets as of the
beginning of its tax year; or
2. One of a series of related dispositions or events commenced in a prior year
that, when combined, comprise more than 25% of the fair market value of the
organization’s net assets as of the beginning of the tax year when the first
disposition in the series was made. Whether a significant disposition of net assets
occurred through a series of related dispositions depends on the facts and
circumstances in each case.
Examples of the types of transactions that are “a significant disposition of net
assets” required to be reported on Schedule N (Form 990 or 990-EZ), Liquidation,
Termination, Dissolution or Significant Disposition of Assets, Part II include:
• Taxable or tax-free sales or exchanges of exempt assets for cash or other
consideration (such as a social club described in section 501(c)(7) selling land or
an exempt organization selling assets it had used to further its exempt purposes);
• Sales, contributions or other transfers of assets to establish or maintain a
partnership, joint venture, or a corporation (for-profit or nonprofit) regardless of
whether such sales or transfers are governed by section 721 or section 351,
whether or not the transferor receives an ownership interest in exchange for the
transfer;
• Sales of assets by a partnership or joint venture in which the exempt partner
has an ownership interest;
• Transfers of assets pursuant to a reorganization in which the organization is a
surviving entity; and
• A contraction of net assets resulting from a grant or charitable contribution of
assets to another organization described in section 501(c)(3).

Sponsoring organization

Any organization which is all of the following:

• Described in section 170(c), other than governmental units described in section
170(c)(1) and without regard to section 170(c)(2)(A);

• Not a private foundation as defined in section 509(a); and
• Maintains one or more donor advised funds.
State of legal domicile

For a corporation, the state of incorporation (country of incorporation for a foreign
corporation formed outside the United States). For a trust or other entity, the state
whose law governs the organization’s internal affairs (the foreign country whose
law governs for a foreign organization other than a corporation).

Subordinate organization

One of the organizations, typically local in nature, that is recognized as exempt in
a group exemption letter and subject to the general supervision and control of a
central organization.

Supported organization

A public charity described in section 509(a)(1) or 509(a)(2) supported by a
supporting organization described in section 509(a)(3).

Supporting organization

A public charity described in section 509(a)(3). A supporting organization is
organized and operated exclusively to support one or more supported
organizations. A supporting organization that is operated, supervised, or
controlled by one or more supported organizations is a Type I supporting
organization. The relationship of a Type I supporting organization with its
supported organization(s) is comparable to that of a parent-subsidiary
relationship. A supporting organization supervised or controlled in connection with
one or more supported organizations is a Type II supporting organization. The
relationship of a Type II supporting organization with its supported organization(s)
is comparable to a brother-sister corporate relationship. A supporting organization
that is operated in connection with one or more supported organizations is a Type
III supporting organization. A type III supporting organization is further considered
either functionally integrated with its supported organization(s) or not functionally
integrated with its supported organization(s) (Type III other). Finally, a supporting
organization cannot be controlled directly or indirectly by one or more disqualified
persons (as defined in section 4946), other than foundation managers and other
than one or more public charities described in sections 509(a)(1) or (2).

Tax-exempt bond

An obligation issued by or on behalf of a governmental issuer on which the
interest paid is excluded from the holder’s gross income under section 103. For
this purpose, a bond can be any form of indebtedness under federal tax law,
including a bond, note, loan, or lease-purchase agreement.

-57-

Page 58 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Tax year

The annual accounting period for which the Form 990 is being filed, whether the
calendar year ending December 31st or a fiscal year ending on the last day of any
other month. The organization may have a short tax year in its first year of
existence, in any year when it changes its annual accounting period (for example,
from a December 31 year-end to a June 30 year-end), and in its last year of
existence (for example, when it merges into another organization or dissolves).
See also current year, fiscal year, and short period.

Term endowment

An endowment fund established by donor-restricted gifts and maintained to
provide a source of income for either a specified period of time or until a specific
event occurs. See SFAS 117.

Top management official

A person who has ultimate responsibility for implementing the decisions of the
organization’s governing body or for supervising the management,
administration, or operation of the organization (for example, the organization’s
CEO or executive director).

Top financial official

The person who has ultimate responsibility for managing the organization’s
finances.

Total assets

The amount reported on Form 990, Part X, line 16, column (B).

Trustee

See director or trustee.

United States

Unless otherwise provided, includes the 50 states, the District of Columbia, the
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana
Islands, Guam, American Samoa, and the United States Virgin Islands.

Unrelated business

See unrelated trade or business.

Unrelated business income

Income from an unrelated trade or business as defined in section 513.

Unrelated business gross income

Gross income from an unrelated trade or business as defined in section 513.

Unrelated organization

An organization that is not a related organization with respect to the filing
organization.

Unrelated trade or business

Any trade or business, the conduct of which is not substantially related to the
exercise or performance by the organization of its charitable, educational, or other
purpose or function constituting the basis for its exemption. See Pub. 598 and the
instructions for Form 990-T for a discussion of what is an unrelated trade or
business.

U.S. possession

See possession of the United States.

Volunteer

A person who serves the organization without compensation. “Compensation” for
this purpose includes tips and noncash benefits, except for:
• Reimbursement of expenses under a reimbursement or other expense
allowance arrangement in which there is adequate accounting to the organization,
• Working condition fringe benefits described in section 132,
• Liability insurance coverage for acts performed on behalf of the exempt
organization, and
• De minimis fringe benefits.

Voting member of the governing body

A member of the organization’s governing body with power to vote on all matters
that may come before the governing body (other than a conflict of interest that
disqualifies the member from voting).

Works of art

Include paintings, sculptures, prints, drawings, ceramics, antiques, decorative
arts, textiles, carpets, silver, photography, film, video, installation and multimedia
arts, rare books and manuscripts, historical memorabilia, and other similar
objects. Art does not include collectibles.

Year of formation

The year in which the organization was created or formed under applicable state
law (if a corporation, the year of incorporation).

-58-

Page 59 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

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

Appendix A. Exempt
Organizations Reference
Chart
To determine how the instructions for Form 990 apply to the organization,
an organization must know the Code section under which the organization
is exempt.
Type of Organization
Corporations Organized Under Act of Congress

I.R.C. Section
501(c)(1)

Title Holding Corporations

501(c)(2)

Charitable, Religious, Educational, Scientific, etc., Organizations

501(c)(3)

Civic Leagues and Social Welfare Organizations

501(c)(4)

Labor, Agricultural, and Horticultural Organizations

501(c)(5)

Business Leagues, etc.

501(c)(6)

Social and Recreation Clubs

501(c)(7)

Fraternal Beneficiary and Domestic Fraternal Societies and Associations

501(c)(8) & (c)(10)

Voluntary Employees’ Beneficiary Associations

501(c)(9)

Teachers’ Retirement Fund Associations

501(c)(11)

Benevolent Life Insurance Associations, Mutual Ditch or Irrigation
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 6/25/1959)

501(c)(18)

Organizations of Past or Present Members of the Armed Forces

501(c)(19) & (c)(23)

Black Lung Benefit Trusts

501(c)(21)

Withdrawal Liability Payment Funds

501(c)(22)

Title Holding Corporations or Trusts

501(c)(25)

State-Sponsored Organizations Providing Health Coverage for High-Risk
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

-59-

9:01 -

Page 60 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Appendix B. How to
Determine Whether 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
Gross receipts are the total amounts the
organization received from all sources
during its annual accounting period,
without subtracting any costs or
expenses.
Do not use the definition of gross
receipts described in Appendix C,
CAUTION Special Gross Receipts Tests for
Determining Exempt Status of Section
501(c)(7) and 501(c)(15) Organizations,
to figure gross receipts for this purpose.
Those tests are limited to determining the
exempt status of section 501(c)(7) and
501(c)(15) organizations.
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 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.

!

Figuring Gross Receipts
Figure gross receipts for Form 990 and
990-EZ as follows.
Form 990. Gross receipts are the sum of
lines 6b(i), 6b(ii), 7b(i), 7b(ii), 8b, 9b, 10b,
and 12 (column (A)) of Form 990, Part
VIII.
Form 990-EZ. Gross receipts are the
sum of lines 5b, 6b, 7b, and 9 of Form
990-EZ, Part I.
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 whether an organization’s
gross receipts are normally $25,000 or
less, apply the following test. An
organization’s gross receipts are
considered normally 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 for which the
return would be filed).
If the organization’s gross receipts are
normally $25,000 or less, it must submit
Form 990-N, Electronic Notice
(e-Postcard) for Tax-Exempt
Organizations Not Required to File Form
990 or 990-EZ (with exceptions for certain
organizations described in B.
Organizations Not Required to File Form
990).

$5,000 Gross Receipts
Test
To determine whether an organization’s
gross receipts are normally $5,000 or
less, apply the following test. An
organization’s gross receipts are
considered normally 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 for which the return
would be filed).

Appendix C. Special Gross
Receipts Tests for
Determining Exempt
Status of Section 501(c)(7)
and 501(c)(15)
Organizations
Section 501(c)(7) organizations (social
clubs) and section 501(c)(15)
organizations (insurance companies)
apply the same gross receipts test as
other organizations to determine whether
they must file Form 990 or 990-EZ.
However, section 501(c)(7) and section
501(c)(15) organizations are also subject
to separate gross receipts tests to
determine whether they qualify as
tax-exempt for the tax year. The following
tests use a special definition of gross
receipts for purposes of determining
whether these organizations are exempt
for a particular tax year.
Section 501(c)(7). A section 501(c)(7)
organization can 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)

-60-

can be from public use of a social club’s
facilities.
Gross receipts, for purposes of
determining the tax-exempt status of
section 501(c)(7) organizations, 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 for this purpose 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).
College fraternities or sororities or
other organizations that charge
CAUTION membership initiation fees, but not
annual dues, must include initiation fees
in their gross receipts.

!

Section 501(c)(15). 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). 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 for the year.
See Notice 2006-42, 2006-19 I.R.B. 878.
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.
2. The company’s premiums must be
more than 35% of its gross receipts.
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 990-EZ.
Caution. The alternate test does
not apply if any employee of the
CAUTION mutual 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).

!

Page 61 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Gross receipts. To determine
whether a section 501(c)(15) organization
satisfies either of the above tests
described in Appendix C, 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.
Premiums. Premiums consist of all
amounts received as a result of entering
into an insurance contract. They are
reported on Form 990, Part VIII
(Statement of Revenue), line 2, or on
Form 990-EZ, 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
described in Appendix C.

Appendix D. Public
Inspection of Returns
Some members of the public rely on Form
990, or 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 990-EZ 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 990-EZ.
For other organizations that file Form 990
or 990-EZ, parts of Schedule B can be
open to public inspection. Form 990-T
filed after August 17, 2006, by a section
501(c)(3) organization to report any
unrelated business income, 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; or
• 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
CD-ROMs, call the TE/GE Customer
Account Services toll-free number
(1-877-829-5500) or write to the IRS:

Internal Revenue Service
Mail Stop 6716
Ogden, UT 84201
The IRS cannot disclose portions of an
exemption application relating to any
trade secrets, etc. Additionally, the IRS
generally cannot 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.
Notice 2008-49, 2008-20 I.R.B. 979,
provides interim guidance regarding the
requirement that section 501(c)(3)
organizations and the IRS make available
for public inspection Form 990-T.
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 can be inspected at an IRS
office free of charge. Copies of these
items can 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
organization. Section 527 political
organizations required to file Form 990 or
990-EZ must, in general, make their
Forms 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
organizations, later. Generally, Form
8871 and Form 8872 are available for
inspection and printing at www.irs.gov
under the Charities & Nonprofits tab.
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 Instructions also apply to section
527 political organizations (Rev. Rul.
2003-49, 2003-201 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 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

-61-

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; and
• Provide a copy without charge (for
Form 990-T, this requirement applies only
to Forms 990-T filed after August 17,
2006), 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)(3)(ii).

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.
• An exact copy of Form 990-T if one is
filed by a 501(c)(3) organization.
The copy must include all information
furnished to the IRS on Form 990,
990-EZ, or 990-T 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). However, schedules,
attachments, and supporting documents

Page 62 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

filed with Form 990-T that do not relate to
the imposition of unrelated business
income tax are not required to be made
available for public inspection and
copying. See Notice 2008-49, 2008-20
I.R.B. 979.
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:
• Can have an employee present in the
room during an inspection,

• Must allow the individual conducting
the inspection to take notes freely during
the inspection, and
• 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:
• 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;
• Can 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; and
• Can 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, and

• 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)(iii) and 1(d)(2)(ii)(C).
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.

Time and Manner of Fulfilling Written Requests.
IF the organization...

THEN the organization...

Receives a written request for a copy,

Must mail the copy of the requested documents (or the requested parts)
within 30 days from the date it receives the request.

Mails the copy of the requested document,

Is deemed to have provided the copy on the postmark date or private
delivery mark (if sent by certified or registered mail, the date of
registration or the date of the postmark on the sender’s receipt).

Requires payment in advance,

Is required to provide the copies within 30 days from the date it receives
payment.

Receives a request or payment by mail,

Is deemed to have received it 7 days after the date of the postmark,
absent evidence to the contrary.

Receives a request transmitted by electronic mail or facsimile,

Is deemed to have received it the day the request is transmitted
successfully.

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,

Can 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.

-62-

Page 63 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

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 can charge a reasonable fee
for providing copies. Before the
organization provides the documents, it
can 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
can 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 can 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 can 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 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 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 can 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 can 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 can 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
Request for copies in writing on page 62.
The requester has the option of
requesting from the central or parent
organization, at its principal office,
inspection or copies of group returns filed

-63-

by the central or parent organization. The
central or parent organization must fulfill
such requests in the time and manner
specified in Special Rules Relating to
Public Inspection and Special Rules
Relating to Copies on page 62.
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 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

Page 64 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

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 can
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 can 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 can
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.

Appendix E. Group
Returns—Reporting
Information on Behalf of
the Group
Except where otherwise instructed, where
a line calls for a dollar amount or
numerical data, the central organization
filing the group return must aggregate
the data from all the subordinate
organizations included in the group
return and report the aggregate number.
For example, in answering Form 990,
Part I, line 6, the total number of
volunteers for all of the subordinate
organizations would be reported.
For purposes of Form 990, Part III,
summarize the mission and activities of
all of the subordinate organizations as
if all of the subordinate organizations
were one entity.
In general, if a line requires a Yes/No
answer and the answer is not the same
for all subordinates organizations to
which the line applies, then check “Yes,”
and explain the answer in the schedule’s
supplemental information section (if
applicable) or in Schedule O (Form 990).
For the following lines, however, check
“No” if the answer is “No” for any of the
subordinates to which the line applies,
and explain in Schedule O.
• Form 990, Part V, lines 1c, 2b, 3b, 5c,
6b, 7b, 7g, and 7h.
• Form 990, Part VI, lines 8a, 8b, 10b,
12b, and 12c.
• Form 990, Schedule C (Political
Campaign and Lobbying Activities), Part
I-B, lines 3 and 4a.
• Form 990, Schedule C, Part I-C, line 4.
• Form 990, Schedule C, Part II-A, line
1j.
• Form 990, Schedule C, Part II-B, line
2d.
• Form 990, Schedule C, Part III-A, lines
1-3.
• Form 990, Schedule D (Supplemental
Financial Statements), Part I, lines 5 and
6.
• Form 990, Schedule D, Part II, lines 5
and 8.
• Form 990, Schedule E (Schools), lines
1-4d and 7.
• Form 990, Schedule F (Statement of
Activities Outside the United States), Part
I, line 1.
• Form 990, Schedule G (Supplemental
Information Regarding Fundraising or
Gaming Activities), Part III, line 9a.

-64-

• Form 990, Schedule I (Grants and
Other Assistance to Organizations,
Governments and Individuals in the
United States), Part I, line 1.
• Form 990, Schedule J (Compensation
Information), Part I, lines 1b and 2.
• Form 990, Schedule M (Noncash
Contributions), Part I, line 31.
• Form 990, Schedule N (Liquidation,
Termination, Dissolution or Significant
Disposition of Assets), Part I, lines 3, 5b,
6, and 7b.
The following is a list of other special
instructions for group returns:
1. Header Item B. Terminated. If the
group is terminating its group exemption
and filing its final group return, do not
check the terminated box. Refer to Rev.
Proc. 80-27, 1980-1 C.B. 677, for
procedures for terminating the group
exemption.
2. Header Item D. EIN. Use the
special EIN (separate from the central
organization’s EIN) that is issued solely
for the purposes of the group return. The
central organization must have received a
group exemption letter before it can file a
group ruling.
3. Header Items E, F, J. Enter
information for central organization only.
4. Header Item H. Group returns.
Enter the four-digit group exemption
number (GEN). Also, if not all affiliated
subordinate organizations are included in
the group return, then attach a list (not in
Schedule O) showing the name, address,
and EIN of each affiliated subordinate
organization included in the group return.
5. Header Item K. Form of
organization. Check “other” if the group
has more than one form of organization.
6. Header Item L. Year of formation.
Leave blank for group return.
7. Header Item M. State of legal
domicile. Leave blank for group return.
8. Part IV, lines 14b – 19, 21 – 22, and
29 dollar thresholds. Apply the dollar
thresholds with respect to the aggregate
data for the group as a whole, not
subordinate by subordinate.
9. Part IV, line 20. Hospitals. Answer
“Yes,” if any affiliate included within the
group return operated a hospital facility.
10. Part VI, line 2. Relationships
among officers, directors, trustees,
and key employees. Describe on
Schedule O only relationships between
officers, directors, trustees, and key
employees of the same subordinate
organization, not relationships between
officers, directors, trustees, and key
employees of one subordinate and
officers, directors, trustees, and key
employees of another subordinate.
11. Part VI, line 4. Significant
changes to organizational documents.
Report only changes to standardized
organizational documents maintained by
the central organization that subordinates
are required to adopt.
12. Part VI, line 20. Person who
possesses books and records. Identify
the person who possesses the
information furnished by the subordinate

Page 65 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

organizations used in compiling the group
return.
13. Part VII. Compensation of
officers, directors, trustees, key
employees, and highest compensated
employees. File a single consolidated
Form 990, Part VII showing the officers,
directors, trustees, and key employees of
each subordinate included in the group
return, and a single consolidated
Schedule J (Form 990), Compensation
Information, Part II, for all such officers,
directors, trustees, and key employees
above the compensation thresholds.
Report the five highest compensated
employees and independent contractors
above $100,000 for the whole group of
subordinates, not for each subordinate. If
one or more officers, directors, trustees,
key employees, or highest compensated
employees received compensation from
more than one organization in the group,
the person’s compensation from the
several organizations must be reported in
column (D).
14. Part VII. Compensation from
related organizations. Report
compensation from an organization that is
included in the group ruling but that is not
among the subordinates included in the
group return as compensation from a
related organization in column (E), even if
the related organization is not required to
be reported on Schedule R (Form 990),
Related Organizations and Unrelated
Partnerships.
15. Part XI, lines 2a and 2b.
Compiled, reviewed, or audited
financial statements. Answer “Yes” only
if all the subordinates in the group had
their financial statements compiled,
reviewed, or audited individually (rather
than on a consolidated basis).
16. Schedule A (Form 990 or
990-EZ). Part I. Reason for public
charity status. If the subordinates do not
all have the same public charity status,
then check the public charity status box
for the largest number of subordinates in
the group, and explain on Schedule A
(Form 990 or 990-EZ), Public Charity
Status and Public Support, Part IV.
However, if any section 509(a)(3)
organizations are among the
subordinates in the group return, also
answer lines 11e through 11h.
17. Schedule A (Form 990 or
990-EZ). Parts II and III. Support
schedules. Report aggregate data for all
subordinates with the public charity status
corresponding to Parts II or III.
18. Schedule B (Form 990, 990-EZ or
990-PF). Contributors. Report a
consolidated Schedule B (Form 990,
990-EZ, or 990-PF) for all subordinates
included in the group return. Apply the
dollar and percentage thresholds
(including the greater of $5,000 or 2%
threshold for section 501(c)(3)
organizations described in sections
509(a)(1) and 170(b)(1)(A)(vi))
subordinate by subordinate, not on a
group basis.
19. Schedule C (Form 990 or
990-EZ). Part II-A. Lobbying

expenditures and affiliated groups.
Complete Part II-A, column (b) for the
group as a whole. In column (a), except
on lines 1g and 1h, include the amounts
that apply to all electing members of the
group if they are included in the group
return. If the group return includes
organizations that belong to more than
one affiliated group, enter in column (b)
the totals for all such groups.
20. Schedule D (Form 990). Part X.
Other liabilities. The filing organization
can summarize that portion, if any, of the
FIN 48 footnote that applies to the liability
of multiple organizations including the
organization (for example, as a member
of a group with consolidated financial
statements), to describe the filing
organization’s share of the liability.
21. Schedule H (Form 990).
Hospitals. Complete one Schedule H for
all of the hospitals operated by
subordinates in the group, and report
aggregate data from all such hospitals.
22. Schedule J (Form 990).
Compensation from related
organizations. See the Appendix E, Part
VII instructions, earlier.
23. Schedule N (Form 990 or
990-EZ). Liquidation or significant
disposition of assets. Explain in
Schedule N (Form 990 or 990-EZ), Part
III, which of the subordinates have
undergone a liquidation, termination,
dissolution, or significant disposition of
assets during the tax year.
24. Schedule R (Form 990). Related
organizations. See the instructions for
Schedule R (Form 990) regarding
determining when related organizations of
a member of a group exemption must be
included on Schedule R (Form 990). In
general, central organizations and
subordinate organizations of a group
exemption are not required to be listed
as related organizations on Schedule R
(Form 990), Part II; and all other related
organizations of the central organization
or of a subordinate organization are
required to be listed on Schedule R (Form
990) in the applicable part. Even if a
related organization is not required to be
listed in Part II of Schedule R (Form 990),
however, as described in the instructions
for Schedule R (Form 990), Part V, the
organization can be required to report
certain transactions with the related
organization in Part V.

Appendix F. Disregarded
Entities and Joint
Ventures—Inclusion of
Activities and Items
Disregarded Entities
A disregarded entity, as described in
Regulations sections 301.7701-1 through
301.7701-3, is generally treated as a
branch or 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

-65-

information, except on Form 990, Part VI,
lines 10a and 10b and in Schedule R
(Form 990), in which disregarded entities
must be separately reported.
An organization must report in its Form
990, including Parts VIII through X, all of
the revenues, expenses, assets,
liabilities, and net assets or funds of a
disregarded entity of which it is the sole
member. The organization also must
report the activities of a disregarded entity
in the appropriate parts (including
Schedules) of the Form 990. For
example, support of a disregarded entity
must be taken into account by the filing
organization for purposes of the public
support tests set forth on Schedule A
(Form 990 or 990-EZ). Similarly, political
campaign activity or lobbying activity
conducted by a disregarded entity of
which the organization is the sole
member must be reported on Schedule C
(Form 990 or 990-EZ), Political Campaign
and Lobbying Activities.
The following is a list of special
instructions for the Form and Schedules
regarding the reporting of a disregarded
entity of which the organization is the sole
member. These items are described to
illustrate special applications of the rule
described above that a disregarded
entity’s activities and items must be
reported on the organization’s Form 990
and applicable schedules.
1. Part I, line 5. Number of
employees. See instruction for Part V,
lines 1 and 2 below.
2. Part I, line 6. Number of
volunteers. The total number of
volunteers to be reported can, but is not
required to, include volunteers of any
disregarded entity.
3. Part III. Program service
accomplishments. Consider activities
and accomplishments of all disregarded
entities when answering this part.
4. Part IV, line 12. Audited financial
statement. The organization should not
answer “Yes,” to this question merely
because it received an audited statement
of one or more disregarded entities, if the
statement of the filing organization was
not audited.
5. Part IV, lines 31 – 32. Liquidation
or significant disposition of assets.
See the Appendix F instructions for
Schedule N (Form 990 or 990-EZ) on
page 67.
6. Part IV, lines 35 – 36.
Transactions with related
organizations. See Appendix F
instructions for Schedule R (Form 990) on
page 67.
7. Part V, lines 1 – 2. Forms 1096
and W-3. The total number of information
returns and employees to be reported,
and compliance with backup withholding
rules, includes all backup withholding,
information returns and employees of any
disregarded entity, regardless of whether
the disregarded entity has a separate EIN
for employment tax and information
reporting purposes.
8. Part V, line 7. Organizations that
can receive deductible contributions.

Page 66 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

For purposes of Form 990 reporting, lines
7a through 7h are to be answered by
taking into account any contributions
made to a disregarded entity.
9. Part VI, lines 1 – 11. Members of
the governing body, officers, directors,
trustees, and employees of a disregarded
entity will not be treated as governing
body members, officers, directors, or
trustees of the filing organization, but
such persons can constitute a key
employee or highest compensated
employee of the filing organization by
virtue of compensation paid by the
disregarded entity, or the person’s
responsibilities and authority over
operations of the disregarded entity when
compared to the filing organization as a
whole. See the instructions for Form 990,
Part VII, Section A, Disregarded entities,
on page 24.
10. Part VI, Section B, lines 12 – 16.
Policies. The organization should check
“Yes,” or “No,” based on the filing
organization’s policies, but for each “Yes”
response they must report on Schedule O
(Form 990) whether the policy applies to
all of the organization’s disregarded
entities (if any).
11. Part VII, line 1a. Definitions of
key employee and highest
compensated employee. An officer,
director, trustee, and employee of a
disregarded entity can constitute a key
employee or highest compensated
employee of the filing organization by
virtue of compensation paid by the
disregarded entity, or the person’s
responsibilities and authority over
operations of the disregarded entity when
compared to the filing organization as a
whole. See the instructions for Form 990,
Part VII, Section A.
12. Part XI, line 3. OMB and Single
Audit Act audits. The organization must
check “Yes” if a disregarded entity was
required to undergo an audit or audits.
13. Schedule L (Form 990 or 990-EZ).
Transactions with interested persons.
Reportable transactions include
transactions involving interested persons
who have such status because of their
relationship with a disregarded entity
(such as an employee of the disregarded
entity who qualifies as a key employee of
the organization as a whole). A
transaction between an interested person
and a disregarded entity of the
organization is reportable on Schedule L.
14. Schedule N (Form 990 or
990-EZ). Liquidation or significant
disposition of assets. The organization
should not prepare Part I to report a
termination, liquidation, or dissolution of a
disregarded entity if the filing organization
continues to operate. Transfers to (or by)
a filing organization by (or to) its
disregarded entity are not to be reported
in Part II, but transfers by or contractions
of a disregarded entity are to be taken
into account to determine whether a
reportable event (based on 25% of the
filing organization’s net assets, including
those of its disregarded entities) has
occurred.

15. Schedule R (Form 990), Part V,
line 2. Transactions with related
organizations. Specified payments to a
disregarded entity by a controlled entity of
the filing organization, and transfers by a
disregarded entity to an exempt non
charitable entity, are to be reported on
Schedule R (Form 990), Part V, line 2.

Joint Ventures Treated as
a Partnership for Federal
Income Tax Purposes
If the organization participates as a
partner or member of a joint venture,
partnership, LLC, or other entity treated
as a partnership for federal tax purposes
(referred to here as a “joint venture”), as
described in Regulations sections
301.7701-1 through 301.7701-3, then the
organization in general must report the
activities of the joint venture as its own
activities, to the extent of the
organization’s proportionate interest in the
joint venture. For example, a
proportionate share of the political
campaign activity or lobbying activity
conducted by a joint venture of which the
organization is a member must be
reported on Schedule C (Form 990 or
990-EZ), Political Campaign and
Lobbying Activities. If the joint venture is a
member of a second joint venture, which
is a member of a third joint venture, etc.,
the activities similarly pass through all
joint ventures to the organization, in
accordance with the organization’s
proportionate share in each of the joint
ventures.
The following is a list of special
instructions for the Form and Schedules
regarding the reporting of a joint venture
of which the organization is a member.
1. Part I, line 2. Disposition of 25%
of assets. See instructions for Schedule
N on page 67.
2. Part I, line 7. Unrelated business
income. Include the organization’s share
(whether or not distributed) of income or
loss of the joint venture that is unrelated
business income in determining the
organization’s gross and net unrelated
business income.
3. Part IV, lines 3 – 5. Political
campaign and lobbying activities. See
instructions for Schedule C on this page.
4. Part IV, line 7. Conservation
easements. See instructions for
Schedule D on this page.
5. Part IV, lines 14 – 16. Activities
outside the United States. See
instructions for Schedule F on this page.
6. Part IV, lines 17 – 19. Fundraising
and gaming. See instructions for
Schedule G, below.
7. Part IV, line 20. Hospitals. See
instructions for Schedule H on this page.
8. Part IV, lines 21 – 22. Grants in
the United States. See instructions for
Schedule I on this page.
9. Part IV, lines 26 – 28. Loans,
grants, and business transactions
involving interested persons. See
instructions for Schedule L on page 67.

-66-

10. Part IV, line 32. Disposition of
25% of assets. See instructions for
Schedule N on page 67.
11. Part IV, lines 34 – 37. Related
organizations and unrelated
partnerships. See instructions for
Schedule R on page 67.
12. Part V, line 3a. Unrelated
business income. Include the
organization’s share (whether or not
distributed) of income or loss of the joint
venture that is unrelated business income
in determining the organization’s gross
unrelated business income.
13. Part VI. Governance,
management, and disclosure. Do not
take into account a joint venture for
purposes of Part VI (except for lines 16a
and 16b).
14. Part VII. Compensation. See
instructions for Schedule J, below.
15. Parts VIII, IX, and X. Financial
statements. Report in accordance with
the organization’s books and records.
16. Part XI. Financial statements and
reporting. Disregard a joint venture.
17. Schedule C (Form 990 or
990-EZ). Political campaign and
lobbying activities. Report the
organization’s share of political campaign
or lobbying activities conducted by a joint
venture.
18. Schedule D (Form 990), Part II.
Conservation easements. Include
conservation easements held by a joint
venture formed for the purpose of holding
such easements.
19. Schedule F (Form 990). Activities
outside the United States. Include
activities of a joint venture, including
grants to organizations or individuals
outside the United States.
20. Schedule G (Form 990 or
990-EZ). Fundraising and gaming.
Include activities of a joint venture and the
organization’s share of revenues and
expenses. On Part III, line 12, check
“Yes” if the joint venture was formed to
administer charitable gaming.
21. Schedule H (Form 990).
Hospitals. See the instructions for
Schedule H to determine how to report an
organization’s share of a joint venture’s
activities and items for purposes of that
schedule.
22. Schedule I (Form 990). Grants in
the United States. Include grants from a
joint venture to organizations,
governments, or individuals in the United
States.
23. Schedule J (Form 990).
Compensation. If an officer, director,
trustee, or employee of the organization
receives compensation from a joint
venture, the compensation is not treated
as paid pro rata by the organization. The
compensation may need to be reported,
however, as compensation from a related
organization if the joint venture is a
related organization.
24. Schedule K (Form 990), Part III,
line 1. Private business use. Report
certain joint ventures that owned property
financed by tax-exempt bonds.

Page 67 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

25. Schedule L (Form 990 or 990-EZ),
Parts II – IV. Loans, grants, and
business transactions involving
interested persons. Report loans and
grants made to an interested person by a
joint venture. Also report certain joint
ventures with interested persons.
26. Schedule N (Form 990 or
990-EZ), Part II. Disposition of 25% of
assets. In determining whether the
organization made a disposition of more
than 25% of its assets, take into account
its share of dispositions by a joint venture.
27. Schedule R (Form 990). Related
organizations. Report relationships with
certain joint ventures in Parts III and VI,
and certain transactions with joint
ventures in Part V.

Appendix G. Section 4958
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 can
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 $20,000 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), and
• 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
independent 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 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.
The following persons are considered
disqualified persons with respect to the
following organizations, along with certain
family members and 35% controlled
entities associated with them:
• With respect to a transaction involving
a donor advised fund, a donor or donor
advisor of that donor advised fund,
• With respect to a donor advised fund
sponsoring organization, an investment
advisor of the sponsoring organization,
and
• With respect to a supported
organization of a section 509(a)(3)
supporting organization, the disqualified
persons of the section 509(a)(3)
supporting organization.
Substantial contributors to supporting
organizations are also 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 2007;
$105,000 in 2008, $110,000 in 2009) 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;

-67-

• 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 can 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 the
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 more
than one organizations in the same
transaction.

Page 68 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Excess Benefit
Transaction
An excess benefit transaction generally
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
applicable tax-exempt organization
exceeds the value of the consideration
(including the performance of services)
received for providing such benefit, but
see the special rules below for donor
advised funds and supporting
organizations. 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. 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,
• 35% controlled entity of a donor or
donor advisor, or
• 35% controlled entity of a family
member of a donor or donor advisor.
For these transactions, the excess
benefit is defined as the amount of the
grant, loan, compensation, or similar
payment. For additional information, see
the Instructions for Form 4720.
Supporting organizations. 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,
• 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)).

A substantial contributor is any person
who contributed or bequeathed an
aggregate of more than $5,000 to the
organization, if that amount is more than
2% of the total contributions and bequests
received by the organization before the
end of the tax year of the organization in
which the contribution or bequest is
received by the organization from such
person. A substantial contributor includes
the grantor of a trust.
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? For federal
income tax purposes, an excess benefit
transaction occurs on the date the
disqualified person receives the economic
benefit from the organization . 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 the general rules 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. The special rules
relevant to transactions with donor
advised funds and supporting
organizations apply to transactions
occurring after August 17, 2006.

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 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

-68-

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? on page 69). 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; and
• 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

Page 69 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

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 volunteers. 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 can, 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 can be
terminated or canceled 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 date of the
material change. Treatment as a new
contract can 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

-69-

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 can
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 can refute the
presumption of reasonableness only if it
develops sufficient 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 can 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 on this
page. 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.

Page 70 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

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 can 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 can 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
cannot exceed $20,000 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 can 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

Revenue Sharing
Transactions

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 can 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 can be held in a donor
advised fund.
Property. With the agreement of the
applicable tax-exempt organization, a
disqualified person can make a payment
by 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 can make a cash
payment to the disqualified person equal
to the difference.

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 IRS 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.

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.

-70-

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 factors will be considered
(among other facts and circumstances) in
determining whether to revoke an
applicable tax-exempt organization’s
exemption status where an excess
benefit transaction has occurred:
• The size and scope of the
organization’s regular and ongoing
activities that further exempt purposes
before and after the excess benefit
transaction or transactions occurred;
• The size and scope of the excess
benefit transaction or transactions
(collectively, if more than one) in relation
to the size and scope of the
organization’s regular and ongoing
activities that further exempt purposes;
• Whether the organization has been
involved in multiple excess benefit
transactions with one or more persons;
• Whether the organization has
implemented safeguards that are
reasonably calculated to prevent excess
benefit transactions; and
• Whether the excess benefit transaction
has been corrected, or the organization
has made good faith efforts to seek
correction from the disqualified person(s)
who benefited from the excess benefit
transaction.

Page 71 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Appendix H. Forms and
Publications To File or Use
How To Get 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.
DVD for tax products. You can
order Publication 1796, IRS Tax
Products DVD, and obtain:
• Current-year forms, instructions, and
publications.
• Prior-year forms, instructions, and
publications.
• Tax Map: an electronic research tool
and finding aid.
• Tax law frequently asked questions.
• Tax Topics from the IRS telephone
response system.
• Internal Revenue Code — Title 26 of the
U.S. Code.
• Fill-in, print, and save features for most
tax forms.
• Internal Revenue Bulletins.
• Toll-free and email technical support.
• Two releases during the year.
– The first release will ship the
beginning of January 2010.
– The final release will ship the
beginning of March 2010.
Purchase the DVD from National
Technical Information Service (NTIS) at
www.irs.gov/cdorders for $30 (no
handling fee) or call 1-877-233-6767 toll
free to buy the DVD for $30 (plus a $6
handling fee).

Other Forms That May Be
Required
Schedule A (Form 990 or 990-EZ).
Public Charity Status and Public Support.
Schedule B (Form 990, 990-EZ, or
990-PF). Schedule of Contributors.
Schedule C (Form 990 or 990-EZ).
Political Campaign and Lobbying
Activities.
Schedule D (Form 990). Supplemental
Financial Statements.
Schedule E (Form 990 or 990-EZ).
Schools.
Schedule F (Form 990). Statement of
Activities Outside the United States.
Schedule G (Form 990 or 990-EZ).
Supplemental Information Regarding
Fundraising or Gaming Activities.
Schedule H (Form 990). Hospitals.
Schedule I (Form 990). Grants and
Other Assistance to Organizations,
Governments, and Individuals in the
United States.

Schedule J (Form 990). Compensation
Information.
Schedule K (Form 990). Supplemental
Information on Tax-Exempt Bonds.
Schedule L (Form 990 or 990-EZ).
Transactions With Interested Persons.
Schedule M (Form 990). Noncash
Contributions.
Schedule N (Form 990 or 990-EZ).
Liquidation, Termination, Dissolution, or
Significant Disposition of Assets.
Schedule O (Form 990). Supplemental
Information to Form 990.
Schedule R (Form 990). Related
Organizations and Unrelated
Partnerships.
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 926. Return by a U.S. Transferor
of Property to a Foreign Corporation.
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, the trust fund recovery penalty
can apply. The trust fund recovery penalty
can 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. 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 Part V, line 3 and its
instructions; for Form 990-EZ, see Part V,
line 35 and its instructions.

-71-

Form 990-W. Estimated Tax on
Unrelated Business Taxable Income for
Tax-Exempt Organizations.
Form 1023. Application for Recognition
of Exemption Under Section 501(c)(3) of
the Internal Revenue Code.
Form 1024. Application for Recognition
of Exemption Under Section 501(a).
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 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 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 990-EZ, and do not file Form 1041.
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,
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 2848. Power of Attorney and
Declaration of Representative.
Form 3115. Application for Change in
Accounting Method.
Form 3520. Annual Return To Report
Transactions With Foreign Trusts and
Receipt of Certain Foreign Gifts.
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.

Page 72 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Form 5471. Information Return of U.S.
Persons With Respect To Certain Foreign
Corporations.
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 5578. Annual Certification of
Racial Nondiscrimination for a Private
School Exempt From Federal income
Tax.
Form 5768. Election/Revocation of
Election by an Eligible Section 501(c)(3)
Organization To Make Expenditures To
Influence Legislation.
Form 7004. Application for Automatic
Extension of Time To File Certain
Business Income Tax, Information, and
Other Returns.
Form 8038 series. Tax Exempt Bonds.
Form 8274. Certification by Churches
and Qualified Church-Controlled
Organizations Electing Exemption from
Employer Social Security and Medicare
Taxes.
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 the 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 8328. Carryforward Election of
Unused Private Activity Bond Volume
Cap.
Form 8718. User Fee for Exempt
Organization Determination Letter
Request.
Form 8821. Tax Information
Authorization.
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.
Form 8871. Political Organization Notice
of Section 527 Status.
Form 8872. Political Organization
Report of Contributions and Expenditures.
Form 8886. Reportable Transaction
Disclosure Statement.
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. Applicable Insurance
Contracts Information Return.
Form SS-4. Application for Employer
Identification Number.
Form TD F 90-22.1. Report of Foreign
Bank and Financial Accounts.

Helpful Publications
Pub. 15. (Circular E), Employer’s Tax
Guide.
Pub. 15-A. Employer’s Supplemental
Tax Guide (Fringe Benefits).
Pub. 463. Travel, Entertainment, Gift,
and Car Expenses.
Pub. 525. Taxable and Nontaxable
Income.
Pub. 526. Charitable Contributions.
Pub. 538. Accounting Periods and
Methods.
Pub. 557. Tax-Exempt Status for Your
Organization.
Pub. 561. Determining the Value of
Donated Property.
Pub. 598. Tax on Unrelated Business
Income of Exempt Organizations.
Pub. 892. Exempt Organization Appeal
Procedures for Unagreed Issues.
Pub. 910. IRS Guide to Free Tax
Services.
Pub. 946. How To Depreciate Property.
Pub. 1771. Charitable
Contributions — Substantiation and
Disclosure Requirements.
Pub. 1828. Tax Guide for Churches and
Religious Organizations.
Pub. 3079. Gaming Publication for
Tax-Exempt Organizations.
Pub. 3386. Tax Guide for Veterans
Organizations.
Pub. 3833. Disaster Relief, Providing
Assistance Through Charitable
Organizations.
Pub. 4220. Applying for 501(c)(3)
Tax-Exempt Status.

-72-

Pub. 4221-PC. Compliance Guide for
501(c)(3) Public Charities.
Pub. 4221-PF. Compliance Guide for
501(c)(3) Private Foundations.
Pub. 4302. A Charity’s Guide to Vehicle
Donations.
Pub. 4303. A Donor’s Guide to Vehicle
Donations.
Pub. 4630. Exempt Organizations
Products and Services Navigator.

Appendix I. Use of Form
990 or 990-EZ To Satisfy
State Reporting
Requirements
Some states and local government units
will accept a copy of Form 990 or 990-EZ
in place of all or part of their own financial
report forms. The substitution applies
primarily to section 501(c)(3)
organizations, but some other types of
section 501(c) organizations are also
affected. If the organization uses Form
990 or 990-EZ to satisfy state or local
filing requirements, such as those under
state charitable solicitation acts, note the
following discussions.
Determine state filing requirement.
The organization can 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 can include any of the
following:
• Soliciting contributions or grants by
mail or otherwise from individuals,
businesses, or other charitable
organizations;
• Conducting programs;
• Having employees within that
jurisdiction;
• Maintaining a checking account; or
• Owning or renting property there.
Monetary tests can differ. Some or all
of the dollar limitations applicable to Form
990 or 990-EZ when filed with the IRS
may not apply when using Form 990 or
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 normally $25,000
gross receipts minimum that creates an
obligation to file with the IRS and the
$100,000 minimum for listing independent
contractors on Form 990, Part VII,
Section B.
Additional information may be
required. State or local filing
requirements can require the organization
to attach to Form 990 or 990-EZ one or
more of the following:
• Additional financial statements, such as
a complete analysis of functional
expenses or a statement of changes in
net assets;
• Notes to financial statements;
• Additional financial schedules;
• A report on the financial statements by
an independent accountant; and
• Answers to additional questions and
other information.

Page 73 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Each jurisdiction can require the
additional material to be presented on
forms they provide. The additional
information should not be submitted with
the Form 990 or 990-EZ filed with the
IRS, unless included in Schedule O (Form
990).
Even if the Form 990 or 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 (1) required information is
not provided, including any of the
additional information discussed on page
72, or (2) the state determines that the
form was not completed by following the
applicable Form 990 or 990-EZ
instructions or supplemental state
instructions. In such case, the state may
ask the organization 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, similar amounts, 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 on this page,
many states and the IRS do not permit
the inclusion of those amounts in Parts
VIII and IX 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 990-EZ.
Amended returns. If the organization
submits supplemental information or files
an amended Form 990 or 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 990-EZ originally to meet that
state’s filing requirement. If a state
requires the organization to file an
amended Form 990 or 990-EZ to correct
conflicts with the Form 990 or 990-EZ
instructions, the organization 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
D.

-73-

Time for filing can differ. The deadline
for filing Form 990 or 990-EZ with the IRS
differs from the time for filing reports with
some states.
Public inspection. The Form 990 or
990-EZ information made available for
public inspection by the IRS can differ
from that made available by the states,
such as Schedule B (Form 990, 990-EZ,
or 990-PF).

Appendix J. Business
Activity Codes
The codes listed on page 74 are a
selection from the North American
Industry Classification System (NAICS)
that should be used in completing Form
990, Part VIII, lines 2 and 11. If you do
not see a code for the activity you are
trying to categorize, select the appropriate
code from the NAICS website at http://
www.census.gov/eos/www/naics/. Select
the most specific 6-digit code available
that describes the activity producing the
income being reported. Note that most
codes describe more than one type of
activity. Avoid using codes that describe
the organization rather than the
income-producing activity.

Page 74 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

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

Business Activity Codes
AGRICULTURE, FORESTRY, HUNTING,
AND FISHING
Code
110000 Agriculture, forestry, hunting, and fishing
111000 Crop production

MINING
Code
211110 Oil and gas extraction
212000 Mining (except oil and gas)

UTILITIES
Code
221000 Utilities

CONSTRUCTION
Code
230000 Construction
236000 Construction of buildings

MANUFACTURING
Code
310000 Manufacturing
323100 Printing and related support activities
339110 Medical equipment and supplies manufacturing

WHOLESALE TRADE
Code
423000 Merchant wholesalers, durable goods
424000 Merchant wholesalers, nondurable goods

RETAIL TRADE
Code
441100
442000
443120
444100
445100
445200
446110
446199
448000
451110
451211
452000
453000
453220
453310
454110

Automobile dealers
Furniture and home furnishings stores
Computer and software stores
Building materials and supplies dealers
Grocery stores
Specialty food stores
Pharmacies and drug stores
All other health and personal care stores
Clothing and clothing accessories stores
Sporting goods stores
Book stores
General merchandise stores
Miscellaneous store retailers
Gift, novelty, and souvenir stores
Used merchandise stores
Electronic shopping and mail-order houses

TRANSPORTATION AND WAREHOUSING
Code
480000 Transportation
485000 Transit and ground passenger transportation
493000 Warehousing and storage

INFORMATION
Code
511110
511120
511130
511140
511190
512000
515100
517000

519130

Newspaper publishers (except Internet)
Periodical publishers (except Internet)
Book publishers (except Internet)
Directory and mailing list publishers (except
Internet)
Other publishers (except Internet)
Motion picture and sound recording industries
Radio and television broadcasting (except
Internet)
Telecommunications (including paging, cellular,
satellite, cable, other telecommunications,
and internet service providers)
Internet Publishing and Broadcasting

DATA PROCESSING SERVICES
Code
518210 Data Processing, Hosting, and Related Services
519100 Other information services (including news
syndicates and libraries, Internet publishing and
broadcasting)

EDUCATIONAL SERVICES

FINANCE AND INSURANCE
Code
522100 Depository credit intermediation (including
commercial banking, savings institutions, and
credit unions)
522200 Nondepository credit intermediation (including
credit card issuing and sales financing)
522210 Credit card issuing
522220 Sales financing
522291 Consumer lending
522292 Real estate credit
522299 Other nondepository credit intermediation
523000 Securities, commodity contracts, and other
financial investments and related activities
523920 Portfolio management
523930 Investment advice
524113 Direct life insurance carriers
524114 Direct health and medical insurance carriers
524126 Direct property and casualty insurance carriers
524292 Third-party administration of insurance and
pension funds
524298 All other insurance-related activities
525100 Insurance and employee benefit funds
525920 Trusts, estates, and agency accounts
525990 Other financial vehicles (including mortgage REITs)

Code
611420 Computer training
611430 Professional and management development training
611600 Other schools and instruction (other than
elementary and secondary schools or colleges
and universities, which should select a code to
describe their activities)
611710 Educational support services

REAL ESTATE AND RENTAL AND LEASING

624210

Code
531110 Lessors of residential buildings and dwellings
(including equity REITs)
531120 Lessors of nonresidential buildings (except
miniwarehouses) (including equity REITs)
531190 Lessors of other real estate property (including
equity REITs)
531310 Real estate property managers
531390 Other activities related to real estate
532000 Rental and leasing services
532420 Office machinery and equipment rental and
leasing
533110 Lessors of nonfinancial intangible assets
(except copyrighted works)

PROFESSIONAL, SCIENTIFIC, AND
TECHNICAL SERVICES
Code
541100 Legal services
541200 Accounting, tax preparation, bookkeeping, and
payroll services
541300 Architectural, engineering, and related services
541380 Testing laboratories
541511 Custom computer programming services
541519 Other computer-related services
541610 Management consulting services
541700 Scientific research and development services
541800 Advertising and related services
541860 Direct mail advertising
541900 Other professional, scientific, and technical
services
541990 Consumer credit counseling services

MANAGEMENT OF COMPANIES AND
ENTERPRISES
Code
551111 Offices of bank holding companies
551112 Offices of other holding companies

ADMINISTRATIVE AND SUPPORT AND
WASTE MANAGEMENT AND
REMEDIATION SERVICES
Administrative and Support Services
Code
561000
561300
561439
561499
561500
561520
561700

Administrative and support services
Employment services
Other business service centers (including copy shops)
All other business support services
Travel arrangement and reservation services
Tour operators
Services to buildings and dwellings

Waste Management and Remediation Services
Code
562000 Waste management and remediation services
(sanitary services)

-74-

HEALTHCARE AND SOCIAL ASSISTANCE
Code
621110
621300
621400
621500
621610
621910
621990
623000
623990
624100
624110
624200

624310
624410

Offices of physicians
Offices of other health practitioners
Outpatient care centers
Medical and diagnostic laboratories
Home health care services
Ambulance services
All other ambulatory health care services
Nursing and residential care facilities
Other residential care facilities
Individual and family services
Community centers (except rec. only), youth
Adoption agencies
Community food and housing, and emergency
and other relief services
Meal delivery programs
Soup kitchens
Food banks
Vocational rehabilitation services
Child day care services

ARTS, ENTERTAINMENT, AND
RECREATION
Code
711110
711120
711130
711190
711210
711300
713110
713200
713910
713940
713990

Theater companies and dinner theaters
Dance companies
Musical groups and artists
Other performing art companies
Spectator sports (including sports clubs
and racetracks)
Promoters of performing arts, sports, and
simiilar events
Amusement and theme parks
Gambling industries
Golf courses and country clubs
Fitness and recreational sports centers
All other amusement and recreation industries
(including skiing facilities, marinas, and bowling
centers)

ACCOMMODATION AND FOOD SERVICES
Code
721000 Accomodation
721110 Hotels (except casino hotels) and motels
721210 RV (recreational vehicle) parks and recreational
camps
721310 Rooming and boarding houses
722100 Full-service restaurants
722210 Limited-service eating places
722320 Caterers
722410 Drinking places (alcoholic beverages)

OTHER SERVICES
Code
811000
812300
812900
812930

Repair and maintenance
Drycleaning and laundry services
Other personal services
Parking lots and garages

OTHER
Code
900001 Investment activities of section 501(c)(7), (9), or
(17) organizations
900002 Rental of personal property
900003 Passive income activities with controlled
organizations
900004 Exploited exempt activities
900099 Other activity

9:01 -

Page 75 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Index

$10,000 – per-item exception . . . . . . . . . . . . . . 23
$10,000 – per-related organization
exception . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
35% controlled entity . . . . . . . . . . . . . . . . . . . . . 15
A
Accountable plan . . . . . . . . . . . . . . . . . . . . . . . . . 17
Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Accounting fees . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Accounting method . . . . . . . . . . . . . . . . . . . . . . . 41
Accounting period . . . . . . . . . . . . . . . . . . . . . . . 6, 9
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 40
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . 39
Accrual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Activities outside the United States . . . . . . . . 71
Address:
Change in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Advance ruling period . . . . . . . . . . . . . . . . . . . . . . 6
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Affiliate/affiliates . . . . . . . . . . . . . . . . . . . . . . . 38, 66
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
State or national organizations . . . . . . . . . . 38
Affiliated organizations . . . . . . . . . . . . . . . . . . . . 67
Allocations:
Grants, and . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Alternate test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Amended Return . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Description of amendment . . . . . . . . . . . . . . . 7
Name change amendment . . . . . . . . . . . . . . . 7
Annual information return . . . . . . . . . . . . . . . . . 61
Anti-abuse rule . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Appendix:
Appendix A, Exempt Organizations
Reference Chart . . . . . . . . . . . . . . . . . . . . . 59
Appendix B, How to Determine Whether an
Organization’s Gross Receipts Are
Normally $25,000 (or $5,000) or
Less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Appendix C, Special Gross Receipts Tests
for Determining Exempt Status of Section
501(c)(7) and 501(c)(15)
Organizations . . . . . . . . . . . . . . . . . . . . . . . . 60
Appendix D, Public Inspection of
Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Appendix E, Group Returns — Reporting
Information on Behalf of the Group . . . . 64
Appendix F, Disregarded Entities and Joint
Ventures — Inclusion of Activities and
Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Appendix G, Section 4958 Excess Benefit
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 67
Appendix H, Forms and Publications to File
or Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Appendix I, Use of Form 990 or 990-EZ To
Satisfy State Reporting
Requirements . . . . . . . . . . . . . . . . . . . . . . . . 72
Appendix J, Business Activity Codes . . . . 73
Applicable tax-exempt organization . . . . . . . . 67
Application for recognition of exemption . . . . 71
Application pending . . . . . . . . . . . . . . . . . . . . . . . . 9
Art . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Articles of incorporation . . . . . . . . . . . . . . . . . . . 18
Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Asset(s):
Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Assistance to individuals . . . . . . . . . . . . . . . . . . 36
Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66, 73
Audit committee . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Audit guides . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Audited financial statement . . . . . . . . . . . . . . . . 12
B
Backup withholding . . . . . . . . . . . . . . . . . . . . . . . 14
Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Bank account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Bank or financial institution trustee
Exception . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Members . . . . . . . . . . . . . . . . . . . . . . . . . . . 36, 69
Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Bingo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Black lung benefit trust . . . . . . . . . . . . . . . . . . . . . 6
Bond issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Bonds, tax-exempt . . . . . . . . . . . . . . . . . . . . . . . 40
Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Books and records . . . . . . . . . . . . . . . . . . . . . . . . 6
Books of account . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Business activities . . . . . . . . . . . . . . . . . . . . . . . . 32
Business code . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Business leagues . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business relationship . . . . . . . . . . . . . . . . . . . . . 18
C
Calendar year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 16
Capital gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Capital stock accounts . . . . . . . . . . . . . . . . . . . . 41
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Cash receipts and disbursements . . . . . . . . . . 6
Central organization . . . . . . . . . . . . . . . . . . . . . . . 8
CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Change of address . . . . . . . . . . . . . . . . . . . . . 9, 72
Change of name (see ‘‘name change’’) . . . . . 9
Changes in net assets . . . . . . . . . . . . . . . . . . . . 72
Charitable risk pools . . . . . . . . . . . . . . . . . . . . . . . 4
Child care organizations . . . . . . . . . . . . . . . . . . . 4
Children . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Church . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Church-affiliated organization . . . . . . . . . . . . . . 5
Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Code(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
College . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Compensation . . . . . . . . . . . . . . . . . 13, 21, 30, 65
Current officers . . . . . . . . . . . . . . . . . . . . . . . . . 37
Disqualified persons . . . . . . . . . . . . . . . . . 21, 37
Former officers . . . . . . . . . . . . . . . . . . . . . . . . . 21
Other persons . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Reasonable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Reportable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Compilation (compiled financial
statements) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Completing the heading . . . . . . . . . . . . . . . . . . . . 9
Conflicts of interest policy . . . . . . . . . . . . . . 18, 19
Conservation easement . . . . . . . . . . . . . . . . . . . 12
Contemporaneous . . . . . . . . . . . . . . . . . . . . . . . . 68
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

-75-

Contributions . . . . . . . . . . . . . . . . . . . . . . 12, 31, 32
Disclosure statement . . . . . . . . . . . . . . . . . . . 15
Donation of services . . . . . . . . . . . . . . . . . . . . 31
Donor advised funds . . . . . . . . . . . . . . . . . . . . 68
Government . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Government grants . . . . . . . . . . . . . . . . . . . . . 32
Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Membership dues . . . . . . . . . . . . . . . . . . . 11, 31
Noncash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Nondeductible . . . . . . . . . . . . . . . . . . . . . . . . . 15
Quid pro quo . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Contributor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Contributors, Schedule of . . . . . . . . . . . . . . . . . 32
Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Controlled entity . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Controlling organization:
Section 512(b)(13) . . . . . . . . . . . . . . . . . . . 5, 13
Cooperative service organizations . . . . . . . . . . 4
Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Credit counseling . . . . . . . . . . . . . . . . . . . . . . . . . 12
Custodial arrangements . . . . . . . . . . . . . . . . . . . . 2
D
De minimis fringe benefit . . . . . . . . . . . . . . . . . . 68
Debt management plan services . . . . . . . . . . . 12
Defeasance escrow . . . . . . . . . . . . . . . . . . . . . . 33
Deferred charges . . . . . . . . . . . . . . . . . . . . . . . . . 40
Deferred compensation . . . . . . . . . . . . . . . . . . . 72
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . 40
Defined benefit plan . . . . . . . . . . . . . . . . . . . . . . 26
Nonqualified . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Qualified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Defined contribution plan:
Nonqualified . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Qualified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Dependent care assistance . . . . . . . . . . . . . . . 26
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Determination letter . . . . . . . . . . . . . . . . . . . . . . . 72
Direct expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Director or trustee . . . . . . . . . . . . . . . . . . . . . . . . 22
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Conflict of interest . . . . . . . . . . . . . . . . . . . . . . 19
Disqualified person(s) . . . . . . . . . . . . . . . . . . 17
Excess business holdings . . . . . . . . . . . . . . . 15
Section 501(c)(3) organizations . . . . . . . . . . 3
Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Disclosure of excess business holdings . . . . 15
Disqualified persons . . . . . . . . . . . . . . . . . . . . . . 67
Disregarded benefits . . . . . . . . . . . . . . . . . . . . . . 26
Disregarded entities . . . . . . . . . . . . . . . . 8, 24, 65
Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Document retention and destruction
policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Of use of materials, equipment or
facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Of vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Donor advised fund(s):
Disqualified person . . . . . . . . . . . . . . . . . . . . . 67
Donor advisor . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Excess benefit transaction . . . . . . . . . . . . . . 68
Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Sponsoring organization . . . . . . . . . . . . . . . . . 5
Donor contributions:
Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . 15
Dues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Membership . . . . . . . . . . . . . . . . . . . . . . . . 33, 38

Page 76 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Dues (Cont.)
Paid to affiliates . . . . . . . . . . . . . . . . . . . . . . . . 38
E
Economic benefit . . . . . . . . . . . . . . . . . . . . . . . . . 68
Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Nontaxable fringe benefits . . . . . . . . . . . . . . 69
Electronic filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Email subscription . . . . . . . . . . . . . . . . . . . . . . . . . 4
Employee benefit plan . . . . . . . . . . . . . . . . . . . . . 6
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . 37
Employee(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Employees, key . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Employer identification number (EIN):
Disregarded entities . . . . . . . . . . . . . . . . . . . . 65
Section 501(c)(9) organizations . . . . . . . . . . 9
Employment tax return . . . . . . . . . . . . . . . . . . . . . 7
Endowment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
e-Postcard (see also Form 990 – N) . . . . . . . . 60
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Escrow or custodial account . . . . . . . . . . . . . . . 40
Estates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Estimate, reasonable . . . . . . . . . . . . . . . . . . . . . 10
Excess benefit transaction . . . . . . . . . . . . . 67, 68
Churches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Correction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Donor advised funds . . . . . . . . . . . . . . . . . . . . 70
Excess payment . . . . . . . . . . . . . . . . . . . . . . . 70
Excise tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Insufficient payment . . . . . . . . . . . . . . . . . . . . 70
Revenue sharing transactions . . . . . . . . . . . 70
Revocation of exemption . . . . . . . . . . . . . . . . 70
Section 4958 . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Excess business holdings . . . . . . . . . . . . . . . . . 15
Excise taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Executive director . . . . . . . . . . . . . . . . . . . . . . . . 20
Exempt function . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Exempt organizations, types of . . . . . . . . . . . . 59
Exempt purposes . . . . . . . . . . . . . . . . . . 11, 18, 35
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Allocating indirect . . . . . . . . . . . . . . . . . . . . . . 35
Direct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Functional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Fundraising . . . . . . . . . . . . . . . . . . . . . . . . . 34, 35
Indirect expenses . . . . . . . . . . . . . . . . . . . . . . 35
Management and general . . . . . . . . . . . . . . . 35
Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Political . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Postage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Program service . . . . . . . . . . . . . . . . . . . . . 35, 39
Shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Extension of time to file . . . . . . . . . . . . . . . . . . . . 7
F
Facility/facilities . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Facts and circumstances . . . . . . . . . . . . . . . . . . 64
Fair market value . . . . . . . . . . . . . . . . . . . . . . . . . 68
Family:
Family member . . . . . . . . . . . . . . . . . . . . . . . . 67
Federal unemployment tax (FUTA) . . . . . . . . 71
Federated fundraising agencies . . . . . . . . . . . 31
Federated fundraising organizations . . . . . . . 36
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Fundraising . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Government agencies . . . . . . . . . . . . . . . . . . 33
Initiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Figuring gross receipts . . . . . . . . . . . . . . . . . . . . 60
FIN 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Final return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 9
Financial account . . . . . . . . . . . . . . . . . . . . . . . . . 14

Financial statements . . . . . . . . . . . . . . . . . . . . . . 41
Fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Five highest compensated employees . . . . . 22
Fixed payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Former officers, directors, trustees, and key
employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Forms:
Form 1023, Application for Recognition of
Exemption Under Section
501(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Form 1024, Application for Recognition of
Exemption Under Section 501(a) . . . . . . 71
Form 1040, U.S. Individual Income Tax
Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Form 1041, U.S. Income Tax Return for
Estates and Trusts . . . . . . . . . . . . . . . . . . . 71
Form 1065, U.S. Return of Partnership
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Form 1096, Annual Summary and
Transmittal of U.S. Information
Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Form 1098 series . . . . . . . . . . . . . . . . . . . . . . 71
Form 1099 – MISC, Miscellaneous
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Form 1120 – POL, U.S. Income Tax Return
for Certain Political Organizations . . . . . 71
Form 1128, Application To Adopt, Change or
Retain a Tax Year . . . . . . . . . . . . . . . . . . . . 71
Form 2848, Power of Attorney and
Declaration of Representative . . . . . . . . . 71
Form 3115, Application for Change in
Accounting Method . . . . . . . . . . . . . . . . . . . 71
Form 3520, Annual Return To Report
Transactions with Foreign Trusts and
Receipt of Certain Foreign Gifts . . . . . . . 71
Form 4506, Request for Copy of Tax
Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Form 4506 – A, Request for Public Inspection
or Copy of Exempt or Political
Organization IRS Form . . . . . . . . . . . . . . . 71
Form 4562, Depreciation and
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . 71
Form 4720, Return of Certain Excise Taxes
Under Chapters 41 and 42 of the Internal
Revenue Code . . . . . . . . . . . . . . . . . . . . . . . 71
Form 5471, Information Return of U.S.
Persons With Respect To Certain Foreign
Corporations . . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 5500, Annual Return/Report of
Employee Benefit Plan . . . . . . . . . . . . . . . 72
Form 5578, Annual Certification of Racial
Nondiscrimination for a Private School
Exempt From Federal income Tax. . . . . 72
Form 5768, Election/Revocation of Election
by an Eligible Section 501(c)(3)
Organization To Make Expenditures To
Influence Legislation . . . . . . . . . . . . . . . . . 72
Form 7004, Application for Automatic
Extension of Time to File Certain Business
Income Tax, Information, and Other
Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 8038 series, Tax Exempt
Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 8274, Certification by Churches and
Qualified Church-Controlled Organizations
Electing Exemption from Employer Social
Security and Medicare Taxes . . . . . . . . . 72
Form 8282, Donee Information
Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 8283, Noncash Charitable
Contributions . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 8300, Report of Cash Payments Over
$10,000 Received in a Trade or
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 8328, Carryfoward Election of Unused
Private Activity Bond Volume Cap . . . . . 72
Form 8718, User Fee for Exempt
Organization Determination Letter
Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

-76-

Form 8821, Tax Information
Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 8822, Change of Address . . . . . . . . . 72
Form 8868, Application for Extension of
Time to File an Exempt Organization
Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 8870, Information Return for Transfers
Associated With Certain Personal Benefit
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 8871, Political Organization Notice of
Section 527 Status . . . . . . . . . . . . . . . . . . . 72
Form 8872, Political Organization Report of
Contributions and Expenditures . . . . . . . 72
Form 8886, Reportable Transaction
Disclosure Statement . . . . . . . . . . . . . . . . . 72
Form 8886 – T, Disclosure by Tax-Exempt
Entity Regarding Prohibited Tax Shelter
Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Form 8899, Notice of Income From Donated
Intellectual Property . . . . . . . . . . . . . . . . . . 72
Form 8921, Applicable Insurance Contracts
Information Return . . . . . . . . . . . . . . . . . . . 72
Form 926, Return by a U.S. Transferor of
Property to a Foreign Corporation . . . . . 71
Form 940, Employer’s Annual Federal
Unemployment (FUTA) Tax Return . . . . 71
Form 941, Employer’s Quarterly Federal Tax
Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Form 943, Employer’s Annual Tax Return for
Agricultural Employees . . . . . . . . . . . . . . . 71
Form 990 – BL, Information and Initial Excise
Tax Return for Black Lung Benefit Trusts
and Certain Related Persons . . . . . . . . . . 6
Form 990 – EZ, Short Form Return of
Organization Exempt From Income
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Form 990 – N, Electronic Notice (e-Postcard)
for Tax-Exempt Organizations Not
Required To File Form 990 or
990 – EZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Form 990 – PF, Return of Private Foundation
or Section 4947(a)(1) Nonexempt
Charitable Trust Treated as a Private
Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Form 990 – T, Exempt Organization Business
Income Tax Return . . . . . . . . . . . . . . . . . . . 71
Form 990 – W, Estimated Tax on Unrelated
Business Taxable Income for Tax-Exempt
Organizations . . . . . . . . . . . . . . . . . . . . . . . . 71
Form SS-4, Application for Employer
Identification Number . . . . . . . . . . . . . . . . . 72
Form TD F 90 – 22.1, Report of Foreign Bank
and Financial Accounts . . . . . . . . . . . . . . . 72
Form W-2, Wage and Tax Statement . . . . 71
Forms and publications . . . . . . . . . . . . . . . . . . . 14
Foundations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Fringe benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
De minimis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Nontaxable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Functional expenses . . . . . . . . . . . . . . . . . . . . . . 35
Allocating indirect . . . . . . . . . . . . . . . . . . . . . . 35
Fundraising . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Management and general . . . . . . . . . . . . . . . 35
Program service . . . . . . . . . . . . . . . . . . . . . . . . 35
Fund Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Fundraising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Records for tax deductible
contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Fundraising events . . . . . . . . . . . . . . . . . . . . . . . 34
Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
G
Gaming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
GEN (Group exemption number) . . . . . . . . . . 10
Generally accepted accounting
principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31, 32

Page 77 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Goods or services . . . . . . . . . . . . . . . . . . . . . . 34
Goods sold, cost of . . . . . . . . . . . . . . . . . . . . . 35
Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Governing body . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Governing documents . . . . . . . . . . . . . . . . . . . . 19
Government:
Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32, 35
Official . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Government unit . . . . . . . . . . . . . . . . . . . . . . . . . 40
Governmental issuer . . . . . . . . . . . . . . . . . . . . . . 33
Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 31, 36
Allocations, and . . . . . . . . . . . . . . . . . . . . . . . . 11
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Government contributors . . . . . . . . . . . . . . . . 32
Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Grants and other assistance . . . . . . . . . . . . . . 71
Gross receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
$25,000 or less . . . . . . . . . . . . . . . . . . . . . . . . . 60
Acting as agent . . . . . . . . . . . . . . . . . . . . . . . . 60
Figuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Gross receipts test:
$25,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
$5,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Gross rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Gross revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Gross sales price . . . . . . . . . . . . . . . . . . . . . . . . . 33
Group exemption . . . . . . . . . . . . . . . . . . . . . . . . . 63
Central/parent organization . . . . . . . . . . . . . 63
Group exemption number (GEN) . . . . . . . . 10
Subordinate organization . . . . . . . . . . . . . . . 10
Group return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
H
Heading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Health benefit plan . . . . . . . . . . . . . . . . . . . . . . . 26
Health benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Helpful hints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Highest compensated employee . . . . . . . . . . . 66
Historical treasure . . . . . . . . . . . . . . . . . . . . . . . . 12
Hospital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Hours per week . . . . . . . . . . . . . . . . . . . . . . . . . . 24
I
Identifying number (of paid preparer) . . . . . . 10
Income:
Exempt function . . . . . . . . . . . . . . . . . . . . . . . . 11
Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Unrelated business . . . . . . . . . . . . . . . . . . . . . 14
Incomplete return . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Independent contractor . . . . . . . . . . . . . . . . . . . 31
Independent voting member of governing
body . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Information return . . . . . . . . . . . . . . . . . . . . . . . . 61
Initial contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Initial return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Instant bingo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Institutional trustee . . . . . . . . . . . . . . . . . . . . . . . 22
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Insurance contract . . . . . . . . . . . . . . . . . . . . . . . . 61
Integrated auxiliary . . . . . . . . . . . . . . . . . . . . . . . . 5
Intellectual property . . . . . . . . . . . . . . . . . . . . . . . 15
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 38
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Tax-exempt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Interest income . . . . . . . . . . . . . . . . . . . . . . . . 32, 33
Notes and loans receivable . . . . . . . . . . . . . 33
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Interested persons . . . . . . . . . . . . . . . . . . . . . . . . 66
Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . . . . . . . . . .
Program-related . . . . . . . . . . . . . . . . . . . . . . . .
Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Savings and temporary cash . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34
33
17
33
60
33
18
33
33
39
40

J
Joint costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
K
Key employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
L
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Late filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Liabilities, total . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
List of states . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Loans:
Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Lobbying:
Activity/Activities . . . . . . . . . . . . . . . . . . . . . . . 12
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Grassroots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
In-house expenditures . . . . . . . . . . . . . . . . . . 37
Joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Lobbying expenditures . . . . . . . . . . . . . . . . . . . . 65
Local governmental unit . . . . . . . . . . . . . . . . . . . 40
Lotteries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
M
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Management and general expenses . . . . . . . 35
Management company . . . . . . . . . . . . . . . . . . . . 18
Medicaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Medical research . . . . . . . . . . . . . . . . . . . . . . . . . 62
Medicare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Member of the governing body . . . . . . . . . . . . 17
Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Dues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31, 38
Merger, articles of . . . . . . . . . . . . . . . . . . . . . . . . . 9
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Mission society . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Money market funds . . . . . . . . . . . . . . . . . . . . . . 39
Museums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Mutual or cooperative electric
companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
N
Name:
Name and address . . . . . . . . . . . . . . . . . . . . . . 9
Name change . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Name change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Noncash contribution . . . . . . . . . . . . . . . . . . . . . 32
Nondiscrimination policy . . . . . . . . . . . . . . . . . . 72
Nonexempt charitable trusts . . . . . . . . . . . . . . . 39
Nonfixed payments . . . . . . . . . . . . . . . . . . . . . . . 69
Nontaxable fringe benefit . . . . . . . . . . . . . . . . . 69
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . 39
Number of employees . . . . . . . . . . . . . . . . . . . . 65

-77-

Nursing homes . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
O
Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
OMB Circular A-133 . . . . . . . . . . . . . . . . . . . . . . 41
Ordinary course of business . . . . . . . . . . . . . . . 18
Organization manager . . . . . . . . . . . . . . . . . . . . 70
Organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . 6, 70
Affiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Form of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Not required to file . . . . . . . . . . . . . . . . . . . . . . . 5
Organizational documents . . . . . . . . . . . . . . . . 64
Organizations:
Foreign countries, in . . . . . . . . . . . . . . . . . . . . . 5
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Other compensation . . . . . . . . . . . . . . . . . . . . . . 23
Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
P
Paid preparer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Paperwork Reduction Act Notice . . . . . . . . . . 42
Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Payments:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 68
Nonfixed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
To affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 15, 71
Failure to file . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Perjury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Pension plan contributions . . . . . . . . . . . . . . . . 37
Personal benefit contracts . . . . . . . . . . . . . . . . . 15
Phone help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Photographs of missing children . . . . . . . . . . . . 4
Pledges receivable . . . . . . . . . . . . . . . . . . . . . . . 39
Policies:
Conflicts of interest . . . . . . . . . . . . . . . . . . . . . 18
Document retention and destruction . . . . . 20
Joint venture . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Nondiscrimination . . . . . . . . . . . . . . . . . . . . . . 72
Whistleblower . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Political:
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Political campaign activities . . . . . . . . . . . . . . . . 3
Political organization . . . . . . . . . . . . . . . . . . . . . . . 5
Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Public inspection . . . . . . . . . . . . . . . . . . . . . . . 61
Section 527 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
State or local . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Postage cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Power of attorney . . . . . . . . . . . . . . . . . . . . . . . . . 71
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . 40
Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Private business use . . . . . . . . . . . . . . . . . . . . . . 66
Private delivery services . . . . . . . . . . . . . . . . . . . 7
Private foundation . . . . . . . . . . . . . . . . . . . . . . . . 67
Privileged relationship . . . . . . . . . . . . . . . . . . . . 18
Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Professional fundraising services . . . . . . . . . . 37
Program service . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Program service accomplishments, statement
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Program service expenses . . . . . . . . . . . . . . . . 35
Program service revenue . . . . . . . . . . . . . . 32, 33
Government agency . . . . . . . . . . . . . . . . . . . . 32
Insurance premiums . . . . . . . . . . . . . . . . . . . . 32
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . 33
Medicaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Medicare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Page 78 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

Program service revenue (Cont.)
Membership fees . . . . . . . . . . . . . . . . . . . . . . . 33
Program-related investments . . . . . . . . . . . . 32
Rental income . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 501(c)(9) organization . . . . . . . . . . 32
Unrelated trade or business activities . . . . 32
Program-related investment . . . . . . . . . . . . . . . 32
Prohibited tax shelter transactions . . . . . . . . . 14
Proxy tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Public charity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Public Inspection . . . . . . . . . . . . . . . . . . . . . . . . . 61
Public interest law firm . . . . . . . . . . . . . . . . . . . . 11
Public support . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Pub. 15, (Circular E) Employer’s Tax
Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 15 – A, Employer’s Supplemental Tax
Guide (Fringe Benefits) . . . . . . . . . . . . . . . 72
Pub. 1771, Charitable
Contributions – Substantiation and
Disclosure Requirements . . . . . . . . . . . . . 72
Pub. 1779, Independent Contractor or
Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Pub. 1828, Tax Guide for Churches and
Religious Organizations . . . . . . . . . . . . . . 72
Pub. 3079, Gaming Publication for
Tax-Exempt Organizations . . . . . . . . . . . . 72
Pub. 3386, Tax Guide for Veterans
Organizations . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 3833, Disaster Relief, Providing
Assistance Through Charitable
Organizations . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 4220, Applying for 501(c)(3)
Tax-Exempt Status . . . . . . . . . . . . . . . . . . . 72
Pub. 4221 – PC, Compliance Guide for
501(c)(3) Public Charities . . . . . . . . . . . . . 72
Pub. 4221 – PF, Compliance Guide for
501(c)(3) Private Foundations . . . . . . . . . 72
Pub. 4302, A Charity’s Guide to Vehicle
Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 4303, A Donor’s Guide to Vehicle
Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 4630, Exempt Organizations Products
and Services Navigator . . . . . . . . . . . . . . . 72
Pub. 525, Taxable and Nontaxable
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 526, Charitable Contributions . . . . . . 72
Pub. 538, Accounting Periods and
Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 557, Tax-Exempt Status for Your
Organization . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 561, Determining the Value of Donated
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 598, Tax on Unrelated Business
Income of Exempt Organizations . . . . . . 72
Pub. 892, Exempt Organization Appeal
Procedures for Unagreed Issues . . . . . . 72
Pub. 910, IRS Guide to Free Tax
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 946, How To Depreciate
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Pub. 947, Practice Before the IRS and
Power of Attorney . . . . . . . . . . . . . . . . . . . . 10
Travel, Entertainment, Gift, and Car
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Publicly traded securities . . . . . . . . . . . . . . . . . . 40
Pull-tabs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Purchases from affiliates . . . . . . . . . . . . . . . . . . 38
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Q
Qualified intellectual property . . . . . . . . . . . . . . 15
Qualified state or local political
organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Quid pro quo contribution:
Disclosure statement . . . . . . . . . . . . . . . . . . . 15
R
Raffles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Reasonable:
Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Belief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Burden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 17
Effort . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 18, 25
Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Reasonableness, rebuttable presumption
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Reconciliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Refunding escrow . . . . . . . . . . . . . . . . . . . . . . . . 13
Reimbursement:
Of expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Related organization . . . . . . . . . . . . . . . . . . . 17, 21
Religious order . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Rent/rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Reportable compensation . . . . . . . . . . . . . . . . . 13
Requirements for a properly completed Form
990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 41
Returns and allowances . . . . . . . . . . . . . . . . . . 34
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 40
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Program service . . . . . . . . . . . . . . . . . . . . . . . . 32
Special events . . . . . . . . . . . . . . . . . . . . . . . . . 34
Sweepstakes, raffles, and lotteries . . . . . . 34
Revenue-sharing transactions . . . . . . . . . . . . . 70
Review of financial statements . . . . . . . . . . . . 12
Revocation of exemption . . . . . . . . . . . . . . . . . . 70
Rounding off to whole dollars . . . . . . . . . . . . . . . 8
Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
S
Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Of inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Sarbanes-Oxley . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Savings accounts . . . . . . . . . . . . . . . . . . . . . . . . . 39
Schedule of contributors . . . . . . . . . . . . . . . . . . 12
Schedules:
Schedule A, Public Charity Status and Public
Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Schedule B, Schedule of Contributors . . . . 3
Schedule C, Political Campaign and
Lobbying Activities . . . . . . . . . . . . . . . . . . . . 3
Schedule D, Supplemental Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Schedule E, Schools . . . . . . . . . . . . . . . . . . . . 3
Schedule F, Statement of Activities Outside
the United States . . . . . . . . . . . . . . . . . . . . . . 3
Schedule G, Supplemental Information
Regarding Fundraising or Gaming
Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Schedule H. Hospitals . . . . . . . . . . . . . . . . . . . 3
Schedule I, Grants and Other Assistance to
Organizations, Governments and
Individuals in the United States. . . . . . . . . 3
Schedule J, Compensation
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Schedule K, Supplemental Information for
Tax-Exempt Bonds . . . . . . . . . . . . . . . . . . . . 3
Schedule L. Transactions with Interested
Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Schedule M, Noncash Contributions . . . . . . 3

-78-

Schedule N, Liquidation, Termination,
Dissolution, or Significant Disposition of
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Schedule O, Supplemental Information to
Form 990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Schedule R, Related Organizations and
Unrelated Partnerships . . . . . . . . . . . . . . . . 3
Scholarships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
School . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4947(a)(1) trusts . . . . . . . . . . . . . . . . . . 11
Section 4958 . . . . . . . . . . . . . . . . . . . . . . 67, 69, 70
Section 4958, excise taxes:
Disqualified persons . . . . . . . . . . . . . . . . . . . . 67
Organization managers . . . . . . . . . . . . . . . . . 70
Section 501(c)(12) . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 501(c)(15) . . . . . . . . . . . . . . . . . . . . . . 5, 60
Section 501(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Applicable organization . . . . . . . . . . . . . . . . . 67
Disclosure of transactions and
relationships . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 501(c)(4):
Applicable organization . . . . . . . . . . . . . . . . . 67
Section 501(c)(5):
Lobbying expenses . . . . . . . . . . . . . . . . . . . . . 12
Membership dues . . . . . . . . . . . . . . . . . . . . . . 33
Section 501(c)(6):
Lobbying expenses . . . . . . . . . . . . . . . . . . . . . 12
Membership dues . . . . . . . . . . . . . . . . . . . . . . 33
Section 501(c)(7) . . . . . . . . . . . . . . . . . . . . . . 16, 66
Section 501(c)(9) . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6033(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Security/Securities . . . . . . . . . . . . . . . . . . . . . . . . 34
Sequencing list to complete the form and
schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Severance payments . . . . . . . . . . . . . . . . . . . . . 37
SFAS 116, Accounting for Contributions
Received and Contributions Made . . . . . 6, 31
SFAS 117, Financial Statements of
Not-for-Profit Organizations . . . . . . . . . . 12, 41
Shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Short accounting period . . . . . . . . . . . . . . . . . . . . 6
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Signature block . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Significant disposition of assets . . . . . . . . . . . . 66
Social club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Social security:
Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Social welfare organization . . . . . . . . . . . . . . . . . 2
Solicitations of nondeductible
contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Special events . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Specific instructions for Form 990 . . . . . . . . . . 9
Sponsoring organization . . . . . . . . . . . . . . . . . . . 5
State:
Filing requirement . . . . . . . . . . . . . . . . . . . . . . 72
Reporting requirements . . . . . . . . . . . . . . . . . . 7
State of legal domicile . . . . . . . . . . . . . . . . . . . . 10
Statement(s):
Activities outside of United States . . . . . . . 12
Audited financial . . . . . . . . . . . . . . . . . . . . . . . 65
Changes in net assets . . . . . . . . . . . . . . . . . . 72
Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Financial Accounting Standards (SFAS
116) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Functional expenses . . . . . . . . . . . . . . . . . . . . 35
Position 98 – 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Program service accomplishments . . . . . . 11
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Supplemental financial . . . . . . . . . . . . . . . . . . . 3
Subordinate organization . . . . . . . . . . . . . . . . . 63
Substantial contributor . . . . . . . . . . . . . . . . . 49, 67
Substantial influence . . . . . . . . . . . . . . . . . . . . . . 67
Supported organization . . . . . . . . . . . . . . . . . . . 67
Supporting organization . . . . . . . . . . . . . . . . 15, 68
Sweepstakes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Page 79 of 79
2-FEB-2010

Instructions for Form 990 Return of Organization Exempt From Income Tax

9:01 -

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

T
Tax shelter transaction . . . . . . . . . . . . . . . . . . . . 14
Tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Tax-exempt bond . . . . . . . . . . . . . . . . . . . . . . . . . . 3
TE/GE EO Determinations . . . . . . . . . . . . . . . . 61
Telephone number . . . . . . . . . . . . . . . . . . . . . . . . 9
Term endowment . . . . . . . . . . . . . . . . . . . . . . . . . 12
Terminated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Top financial official . . . . . . . . . . . . . . . . . . . . . . 22
Top management official . . . . . . . . . . . . . . . . . . 22
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Transfers:
Personal benefit contracts . . . . . . . . . . . . . . 15
To controlled entities . . . . . . . . . . . . . . . . . . . 13
Travel expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust fund recovery penalty . . . . . . . . . . . . . . . 71
Trust, section 4947(a)(1) . . . . . . . . . . . . . . . . . . 11
Trustee(s) . . . . . . . . . . . . . . . . . . . . . 10, 13, 17, 22
Institutional . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Tuition assistance . . . . . . . . . . . . . . . . . . . . . . . . 26

U
U.S. possession . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
U.S. Treasury bills . . . . . . . . . . . . . . . . . . . . . . . . 39
Uniform Prudent Management of Institutional
Funds Act (UPMIFA) . . . . . . . . . . . . . . . . . . . 41
Unincorporated association . . . . . . . . . . . . . . . . 9
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
University/universities . . . . . . . . . . . . . . . . . . . . . 12
Unrelated business . . . . . . . . . . . . . . . . . . . . . . . 14
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Unrelated business income . . . . . . . . . . . . . . . 35
Unrelated organization . . . . . . . . . . . . . . . . . . . . 13
Unrelated trade or business:
Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Gross income . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Volunteer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Volunteer exception . . . . . . . . . . . . . . . . . . . . . . 25
Voting member of the governing
body/board . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

V
Vehicle donations . . . . . . . . . . . . . . . . . . . . . . . . 72
Voluntary employees’ beneficiary
association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

■

-79-

W
Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Website address . . . . . . . . . . . . . . . . . . . . . . . . . 10
Whistleblower policy . . . . . . . . . . . . . . . . . . . . . . 20
Who must file . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Widely available . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Withholding:
Backup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Works of art . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Y
Year of formation . . . . . . . . . . . . . . . . . . . . . . . . . 10