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

i990--2014-00-00

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

OMB: 1545-0047

Document [pdf]
Download: pdf | pdf
2014

Instructions for Form 990
Return of Organization
Exempt From Income Tax

Department of the Treasury
Internal Revenue Service

Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code
(except private foundations)
Section references are to the Internal Revenue Code unless
otherwise noted.
Contents
Page

Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . .
Phone Help . . . . . . . . . . . . . . . . . . . . . . . . . . .
Email Subscription . . . . . . . . . . . . . . . . . . . . . .
General Instructions . . . . . . . . . . . . . . . . . . . . .
A. Who Must File . . . . . . . . . . . . . . . . . . . .
B. Organizations Not Required To File Form
990 or 990-EZ . . . . . . . . . . . . . . . . . . . .
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. Reconciliation of Net Assets . . . . . .
Part XII. Financial Statements and Reporting
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix of Special Instructions to Form 990
Contents . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix A. Exempt Organizations Reference
Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nov 10, 2014

.
.
.
.
.

.
.
.
.
.

.
.
.
.
.

.
.
.
.
.

1
2
2
2
2

.... 3

4
5
5
6
6
6
7

.
.
.
.
.
.
.

.
.
.
.
.
.
.

.
.
.
.
.
.
.

.
.
.
.
.
.
.

.
.
.
.
.

.
.
.
.
.

.
.
.
.
.

. 7
. 8
. 8

10
10

. . . 10
. . . 11
. . . 15
. . . 18

.
.
.
.
.
.
.

.
.
.
.
.
.
.

.
.
.
.
.
.
.

24
36
41
46
49
49
51

. . . 72
. . . 73

Contents

Appendix B. How to Determine Whether an
Organization's Gross Receipts Are Normally
$50,000 (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 . . . . . . . . . . . . . . . . . . . . . . .
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. Contributions . . . . . . . . . . . . . . . . .
Appendix K. Business Activity Codes . . . . . . . . .
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

. . . 74
. . . 74
. . . 75
. . . 79
. . . 80
. . . 82
. . . 87
.
.
.
.

.
.
.
.

.
.
.
.

Future Developments

89
90
93
95

For the latest information about developments related to Form
990 and its instructions, such as legislation enacted after they
were published, go to www.irs.gov/form990.

What’s New
2014 Significant Changes

In Part VII, Section A. Officers, Directors, Trustees, Key
Employees, and Highest Compensated Employees, changes
clarify that reportable compensation should not be treated as
deferred if deferred from the calendar year ending with or within
the tax year to a date that is not more than 2 ½ months after the
end of the calendar year ending with or within the tax year.
In Part XI. Reconciliation of Net Assets, new instructions are
provided for lines 5, 6, and 8.
In Appendix E. Group Returns—Reporting Information on
Behalf of the Group, new instructions are provided for group
returns with section 509(a)(3) supporting organizations.

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 Form 990-T, Exempt

Cat. No. 11283J

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.

Helpful Hints. The following hints can help you more efficiently
review these instructions and complete the form.
See General Instructions, Section C. Sequencing List to
Complete the Form and Schedules, later, which provides
guidance on the recommended order for completing the form
and applicable statements.
Throughout these instructions, “the organization” and the
“filing organization” both refer to the organization filing Form 990.
Unless otherwise specified, information should be provided
for the organization's tax year. For instance, an organization
should answer “Yes” to a question asking whether it conducted a
certain type of activity only if it conducted that activity during the
tax year.
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.

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.

Phone Help

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.

Organizations that have total gross income from
unrelated trades or businesses of at least $1,000
CAUTION
also 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.

Email Subscription

!

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/Charities- &-Non-Profits/Subscribe-to-ExemptOrganization-Update.

A. Who Must File

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.

General Instructions
Overview of Form 990

An organization may not file a “consolidated” Form 990
to aggregate information from another organization that
has a different EIN, unless it is filing a group return
and reporting information from a subordinate organization or
organizations, reporting information from a joint venture or
disregarded entity (see Appendices E and F, later), or as
otherwise provided for in the Code, regulations, or official IRS
guidance. A parent exempt organization of a section 501(c)(2)
title-holding company may file a consolidated Form 990-T with
the section 501(c)(2) organization, but not a consolidated Form
990.

TIP

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

!

CAUTION

Certain Form 990 filers must file electronically. See
General Instructions, Section E. When, Where, and
How to File, later, 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 XII of the form
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 (see Appendix D.
Public Inspection of Returns), and can be required to be filed
with state governments to satisfy state reporting requirements.
See Appendix I. Use of Form 990 and 990-EZ to Satisfy State
Reporting Requirements.

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 $200,000 or (2) total
assets greater than or equal to $500,000 at the end of the tax
year (with exceptions described below for organizations eligible
to submit Form 990-N and for certain organizations described in
Section B. Organizations Not Required to File Form 990 or
990-EZ, later). 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 tax year, without subtracting
any costs or expenses. See Appendix B for a discussion of
gross receipts.

Reminder: Do Not Include Social Security Numbers
on Publicly Disclosed Forms. Because the filing
CAUTION
organization and the IRS are required to publicly
disclose the organization's annual information returns, social
security numbers should not be included on this form. By law,
with limited exceptions, neither the organization nor the IRS may
remove that information before making the form publicly
available. Documents subject to disclosure include statements
and attachments filed with the form. For more information, see
Appendix D. Public Inspection of Returns.

!

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(j) (amateur sports
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).
-2-

Instructions for Form 990

receipts are normally $50,000 or less, unless it meets one of the
exceptions for certain political organizations under Section B.
Organizations Not Required To File Form 990 or 990-EZ, later. 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.

Form 990-N. If an organization normally has gross receipts of
$50,000 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, 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 Section B. Organizations Not
Required To File Form 990 or 990-EZ, later.) See Appendix B for
a discussion of gross receipts.

Section 4947(a)(1) nonexempt charitable trusts. A
nonexempt charitable trust described under section 4947(a)
(1) (if it is not treated as a private foundation) is required to file
Form 990 or 990-EZ, unless excepted under Section B.
Organizations Not Required To File Form 990 or 990-EZ, later.
Such a trust is treated like an exempt section 501(c)(3)
organization for purposes of completing the form. Section
4947(a)(1) trusts must complete all sections of the Form 990 and
schedules that section 501(c)(3) organizations must complete.
All references to a section 501(c)(3) organization in the Form
990, schedules, and instructions 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.

Form 990-EZ. If an organization has gross receipts less than
$200,000 and total assets at the end of the tax year less than
$500,000, 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 submit the Form 990-N or file the
Form 990-EZ chooses to file the Form 990, it must file a
complete return.
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 Section B. Organizations Not
Required To File Form 990 or 990-EZ, later. Report amounts in
U.S. dollars and state what conversion rate the organization
uses. Combine amounts from inside and outside the United
States and report the total for each item. All information must be
written in English.

Returns when exempt status not yet established. An
organization is required to file Form 990 under these instructions
if the organization claims exempt status under section 501(a) but
has not established such exempt status by filing Form 1023,
Application for Recognition of Exemption Under Section 501(c)
(3) of the Internal Revenue Code, Form 1023-EZ, Streamlined
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), and receiving
an IRS determination letter recognizing tax-exempt status. In
such a case, the organization must check the “Application
pending” checkbox in Form 990, Item B, Heading, page 1
(whether or not a Form 1023, 1023-EZ, 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.
To qualify for tax exemption retroactive to the date of its
organization or formation, an organization claiming tax-exempt
status under section 501(c)(3), 501(c)(9), or 501(c)(17) generally
must file Form 1023, 1023-EZ, or 1024 within 27 months of the
end of the month in which it was legally organized or formed.

Sponsoring organizations of donor advised funds. If
required to file an annual information return for the year,
sponsoring organizations of donor advised funds 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 $50,000 or less,
and even if it is described in Rev. Proc. 96-10, 1996-1 C.B. 577,
or is an affiliate of a governmental unit described in Rev. Proc.
95-48, unless it qualifies as one of the following:
1. An integrated auxiliary of a church 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.

An organization that has filed a letter application for
recognition of exemption as a qualified nonprofit health
CAUTION
insurance issuer under section 501(c)(29), or plans to
do so, but has not yet received an IRS determination letter
recognizing exempt status, must check the “Application
pending” checkbox in the Form 990 Heading, Item B.

!

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 $200,000 of gross receipts for the tax year or
$500,000 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 Section A. Who
Must File to determine if the organization can file Form 990-EZ
instead of Form 990. An organization described in paragraph 10,
11, or 13 of this Section B is required to submit Form 990-N
unless it voluntarily files Form 990, 990-EZ, or 990-BL, as
applicable.

If the organization is described in (3) but not in (1) or (2), then it
must submit 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. A tax-exempt political
organization must file Form 990 or 990-EZ if it had $25,000 or
more in gross receipts during its tax year, even if its gross
Instructions for Form 990

Certain religious organizations.
1. A church, an interchurch organization of local units of a
church, a convention or association of churches, or an
-3-

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.

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. But see
the filing requirements for section 509(a)(3) supporting
organizations in A. Who Must File.
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. But see the
filing requirements for section 509(a)(3) supporting
organizations in A. Who Must File.
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).
Certain organizations with limited gross receipts.
10. An organization whose gross receipts are normally
$50,000 or less. Such organizations generally are required to
submit Form 990-N if they choose not to file Form 990 or Form
990-EZ. To determine what an organization's gross receipts
“normally” are, see Appendix B. How to Determine Whether an
Organization's Gross Receipts Are Normally $50,000 (or $5,000)
or Less.
11. Foreign organizations and organizations located in U.S.
possessions, whose gross receipts from sources within the
United States are normally $50,000 or less and which did not
engage in significant activity in the United States (other than
investment activity). Such organizations, if they claim U.S. tax
exemption or are recognized by the IRS as tax-exempt,
generally are required to submit Form 990-N if they choose not
to file Form 990 or 990-EZ.

Subordinate organizations in a group exemption
which are included in a group return filed by the
central organization for the tax year should not file a
separate Form 990 or Form 990-EZ for the tax year.

TIP

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 (Form 990 or 990-EZ),
Supplemental Information to Form 990, should be completed as
the core form and schedules are completed. Note that all
organizations filing Form 990 must file Schedule O.
A public charity described in section 170(b)(1)(A)(iv),
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, and check the box for “Initial return of a former
public charity” on page 1 of Form 990-PF.

TIP

1. Complete Items 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 Item G in the Heading section of Form 990, on
page 1.
6. Complete Parts III, V, VII, XI, and XII of Form 990.
7. See the Instructions for Schedule L (Form 990 or
990-EZ), Transactions With Interested Persons, 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
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 or 990-EZ) and any
other applicable schedules (for “Yes” boxes that were checked

If a foreign organization or U.S. possession organization is
required to file Form 990 or Form 990-EZ, then its worldwide
gross receipts, as well as assets, are taken into account in
determining whether it qualifies to file Form 990-EZ.
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
-4-

Instructions for Form 990

change its accounting method. An exception applies where a
section 501(c) organization changes its accounting method to
comply with the Financial Accounting Standards Board (FASB)
Statement of Financial Accounting Standards 116, Accounting
for Contributions Received and Contributions Made (SFAS
116), now codified in FASB Accounting Standards Codification
958, Not-for-Profit Entities (ASC 958). 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, must report
any adjustment required by section 481(a) in Parts VIII through
XI and in Schedule D, (Form 990), Supplemental FInancial
Statements, Parts XI and XII, as applicable.

in Part IV). Use Schedule O (Form 990 or 990-EZ) to provide
required supplemental information and other narrative
explanations for questions on the core Form 990. For questions
on Form 990 schedules, use the narrative part of each schedule
to provide supplemental narrative.
12. Complete Part II, Signature Block, of Form 990.

D. Accounting Periods and Methods
These are the accounting periods covered under the law.

Accounting Periods
Calendar year. Use the 2014 Form 990 to report on the 2014
calendar year accounting period. A calendar year accounting
period begins on January 1 and ends on December 31.

State reporting. Many 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.

Fiscal year. If the organization has established a fiscal year
accounting period, use the 2014 Form 990 to report on the
organization's fiscal year that began in 2014 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 2014 and the date the
fiscal year ended in 2015.

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.

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 began in 2014, and ended before
December 31, 2014 (not on or after December 31, 2014), it may
use either 2013 Form 990 or 2014 Form 990 to file for the short
year. The 2014 form may also be used for a short period
beginning in 2015 and ending before December 31, 2015 (not
on or after December 31, 2015). When doing so, provide the
information for designated years listed on the return, other than
the tax year being reported, as if they were updated on the 2015
form. For example, provide the information in Schedule A, Part II,
for the tax years 2011-2015, rather than for tax years 2010-2014.
A short period return cannot be filed electronically unless it is an
initial return for which the “Initial return” box is checked in Item B
of the Heading or a final return for which the “Final return/
terminated” box is checked in Item B of the Heading.

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 XII.

TIP

E. When, Where, and How to File

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 has previously changed its annual
accounting period at any time within the 10-calendar-year period
that includes the beginning of the short period resulting from
the current change in accounting period, and it had a Form
990-series filing requirement or income tax return filing
requirement at any time during that 10-year period, it must also
file a Form 1128, Application To Adopt, Change, or Retain a Tax
Year, with the short-period return. See Rev. Proc. 85-58, 1985-2
C.B. 740.
If an organization that submits Form 990-N changes its
accounting period, it must report this change on Form 990, Form
990-EZ, or Form 1128, or by sending a letter to Internal Revenue
Service, 1973 N. Rulon White Blvd., Ogden, Utah 84404.

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 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

Accounting Methods

Unless instructed otherwise, the organization should generally
use the same accounting method on the return (including the
Form 990 and all schedules) 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.

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

Accounting method change. Generally, the organization must
file Form 3115, Application for Change in Accounting Method, to
Instructions for Form 990

See Pub. 538, Accounting Periods and Methods, and
the instructions to Forms 1128 and 3115, about
reporting changes to accounting periods and methods.

-5-

990-EZ) which parts and schedules of the Form 990 were
amended and describe the amendments.

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.
For private delivery services, deliver the return to:

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 IRS.gov for information on getting blank tax forms.
If the return is a final return, the organization must check the
“Final return/terminated” box in Item B of the Heading on page 1
of the form, and complete Schedule N (Form 990 or 990-EZ),
Liquidation, Termination, Dissolution, or Significant Disposition
of Assets.

Internal Revenue Service
1973 N. Rulon White Blvd.
Ogden, UT 84404.

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 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.

The private delivery service can tell you how to get written
proof of the mailing date.

!

CAUTION

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, Employer's Quarterly
Federal Tax Return), 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, unless it is reporting a
name change, in which case it must file by paper and attach the
documents described in Specific Instructions, Item B.
Checkboxes, later. See Regulations section 301.6033-4 for
more information on mandatory electronic filing of Form 990.
For additional information on the electronic filing requirement,
visit www.irs.gov/Filing.
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.

H. Failure-to-File Penalties
Against the organization. Under section 6652(c)(1)(A), a
penalty of $20 a day, not to exceed the lesser 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
shows 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 for any one return of $50,000). The
penalty applies on each day after the due date that the return is
not filed.
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, unless the
organization files by paper to report a name change.
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 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 and accurate return.

F. Extension of Time To File

Use Form 8868, Application for Extension of Time To File an
Exempt Organization Return, 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.

G. Amended Return/Final 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 for 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

To amend 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 on
page 1 of the form. Also, enter in Schedule O (Form 990 or

-6-

Instructions for Form 990

however, the special rules for Schedule B (Form 990, 990-EZ, or
990-PF), Schedule of Contributors, 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.

with the IRS (see sections 7203, 7206, and 7207). States can
impose additional penalties for failure to meet their separate
filing requirements.
Automatic revocation for nonfiling for three consecutive
years. 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 submit a notice as
required for 3 consecutive years, its tax-exempt status is
automatically revoked on and after the due date for filing its third
annual return or notice. Organizations that lose their tax-exempt
status may need to file income tax returns and pay income tax,
but may apply for reinstatement of exemption. For details, go to
www.irs.gov/eo.

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.
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.

I. Group Return

A central, parent, or similar 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 tax year
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 tax year as the central organization.

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.

The central organization cannot use a Form 990-EZ for the
group return.
A subordinate organization may choose to file a separate
annual information return instead of being included in the group
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 Regulations section 1.6033-2(d)(1). See
Section B. Organizations Not Required To File Form 990 or
990-EZ, earlier, for a list of organizations not required to file.

Completing all lines. Make an entry (including -0- 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.
All filers must file Schedule O (Form 990 or 990-EZ). Certain
questions require all filers to provide an explanation in
Schedule O (Form 990 or 990-EZ). In general, answers can be
explained or supplemented in Schedule O (Form 990 or 990-EZ)
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.
Missing or incomplete parts of the form and/or required
schedules may result in the IRS contacting you to obtain the
missing information. Failure to supply the information may result
in a penalty being assessed to your account. For tips on filing
complete returns, go to www.irs.gov/charities.

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:
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, Group Returns–Reporting Information
on Behalf of the Group.

Reporting proper amounts. Some lines request information
reported on other forms filed by the organization (such as Forms
W-2, 1099, and 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).
In general, do not report negative numbers, but use -0instead of a negative number, unless the instructions otherwise
provide. Report revenue and expenses separately and do not
net related items, unless otherwise provided.

J. Requirements for a Properly
Completed Form 990

All organizations filing Form 990 must complete Parts I through
XII, Schedule O (Form 990 or 990-EZ), 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 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,
Instructions for Form 990

Inclusion of activities and items of disregarded entities
and joint ventures. An organization must report on its Form
-7-

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 on 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 on the appropriate parts or schedules of Form 990. For
special instructions about 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.

Item A. Accounting period. File the 2014 return for calendar
year 2014 and fiscal years that began in 2014 and ended in
2015. For a fiscal year return, fill in the tax year space at the top
of page 1. See General Instructions, Section D. Accounting
Periods and Methods, earlier, for additional information about
accounting periods.
Item B. Checkboxes. The following checkboxes are under
Item B.
Address change. Check this box if the organization changed
its address and has not reported the change on its most recently
filed Form 990, 990-EZ, 990-N, or 8822-B or in correspondence
to the IRS.

Reporting information from third parties. Some lines
request information that the organization may need to obtain
from third parties, such as compensation paid by related
organizations; family and business relationships between
officers, directors, trustees, key employees, and certain
businesses they own or control; the organization's share of the
income and assets of a partnership or joint venture in which it
has an ownership interest; and certain transactions between the
organization and interested persons. The organization should
make reasonable efforts to obtain this information. If it is unable
to obtain certain information by the due date for filing the return,
it should file Form(s) 8868 to request a filing extension. See
Section F. Extension of Time To File, earlier. If the organization
is unable to obtain this information by the extended due date
after making reasonable efforts, and is not certain of the answer
to a particular question, it may make a reasonable estimate,
where applicable, and explain in Schedule O.

TIP

If a change in address occurs after the return is filed,
use Form 8822-B, Change of Address or Responsible
Party—Business, to notify the IRS of the new address.

Name change. Check this box if the organization changed its
legal name (not its “doing business as” name) and if the
organization has not reported the change on its most recently
filed Form 990 or 990-EZ or in correspondence to the IRS. If the
organization changed its name, file Form 990 by paper and
attach the following documents:

Assembling Form 990, schedules, and
attachments.

Before filing Form 990, assemble the package of forms,
schedules, and attachments in the following order.
1. Core form with Parts I through XII 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) articles of merger or dissolution, resolutions, and plans of
liquidation or merger required by Schedule N (Form 990 or
990-EZ); (d) reasonable cause explanation for a late-filed return;
and (e) for hospital organizations only, a copy of the most
recent audited financial statements.

IF the organization is . . .

THEN attach . . .

A corporation

A copy of the amendment to the
articles of incorporation, and proof of
filing with the appropriate state
authority.

A trust

A copy of the amendment to the trust
instrument, or a resolution to amend
the trust instrument, showing the
effective date of the change of name
and signed by at least one trustee.

An unincorporated association

A copy of the amendment to the
articles of association, constitution, or
other organizing document, showing
the effective date of the change of
name and signed by at least two
officers, trustees, or members.

Initial return. Check this box if this is the first time the
organization is filing a Form 990 and it has not previously filed a
Form 990-EZ, 990-PF, 990-T, or 990-N.
Final return/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, merged into another organization, or
has had its exemption revoked by the IRS. An organization that
checks this box because it has liquidated, terminated, or
dissolved during the tax year must also attach Schedule N (Form
990 or 990-EZ).

Do not attach materials not authorized in the instructions or
not otherwise authorized by the IRS.
To facilitate the processing of your return, do not
password protect or encrypt PDF attachments.
CAUTION
Password protecting or encrypting a PDF file that is
attached to an e-filed return prevents the IRS from opening the
attachment.

An organization must support any claim to have
liquidated, terminated, dissolved, or merged by
CAUTION
attaching a certified copy of its articles of dissolution or
merger approved by the appropriate state authority. If a certified
copy of its articles of dissolution or merger is not available, the
organization must submit a copy of a resolution or resolutions of
its governing body approving plans of liquidation, termination,
dissolution, or merger.

!

!

Specific Instructions

Amended return. Check this box if the organization
previously filed a return with the IRS for a 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 or
990-EZ) the parts and schedules of the Form 990 that were

Heading. Items A–M
Complete items A through M.

-8-

Instructions for Form 990

organization does not have a telephone number, enter the
telephone number of an organization official who can provide
such information.

amended and describe the amendments. See General
Instructions, Section G. Amended Return/Final Return, earlier,
for more information.
Application pending. Check this box if the organization
either has filed a Form 1023, 1023-EZ, or 1024 with the IRS and
is awaiting a response, or claims tax-exempt status under
section 501(a) but has not filed Form 1023, 1023-EZ, or 1024 to
be recognized by the IRS as tax-exempt. If this box is checked,
the organization must complete all parts of Form 990 and any
required schedules. An organization that is required to file an
annual information return (Form 990 or Form 990-EZ) or submit
an annual electronic notice (Form 990-N) for a tax year (see
General Instructions, Section A. Who Must File, earlier) must do
so even if it has not yet filed a Form 1023, 1023-EZ, or 1024 with
the IRS, if it claims tax-exempt status.
To qualify for tax exemption retroactive to the date of its
organization or formation, an organization claiming tax-exempt
status under section 501(c)(3), 501(c)(9), or 501(c)(17) generally
must file Form 1023, 1023-EZ, or 1024 within 27 months of the
end of the month in which it was legally organized or formed.

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 organization's current (as of the date
this return is filed) 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.
If a change in responsible party occurs after the return
is filed, use Form 8822-B, Change of Address or
Responsible Party—Business, to notify the IRS of the
new responsible party.

TIP

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 General Instructions,
Sections A and B, earlier.

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 or 990-EZ).
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 or town, state or province, the name of the country,
and the postal code. Do not abbreviate the country name.
If a change in address occurs after the return is filed, use
Form 8822-B, Change of Address or Responsible
Party—Business, to notify the IRS of the new address.

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 or 990-EZ)) showing the name,
address, and EIN of each local or subordinate 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 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:

Item I. Tax-exempt status. Check the applicable box. If the
organization is exempt under section 501(c) (other than section
501(c)(3)), check the second box and insert the appropriate
subsection number within the parentheses (for example, “4” for a
501(c)(4) organization).

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 J. Website. Enter the organization's current address for its
primary website, as of the date of filing this return. If the
organization does not maintain a website, enter “N/A” (not
applicable).

A subordinate organization that files a separate Form
990 instead of being included in a group return must
use its own EIN, and not that of the central
organization.

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).

TIP

TIP

A section 501(c)(9) voluntary employees' beneficiary
association must use its own EIN and not the EIN of its
sponsor.

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 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
Instructions for Form 990

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
-9-

Paid Preparer

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).

Generally, anyone who is paid to prepare the return must sign
the return, list the preparer's taxpayer identification number
(PTIN), and fill in the other blanks in the Paid Preparer Use Only
area. An employee of the filing organization is not a paid
preparer.

Part I. Summary
Because Part I generally reports information reported
elsewhere on the form, complete Part I after the
other parts of the form are completed. See General
Instructions, Section C. Sequencing List to Complete the Form
and Schedules, earlier.
Complete lines 3–5 and 7–22 by using applicable references
made in Part I to other items.

The paid preparer must:
Sign the return in the space provided for the preparer's
signature,
Enter the preparer information, including the preparer's PTIN,
and
Give a copy of the return to the organization.

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.

Any paid preparer can apply for and obtain a PTIN online at
www.irs.gov/ptin or by filing Form W-12, IRS Paid Preparer Tax
Identification Number (PTIN) Application and Renewal.

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.

Enter the paid preparer's PTIN, not his or her social
security number (SSN), in the “PTIN” box in the paid
CAUTION
preparer's block. The IRS will not redact the paid
preparer's SSN if such SSN is entered on the paid preparer's
block. Because Form 990 is a publicly disclosable document,
any information entered in this block will be publicly disclosed
(see Appendix D). For more information about applying for a
PTIN online, visit the IRS website at www.irs.gov/taxpros.

TIP

!

Line 6. Enter the number of volunteers, full-time and part-time,
including volunteer members of the organization's governing
body, 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 or 990-EZ) 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.

Note. A paid preparer may sign original or amended returns by
rubber stamp, mechanical device, or computer software
program.

Paid Preparer Authorization

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 Use Only section of Form 990. It
does not apply to the firm, if any, shown in that section.

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.

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.

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 2013 Form 990 to
determine what to report for prior year revenue and expense
amounts.
Line 16a. Enter the total of (i) the fees for professional
fundraising services reported in Part IX, column (A), line 11e,
and (ii) the portion of the amount reported in Part IX, column (A),
lines 5 and 6, that comprises fees for professional fundraising
services paid to officers, directors, trustees, key employees, and
disqualified persons, whether or not such persons are
employees of the organization. Exclude the latter amount from
Part I, line 15.

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 2015
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.

Part II. Signature Block

The return must be signed by the current president, vice
president, treasurer, assistant treasurer, chief accounting officer,
or other corporate officer (such as a tax officer) who is
authorized to sign as of the date this return is filed. A receiver,
trustee, or assignee must sign any return he or she files for a
corporation or association. See Regulations section 1.6012-3(b)
(4). 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, and from
the definition of principal officer for purposes of the Form 990
Heading (see Glossary).

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.

Part III. Statement of Program Service
Accomplishments

Check the box in the heading of Part III if Schedule O (Form 990
or 990-EZ) contains any information pertaining to this part. Part
III requires reporting regarding the organization's program
service accomplishments. A program service is an activity of an
organization that accomplishes its exempt purpose. Examples of
program service accomplishments 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,
-10-

Instructions for Form 990

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. For organizations other than section
501(c)(3) and 501(c)(4) organizations, entering these amounts is
optional.
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 or 990-EZ) if additional space is needed.
Donated services or use of equipment, materials, or
facilities. 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 Part III, lines 4a–4e,
even if prepared according to 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.

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 a program service
accomplishment 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 or ratified by its governing
body, enter “None.”
Line 2. Answer “Yes,” if the organization undertook any new
significant program services prior to the end of the tax year that
it did not describe in a prior year's Form 990 or 990-EZ. Describe
these items in Schedule O (Form 990 or 990-EZ). If any are
among the activities described on Form 990, Part III, line 4, the
organization can reference the detailed description on line 4. If
the organization has never filed a Form 990 or 990-EZ, answer
“No.”
Line 3. Answer “Yes,” if the organization made any significant
changes prior to the end of the tax 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 or 990-EZ).
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 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.

TIP

Line 4d. Other program services. Enter on Schedule O (Form
990 or 990-EZ) 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 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 Part III, line 4e their total program
service expenses from Part III, lines 4a–4d. For all other
organizations, entering these amounts is optional. The
organization may report the non-contribution portion of
membership dues in line 4d or allocate that portion among lines
4a–4c.

Lines 4a–4c. All organizations must describe their
accomplishments for each of their three largest program
services, as measured by total expenses incurred (not including
donated services or the donated use of materials, equipment, or
facilities). If there were three or fewer of such activities, describe
each program service activity. The organization can report on
Schedule O (Form 990 or 990-EZ) 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 2014 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
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 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
Instructions for Form 990

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.
-11-

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 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 1. Answer “Yes,” if the organization is a section 501(c)(3)
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 or Form 1023-EZ application or received a
determination letter recognizing its section 501(c)(3) status. All
other organizations answer “No.”

Line 8. Answer “Yes,” if at any time during the year the
organization maintained collections of works of art, historical
treasures, and other similar assets as described in SFAS
116 (ASC 958-360-20), whether or not the organization reported
revenue and assets related to such collections in its financial
statements.

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) and 170(b)(1)(A)(vi),
checks the box on Schedule A (Form 990 or 990-EZ), Part II,
line 13, 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. An organization filing Schedule B can limit the
contributors it reports on Schedule B using this
greater-than-$5,000/2% threshold only if it checks the box on
Schedule A (Form 990 or 990-EZ), Part II, line 13, 16a, or 16b.
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, (a) 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 (b) 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.

TIP

Organizations that answer “Yes” to line 8 often will
answer “Yes” to Part IV, line 30, which addresses
current-year noncash 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,
(2) provided credit counseling services and/or debt
management plan services, such as credit repair or debt
negotiations, or (3) acted as an agent, trustee, custodian, or
other intermediary for contributions or other assets not included
in Part X.
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 temporarily restricted
endowment, permanent endowment, or quasi-endowment
funds at any time during the year, whether or not the
organization follows SFAS 117 (ASC 958) or reports
endowments in Part X, line 32. See the instructions for
Schedule D (Form 990), Part V, for the definitions of these types
of endowments.

Do not attach substitutes for Schedule B. Parts I, II, and
III of Schedule B (Form 990, 990-EZ, or 990-PF) may
CAUTION
be photocopied as needed to provide adequate space
for listing all contributors.

!

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 (ASC 740) (including a
statement that the organization had no liability for uncertain tax
positions). 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 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. Answer
“Yes,” if the organization engaged in lobbying activities or had
a section 501(h) election in effect during the tax year. All section
501(c)(3) organizations that had a section 501(h) election in
effect during the tax year must complete Schedule C (Form 990
or 990-EZ), Part II-A, whether or not they engaged in lobbying
activities during the tax year.

Line 12a. Answer “Yes,” if the organization received separate,
independent audited financial statements for the year for
which it is completing this return, or if the organization is
reporting for a short year that is included in, but not identical to,
the period for which the audited financial statements were
obtained. All other organizations answer “No.” Answer “No” if the
organization was included in consolidated audited financial
statements, unless the organization also received separate
audited financial statements.
An accountant's compilation or review of financial
statements is not considered to be an audit and does not
produce audited financial statements. 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–
XII.

Line 5. Answer “Yes” 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
answer “No.”
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 over the use or investment of any portion of the
account, but which is not 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 12b. Answer “Yes,” if the organization was included in
consolidated, independent audited financial statements for
the year for which it is completing this return. All other
organizations answer “No.” Answer “Yes,” if the organization is
-12-

Instructions for Form 990

organization was included in consolidated audited financial
statements but not separate audited financial statements for the
tax year, then it must attach a copy of the consolidated financial
statements, including details to consolidation (whether or not
audited).

reporting for a short year that is included in, but not identical to,
the period for which the audited financial statements were
obtained.
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.

Line 21. Answer “Yes,” if the organization reported on Part IX,
column (A), line 1, more than $5,000 of grants and other
assistance to any domestic organization, or to any domestic
government. For instance, answer “No” if the organization made
a $4,000 grant to each of two domestic organizations and no
other grants. Do not report grants or other assistance provided
to domestic organizations or domestic governments for the
purpose of providing grants or other assistance to designated
foreign organizations or foreign individuals.

Lines 14a–14b. 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,
investment, and program service activities outside the United
States, or if the book value of the organization's aggregate
investments in foreign partnerships, foreign corporations, and
other foreign entities was $100,000 or more at any time during
the tax year.
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. An organization with an investment in a
foreign corporation would need to take into account dividends it
receives from the corporation, but would not need to 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.

Line 22. Answer “Yes,” if the organization reported on Part IX,
column (A), line 2, more than $5,000 of aggregate grants and
other assistance to or for domestic individuals. Do not report
grants or other assistance provided to or for domestic individuals
for the purpose of providing grants or other assistance to
designated foreign organizations or foreign individuals.
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 15. Answer “Yes,” if the organization reported on Part IX,
column (A), line 3, more than $5,000 of grants and other
assistance to any foreign organization or entity, (including a
foreign government) or to a domestic organization or
domestic individual for the purpose of providing grants or other
assistance to a designated foreign organization or
organizations.

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), Supplemental Information on
Tax-Exempt Bonds. Those that answer “No” to line 24a can skip
to line 25a.
Line 24a. Answer “Yes” and complete Schedule K (Form
990) for each tax-exempt bond issued by or for the benefit of
the organization 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. For
this purpose, bonds that have been legally defeased, and as a
result are no longer treated as a liability of the organization, are
not considered outstanding.
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 for tax-exempt bonds issued for the benefit of the
organization.
Line 24d. Answer “Yes,” if the organization has received a
letter ruling that its obligations were issued on behalf of a state or

Line 16. Answer “Yes,” if the organization reported on Part IX,
column (A), line 3, more than $5,000 of aggregate grants and
other assistance to foreign individuals, or to domestic
organizations or domestic individuals for the purpose of
providing grants or other assistance to a designated foreign
individual or individuals.
Lines 17–19. Answer “Yes” to line 17 if the total amount
reported for professional fundraising services in Part IX
(line 11e, plus the 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 20a. 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 one or
more hospital facilities at any time during the tax year. Except
in the case of a group return, do not include hospital 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 subordinate
included in the group return operated such a hospital facility.
Line 20b. If the organization operated one or more hospital
facilities at any time during the tax year, then it must attach a
copy of its most recent audited financial statements. If the
Instructions for Form 990

-13-

for definitions and explanations of these terms and transactions
or events, and a description of articles of dissolution and other
information that must be filed with Form 990.
Note that a significant disposition of net assets may result
from either an expansion or contraction of operations.
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.

local governmental unit; meets the conditions for issuing
tax-exempt bonds as set forth in Rev. Rul. 63-20, 1963-1 C.B.
24 (see Rev. Proc. 82-26, 1982-1 C.B. 476); or is a constituted
authority organized by a state or local governmental unit to issue
tax-exempt bonds in order to further public purposes (see Rev.
Rul. 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 33–34. The organization is required to report on
Schedule R (Form 990), Related Organizations and Unrelated
Partnerships, 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.
Report disregarded entities in Schedule R, Part I; related
tax-exempt organizations in Part II; related organizations taxable
as partnerships in Part III; and any related organizations taxable
as C or S corporations or trusts in Part IV.

Lines 25a–25b. Complete lines 25a and 25b only if the
organization is a section 501(c)(3), 501(c)(4), or 501(c)(29)
organization. If the organization is not described in sections
501(c)(3), 501(c)(4), or 501(c)(29), skip lines 25a and 25b and
leave them blank. In line 25b, answer “Yes,” if the organization
became aware, prior to filing this return, that it engaged in an
excess benefit transaction with a disqualified person in a
prior year, and if the transaction has not been reported on any of
the organization’s prior Forms 990 or 990-EZ.
An excess benefit transaction can have serious
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),
501(c)(4), or 501(c)(29) organization that becomes aware that it
may have engaged in an excess benefit transaction should
obtain competent advice regarding section 4958, pursue
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), Transactions With Interested Persons,
Part I, regarding reporting of excess benefit transactions.

TIP

Lines 35a–35b. If an organization was a controlled entity of
the filing organization under section 512(b)(13) during the tax
year, the filing organization must answer “Yes” to line 35a. It
must answer “Yes” to line 35b and complete Schedule R, Part V,
line 2, if it either (1) received or accrued from its controlled entity
any interest, annuities, royalties, or rent, regardless of amount,
during the tax year; or (2) engaged in another type of transaction
(see Schedule R for a list of transactions) with the controlled
entity, if the amounts involved during the tax year for that type of
transaction exceeded $50,000. See the Glossary and the
Instructions for Schedule R (Form 990).
Controlled entities are a subset of related organizations.
Answer “No” to line 35a if the organization had no related
organizations during the tax year. If the answer to line 35a is no,
leave line 35b blank.

Lines 26–28. Lines 26 through 28 ask questions about loans
and other receivables and payables between the organization
and certain interested persons, grants, or other assistance
provided by the organization to certain interested persons, and
certain direct and indirect business transactions between the
organization and 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 36. Complete line 36 only if the organization is a section
501(c)(3) organization and engaged in a transaction over
$50,000 during the tax year with a related organization that
was tax-exempt under a section other than section 501(c)(3). All
other organizations leave this line blank and go to line 37. See
the Instructions for Schedule R (Form 990) for more information
on what needs to be reported on Schedule R (Form 990), Part V,
line 2.
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, and in which the
organization was a partner or member at any time during the tax
year. The 5 percent test is applied on a partnership by
partnership basis, although direct ownership by the organization
and indirect ownership through disregarded entities or tiered
entities treated as partnerships are 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

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 (FMV) 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), Noncash
Contributions, 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)
-14-

Instructions for Form 990

property and not the conduct of a section 501(c)(3) charitable
activity such as program-related investing.

Line 2b. If the organization reported at least one employee on
line 2a, answer whether the organization or reporting agents of
the organization filed all required federal employment tax returns
(which include Form 940, Employer's Annual 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. The organization may leave line 2b blank if it did not
report any employees on line 2a.

Line 38. Answer “Yes,” if the organization completed
Schedule O (Form 990).
Schedule O (Form 990 or 990-EZ) must be completed
and filed by all organizations that file Form 990. All filers
must provide narrative responses to certain questions
(for example, Part VI, lines 11b 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 XII, line 3b for “No” response). All filers
can supplement their answers to other Form 990 questions on
Schedule O.

TIP

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. 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.

Part V. Statements Regarding Other
IRS Filings and Tax Compliance

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.

!

Check the box in the heading of Part V if Schedule O (Form 990
or 990-EZ) contains any information pertaining to this part.

TIP

Line 3b. Answer “Yes,” if the organization checked “Yes” to
line 3a and filed Form 990-T by the time this Form 990 is filed.
Check “No” if the organization answered “Yes” to line 3a but has
not filed Form 990-T by the time this Form 990 is filed, even if the
organization has applied for an extension to file Form 990-T. If
“No” to line 3b, provide an explanation on Schedule O (Form 990
or 990-EZ).

See Glossary for definition of terms used in the
questions in this section.

Some questions in this part pertain to other IRS forms.
Forms are available by calling 1-800-TAX-FORM
(1-800-829-3676) or by downloading from the IRS
website at 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.

TIP

All tax-exempt organizations must pay estimated taxes
for their unrelated business income if they expect
CAUTION
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 1a. The organization must use Form 1096, Annual
Summary and Transmittal of U.S. Information Returns, to
transmit to the IRS paper Forms 1099, 1098, 5498, and W-2G,
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. Enter -0- if the organization did not
file any such forms for the calendar year ending with or within its
tax year, or if the organization is filing for a short year and no
calendar year ended within its tax year.

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.
If “Yes,” electronically file FinCEN Form 114, Report of Foreign
Bank and Financial Accounts (FBAR), by June 30, 2015, with
the Department of the Treasury using the FinCEN's BSA E-Filing
System. Because FinCEN is not a tax form, do not file it with
Form 990.
See www.fincen.gov for more information.

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 backup 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 4b. Enter the name of each foreign country in which a
foreign account described on line 4a is located. Use Schedule O
if more space is needed.
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). For more information on prohibited tax shelter transactions,
see IRS.gov.

Line 2a. Include on this line the number of the organization's
employees (not the number of Forms W-2) reported on a Form
W-3 by both the filing organization and reporting agents of the
filing organization, including common paymasters and payroll
agents, for the calendar year ending with or within the filing
organization's tax year. Enter -0- if the organization did not have
any employees during the calendar year ending with or within its
tax year, or if the organization is filing for a short year and no
calendar year ended within its tax year.

Instructions for Form 990

-15-

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
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 (1) a motor vehicle for use on public
roads, (2) a boat, or (3) an 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, for 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.

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.
Line 6. Answer “Yes” on line 6a only if the organization has
annual gross receipts that are normally greater than $100,000
and if it solicited contributions not deductible under 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 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. 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.
For purposes of the excise tax on excess business holdings
under section 4943, a donor advised fund is treated as a private
foundation.

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.

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 for 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

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 the 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
-16-

Instructions for Form 990

donor or donor advisor and any 35% controlled entity (as
defined in section 4958(f)) of the donor or donor advisor.

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.
Member income for purposes of this 85% Member Income
Test is income derived directly from the members to pay for
services that form the basis for tax exemption under section
501(c)(12), and includes payments for purchases of water,
electricity, and telephone service. Member income does not
include interest income, gains from asset or security sales, or
dividends from another cooperative (unless that cooperative is
also a member).
Members are those individuals or entities that have the right
to elect the governing board of the organization, are involved in
the operations of the organization, and receive a share of its
excess operating revenues.
When calculating the member income percentage to
determine whether an organization meets the 85% Member
Income Test, the organization may exclude specific sources of
income from both the numerator and the denominator of the
fraction. For example, if an organization is a corporation and it
receives an amount that qualifies as a contribution to capital
under section 118, then that amount is not included in either the
numerator or the denominator because it is not considered to be
income for tax purposes. However, the payment must meet the
following conditions (see Rev. Rul. 93-16, 1993-1 C.B. 26) to
qualify as a contribution to capital:
It must become a permanent part of the organization’s
working capital;
It must not be compensation for specific quantifiable services;
It must be bargained for;
It must benefit the organization commensurately with its value;
and
It must ordinarily be used in or contribute to the production of
additional income.
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
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.

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. No section 4967 tax will be
imposed on a distribution if a tax has been imposed for the
distribution under section 4958.

!

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).
A section 501(c)(7) organization is not exempt from
income tax if any written policy statement, including the
governing instrument and bylaws, allows discrimination
on the basis of race, color, or religion.

TIP

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

TIP

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.

Instructions for Form 990

-17-

“Yes” to line 14b. If it answers “No” to line 14b, it should explain
in Schedule O (Form 990 or 990-EZ) why it did not file Form 720.

5. From any asset exchange or conversion transaction.
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).

Part VI. Governance, Management,
and Disclosure

Check the box in the heading of Part VI if Schedule O (Form 990
or 990-EZ) contains any information pertaining to this part. All
organizations must complete Part VI. Use Schedule O (Form
990 or 990-EZ) to provide required supplemental information as
described in this part, and to provide any additional information
that the organization considers relevant to this part.

If the calculated member income percentage for a
section 501(c)(12) organization is less than 85% for the
tax year, then the organization fails to qualify for
tax-exempt status for that year, and it must file Form 1120, U.S.
Corporation Income Tax Return, in lieu of Form 990 or 990-EZ
for the year. However, failing the 85% Member Income Test in
one year does not cause permanent loss of tax-exempt status
under section 501(c)(12). So long as the organization's member
income percentage is equal to or greater than 85% in any
subsequent tax year, the organization may file Form 990 or Form
990-EZ for that year, even if Form 1120 was filed in a prior year.

TIP

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 11a and 11b, 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.

Line 12. All organizations that are not section 4947(a)(1) trusts
are to leave line 12 blank.

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.

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.
Section 4947(a)(1) trusts must complete all sections of the
Form 990 and schedules that section 501(c)(3) organizations
must complete. All references to a section 501(c)(3) organization
in the Form 990, schedules, and instructions shall include a
section 4947(a)(1) trust (for instance, such a trust must complete
Schedule A (Form 990 or 990-EZ), unless expressly excepted).
Line 13. Answer lines 13a, 13b, and 13c only if the organization
has received a loan or grant under the Department of Health and
Human Services CO-OP program.
Line 13a. If the organization is licensed to issue qualified
health plans in more than one state, check “Yes.” If the
organization is licensed to issue qualified health plans in only
one state, check “No.” In either case, report on Schedule O
(Form 990 or 990-EZ) each state in which the organization is
licensed to issue qualified health plans, the dollar amount of
reserves each state requires the organization to maintain, and
the dollar amount of reserves the organization maintains and
reports to each state.
Line 13b. Report the highest dollar amount of reserves the
organization is required to maintain by any of the states in which
the organization is licensed to issue qualified health plans.
Line 13c. Report the highest dollar amount of reserves the
organization maintains on hand and reports to a state in which
the organization is licensed to issue qualified health plans.
Line 14a. Answer line 14a “Yes” if the organization received
any payments during the year for indoor tanning services.
“Indoor tanning services” are services employing any electronic
product designed to incorporate one or more ultraviolet lamps
and intended for the irradiation of an individual by ultraviolet
radiation, with wavelengths in air between 200 and 400
nanometers, to induce skin tanning.
Line 14b. If an organization received a payment for services
for indoor tanning services during the year, it must collect from
the recipient of the services a tax equal to 10% of the amount
paid for such service, whether paid by insurance or otherwise,
and remit such tax quarterly to the IRS by filing Form 720. If the
organization filed Form 720 during the year, it should check

Section A. Governing Body and Management
Line 1a. The governing body is the group of one or more
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 trustee
or trustees of a trust (sometimes referred to as the board of
trustees).
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 or 990-EZ).
If the organization's governing body or governing documents
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 or 990-EZ) 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 or
990-EZ) 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.
-18-

Instructions for Form 990

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, 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. A voluntary employees' beneficiary association
(VEBA) is a trust under state law. Bank B is the sole trustee of
the trust. In completing line 1a, the VEBA will report one voting
member of the governing body.
Line 1b. Enter the number of independent voting members
of the governing body as of the end of the organization's tax
year. A member of the governing body is considered
“independent” only if all four 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. Nor was the member
compensated by an unrelated organization or individual for
services provided to the filing organization or to a related
organization, if such compensation is required to be reported in
Part VII, Section A.
2. The member did not receive total compensation
exceeding $10,000 during the organization's tax year (including
a short year, regardless of whether such compensation is
reported in Part VII) 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.
4. Neither the member, nor any family member of the
member, was involved in a transaction with a taxable or
tax-exempt related organization (whether directly or indirectly
through affiliation with another 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 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).
Example 3. C was Board Chair of X school during the tax
year. X's bylaws designate the following as officer positions:
Board Chair, Secretary, and Treasurer. C set the agenda for
board of directors meetings, officiated board meetings,
coordinated development of board policy and procedure, was an
ex officio member of all committees of the board, conducted
weekly staff meetings, and performed teacher and staff
evaluations. X compensated C during the tax year for C's
services. This compensation was attributable to C's board and
committee activities, and to C's non-director activities involving
staff meetings and evaluations. Because X compensated C for
services as an officer/employee, C is not an independent
member of the governing body. See Rev. Rul. 68-597 and Rev.
Rul. 57-246 for a description of the distinction between director
services and officer services.

Note. The independence standard for purposes of Part VI is not
the same as the “absence of conflict of interest” standard for
purposes of the rebuttable presumption under Treas. Reg.
section 53.4958-6, which focuses on conflicts with respect to a
particular transaction.
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
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.

Instructions for Form 990

Example 4. Same facts as in Example 3, except that the
Board Chair position was not designated as an officer position
under X's Bylaws, board resolutions, or state law. Nevertheless,
because X compensated C for non-director activities involving
staff meetings and evaluations during the tax year, C is deemed
to have received compensation as an employee—not as a
governing body member— for those activities. Therefore, C is
not an independent member of the governing body.
Example 5. Same facts as in Example 3, except that: (1) C
conducted only director and committee activities during the tax
year; (2) C did not conduct staff meetings and evaluations; and
(3) X compensated C a reasonable amount for C's Board Chair
services during the tax year, but did not provide any other
compensation to C in any other capacity. C's independence as a
Board member is not compromised by receiving compensation
from X as a Board member (and not as an officer or employee).
See also Examples 2 and 3 in the Instructions for Part VII,
Section A, line 5, later.
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
-19-

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.

annually to each member of the governing body that includes the
member's name and title, blank lines for the member's signature
and signature date, and 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 current
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 current 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 or 990-EZ).
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, or greater-than-35%
owner, even if that organization is tax-exempt. However, do not
report a person’s employment by the filing organization as a
business relationship.
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, or greater-than-35%
owner. Such transactions do not include charitable contributions
to tax-exempt organizations.
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).

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 an officer 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 and title of
each person reporting information, blank lines for those persons'
signatures and signature dates, and 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 (other than persons acting in their capacities as officers,
directors, trustees, or key employees) 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 include
investment management unless the filing organization conducts
investment management services for others.
If “Yes,” on Schedule O list the name(s) of the management
company or companies or other person(s) performing
management duties; describe the services they provided to the
organization; list any of the organization’s current or former
officers, directors, trustees, key employees, and highest
compensated employees listed in Part VII, Section A; who
were compensated by the management company or companies
or other person(s) during the calendar year ending with or within
the organization's tax year; and list the amounts of reportable
and other compensation they received from the management
company or companies or other person(s) for services provided
to the filing organization and related organizations during that
year.

Ownership is measured by stock ownership (either voting
power or value, whichever is greater) of a corporation, profits or
capital interest in a partnership or limited liability company
(whichever is greater), 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 or trustee 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.

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 significant
changes that were not reported on any prior Form 990, and that
were made before the end of the tax year. Do not report
-20-

Instructions for Form 990

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 FMV 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 significant 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.

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 organization’s name (see also the instructions for Specific
Instructions, Heading, Item B);
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.

Note. A diversion of assets can in some cases be inurement of
the organization's net earnings. In the case of section 501(c)(3),
501(c)(4), and 501(c)(29) 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. Members do not include
governing body members. 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.

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 or
990-EZ), 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 Specific Instructions,
Heading, Item B, regarding attachments required in the event of
a change in the organization's name.

Describe on Schedule O (Form 990 or 990-EZ) the classes of
members or stockholders with the rights described above.

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 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 or 990-EZ) 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 any governance decisions of the
organization were reserved to (or subject to approval by)
members, stockholders, or persons other than the governing
body, whether or not any such governance decisions were
made during the tax year, 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 or
990-EZ) the class or classes of such persons, the decisions that
require their approval, and the nature of their voting rights.

Line 5. Answer “Yes,” if the organization became aware during
the organization's tax year of a significant diversion of its assets,
whether or not the diversion occurred during the year. If “Yes,”
explain the nature of the diversion, dollar amounts and/or other
property involved, corrective actions taken to address the
matter, and pertinent circumstances on Schedule O (Form 990
or 990-EZ), 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
organization's authorized purposes, including but not limited to
Instructions for Form 990

Line 8. Answer “Yes” on lines 8a and 8b if the organization
contemporaneously documented by any means permitted by
-21-

documents. If “No,” explain on Schedule O (Form 990 or
990-EZ) how the organization ensures that the local unit's
activities are consistent with the organization's tax-exempt
purposes.

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 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 the answer to either line 8a or 8b is “No,” explain on
Schedule O (Form 990 or 990-EZ) 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. If the organization had no
committees, answer “No” to line 8b.

Note. The central organization (parent organization) named in
a group exemption letter is required to have general
supervision or control over its subordinate organizations as a
condition of the group exemption.
Line 11a. Answer “Yes” only if a complete copy of the
organization's final Form 990 (including all required schedules),
as ultimately filed with the IRS, was provided to each person
who was a voting member of the governing body at the time
the Form 990 was provided, whether in paper or electronic form,
before its filing with the IRS. The organization can answer “Yes”
if it emailed all of its governing body members a link to a
password-protected web site on which the entire Form 990 can
be viewed, and noted in the email that the Form 990 is available
for review on that site. However, answer “No” if the organization
merely informed its governing body members that a copy of the
Form 990 is available upon request. Answer “No” if the
organization redacted or removed any information from the copy
of its final Form 990 that it provided to its governing body
members before filing the form. For example, answer “No” if the
organization, at the request of a donor, redacted the name and
address of that donor from the copy of its Form 990, Schedule B
that it provided to its governing body members. Under those
circumstances, the organization may explain on Schedule O why
it answered “No” to line 11a.

Line 9. The IRS needs a current 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 or 990-EZ) 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
Answer “Yes” to any question in this section that asks whether
the organization had a particular policy or practice only if the
organization's governing body (or a committee of the governing
body, if the governing body delegated authority to that
committee to adopt the policy) adopted the policy by the end of
its tax year, and if the policy applied to the organization as a
whole. If the policy applied only on a division-wide or
department-wide level, answer “No.” The organization may
explain the scope of such policy on Schedule O.

Line 11b. Describe on Schedule O (Form 990 or 990-EZ) 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 about 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.”

Line 10a. Answer “Yes,” if the organization had during its tax
year any local chapters, local branches, local lodges, or other
similar local units or affiliates over which the organization had
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 had such authority. An affiliate or unit is
considered “local” for this purpose if it is responsible for a
smaller geographical area than the filing organization is
responsible for. Thus, a regional organization would be
considered local for a national organization.

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 or 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 or 990-EZ).

Line 12a.

Example 1. X is a national organization dedicated to the
reform of K. X has affiliates in 15 states which conduct activities
to carry out the purposes of X at the state level. X has the
authority to approve the annual budget of each affiliate. X must
answer “Yes” to line 10a.

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, manager, or key employee 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.

Example 2. Y is a section 170(b)(1)(A)(iii) hospital located in
M City. Y appoints a majority of the board of directors of Z, a
section 509(a)(3) supporting organization that invests funds and
makes grants for the benefit of Y. Although Y controls Z, Z is not
a local affiliate of Y that would require Y to answer “Yes” to
line 10a.
Line 10b. Written policies and procedures governing the
activities of local chapters, branches, and affiliates to ensure
their operations are consistent with the organization's
tax-exempt purposes 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 policies and procedures similar to those described in
lines 11-16 of this section, whether separate or included as
required provisions in the chapter's articles of organization or
bylaws, a manual provided to chapters, a constitution, or similar

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
-22-

Instructions for Form 990

2. The member is in an employment relationship subject to
the direction or control of any person participating in or
economically benefitting from the compensation arrangement.
3. The member receives compensation or other payments
subject to approval by any person participating in or
economically benefitting 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 53.4958-6(c)(1)(iii).

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) information
regarding 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.

Use of data as to comparable compensation for similarly
qualified persons in functionally comparable positions at
similarly situated organizations.
Contemporaneous documentation and recordkeeping for
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 or 990-EZ), 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.
If the organization did not compensate its CEO, executive
director, or top management official during the tax year, answer
“No” to line 15a. If the organization did not compensate any of its
other officers or key employees during the tax year, even if such
employees were compensated by a related organization, answer
“No” to line 15b.

Line 12c. If “Yes” to line 12c, describe on Schedule O (Form
990 or 990-EZ) 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.

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 section 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
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.

TIP

Line 15. Answer “Yes” on line 15a if, during the tax year, the
organization (not a related organization or other third party)
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
regarding 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 regarding a compensation arrangement if any of the
following circumstances apply.
1. The member (or a family member of the member) is
participating in or economically benefitting from the
compensation arrangement.

Instructions for Form 990

Answer “Yes” on line 16b if, as of the end of the organization's
tax year, the organization had both:
1. Followed a written policy or procedure that required 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

-23-

office of the organization, etc.). If the organization did not make
any of these documents available to the public, enter “No
documents available to the public.”
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, 1023-EZ, or 1024).

2. Taken steps to safeguard the organization's exempt
status for 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).
All contracts entered into with the organization be on terms
that are at arm's length or more favorable to the organization.

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.

Section C. Disclosure
Line 17. List the states with which a copy of this Form 990 is
required to be filed, even if the organization has not yet filed
Form 990 with that state. Use Schedule O (Form 990 or 990-EZ)
if additional space is necessary.

TIP

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

Some states require or permit the filing of Form 990 to
fulfill state exempt organization or charitable solicitation
reporting requirements.

Check the box in the heading of Part VII if Schedule O (Form
990 or 990-EZ) contains any information pertaining to this part.
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.
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) and
“other 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, later. 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 that person due to factors such as a different accounting
period (calendar vs. fiscal year) or a different accounting
method.
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 1 or 5 (whichever amount is greater); and Form
1099-MISC, box 7. Organizations also must report other
compensation in Part VII, as discussed in the instructions to Part
VII, Section A, column (F), later.
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, supported organizations, sponsoring
organizations of voluntary employees' beneficiary associations
(VEBAs), and contributing employers to VEBAs. See the

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, 1023-EZ, or 1024) on its website during
its tax year. Check the box for “Another's website” only if the
organization provided to another individual or organization, and
that other individual 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.
If “Other” is checked, explain in Schedule O (Form 990 or
990-EZ). Also explain in Schedule O (Form 990 or 990-EZ) if the
organization did not make publicly available upon request any of
Forms 1023, 1023-EZ, 1024, 990, or 990-T that are subject to
public inspection requirements. Exempt organizations must
make available for public inspection their Form 1023, 1023-EZ,
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, 1023-EZ, 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.
Line 19. Explain on Schedule O (Form 990 or 990-EZ) whether
the organization made 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 during the tax
year, and if so, how it made them available to the public (for
example, posting on the organization's website, posting on
another website, providing copies on request, inspection at an
-24-

Instructions for Form 990

Instructions for Schedule R (Form 990) for a fuller discussion of
related organizations.
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 in Part VII, Section A,
columns (E) and (F).
Up to 25 persons can be reported on the Form 990, Part VII,
Section A table. If more space is needed to enter additional
persons, use as many duplicates of the Section A table as are
needed, and change the numbering to reflect additional persons
(for example, if five additional persons are reported on a
duplicate Section A table, change the numbers along the left
hand margin of the table from 1-5 to 26-30).
Section B requires reporting of the five highest compensated
independent contractors. Section B does not require reporting of
compensation from related organizations.

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.

Section A. Officers, Directors, Trustees, Key
Employees, and Highest Compensated
Employees
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 Glossary and the
Instructions for Schedule R (Form 990)) exceeded the following
thresholds for the tax year.
Current officers, directors, and trustees (no minimum
compensation threshold).
Current key employees (over $150,000 of reportable
compensation).
Current five highest compensated employees other than
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 apply to disregarded entities of which the
organization is the sole member. See instructions for
Disregarded Entities, later.
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 later.

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; for example, the organization's
president, CEO, or executive director.
2. Top financial official. The person who has ultimate
responsibility for managing the organization's finances; for
example, the organization's treasurer or chief financial officer.
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.

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 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.

Instructions for Form 990

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
-25-

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.

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.

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.

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, later, 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. 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 for reporting
reportable compensation and other compensation.
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 listed in the
compensation table, later) 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 (including retirement plan benefits) and
health benefits) that must be reported regardless of amount (see
the instructions for column (F)). The same principles apply to
items of other compensation paid or accrued by a related
organization (applied separately to each related organization).

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 a 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
employee compensation. Under these facts and circumstances,
S does not meet the Responsibility Test and is not a key
employee of T.

!

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

CAUTION

Example 3. U is a large acute-care section 501(c)(3)
hospital. U employs X as a radiologist. X gives instructions to
staff for 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.

Reportable compensation. Reportable compensation
consists of:
For officers and other employees, amounts required to be
reported on Form W-2, box 1 or 5 (whichever amount is greater)
(plus Form 1099-MISC, box 7 if the officer or employee is also
compensated as an independent contractor of the filing
organization or a related organization);
For directors and individual trustees, amounts required to
be reported on Form 1099-MISC, box 7 for director and other
independent contractor services to the organization or a related
organization, plus amounts required to be reported on Form

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,
-26-

Instructions for Form 990

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.

W-2, box 1 or 5 (whichever amount is greater) if also
compensated as an officer or employee of the filing organization
or a related organization; 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. For a full
definition of reportable compensation, see Glossary.

Other compensation. Other compensation includes
compensation other than reportable compensation, including
deferred compensation not currently reportable on Form W-2,
box 1 or 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 compensation
reported in column (F), later, 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).

Corporate officers are considered employees for
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).

TIP

Note. Do not report the same item of compensation in more
than one column of Part VII, Section A, for the tax year.
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, for 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 is 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).

For certain kinds of employees and for retirees, the amount in
box 5 of Form W-2 can be zero or less than the amount in Form
W-2, box 1. 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 that 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, Foreign Person's U.S. Source Income
Subject to Withholding, 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 filing organization (and, as discussed later,
certain third parties such as common paymasters, payroll/
reporting agents, and certain unrelated organizations,
compensation from which is considered compensation from the
filing organization) and related organizations, add the
following amounts.
The amount reported on Form W-2, box 1 or 5 (whichever
amount is greater), and/or Form 1099-MISC, Miscellaneous
Income, box 7, issued to the individual by the organization.
Amounts reported on Form W-2, box 1 or 5 (whichever
amount is greater), 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 1
or 5, (whichever amount is greater) issued to the individual by
Instructions for Form 990

A disregarded entity generally must use the EIN of its
sole member. An exception applies to employment
taxes: for wages paid to employees of a disregarded
entity, the disregarded entity must file separate employment tax
returns and use its own EIN on such returns. See Regulations
sections 301.6109-1(h) and 301.7701-2(c)(2)(iv).

TIP

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 may be reportable on
Schedule L (Form 990 or 990-EZ), Part IV. A key employee of a
management company must 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
-27-

reportable compensation and other compensation from the
unrelated organization, report all such compensation in column
(D).
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.

employee, or highest compensated employee received
compensation from a management company that provided
services to the organization and was a related organization
during the tax year, then the individual's compensation from the
management company must be reported on Form 990, Part VII,
Section A, columns (E) and (F). If the management company
was not a related organization during the tax year, the
individual’s compensation from the management company is not
reportable in Part VII, Section A. Questions pertaining to
management companies also appear on Form 990, Part VI,
line 3 and Schedule H (Form 990), Part IV.

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. List each person on only one line.

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 treat 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.

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), list below the dotted line
an estimate of the average hours per week (if any) devoted to
related organizations.

Compensation from common paymasters, payroll/reporting
agents, and unrelated organizations or individuals (except for
compensation from management companies or leasing
companies, and compensation described in Taxable
organization employee exception, later) 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, directors, 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 common
paymaster, payroll/reporting agent, or unrelated organization or
individual must be reported as compensation from the filing
organization 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).

Column (C). For each person listed in column (A), check the
box that reflects the person's position with the organization
during the tax year. Do not check more than one box, unless the
person was both an officer and a director/trustee of the
organization during the tax year. 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 an employee at any time during the calendar
year ending with or within the organization's tax year, and was a
key employee or highest compensated employee for such
calendar 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 director or
trustee because he or she served as a director or trustee within
the last five years; and received more than $10,000 in
reportable compensation, for the calendar year ending with or
within the organization’s tax year, in his or her 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 served as an officer or key employee within the last

The use of a leasing company, common paymaster,
payroll/reporting agent, or other payroll service provider
CAUTION
does not relieve an employer of its obligation for
employment tax liabilities. The IRS strongly suggests that the
organization does not change its address to that of its payroll
service provider or other third party payer. Doing so could limit
the organization’s ability to stay informed of tax matters,
because the IRS sends correspondence regarding problems
with an employer's account to the employer's address of record.
Alternatively, an employer may grant permission for a third party
payer to receive copies of IRS correspondence by using Form
8822-B, Form 2848, or Form 8655, as appropriate.

!

Compensation from unrelated organizations or individuals.
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 management companies or leasing
companies, as discussed above) or an individual 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, next) such amounts as
compensation from the filing organization if it has knowledge of
the arrangement, whether or not the unrelated organization or
the individual treats the amounts as compensation, grants,
contributions, or otherwise. Report such compensation from
unrelated organizations in Section A, columns (D) and (F), as
appropriate. If the organization cannot distinguish between
-28-

Instructions for Form 990

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 Form 990, Part VII, Section A, for
Y's tax year.

five years and received more than $100,000 of reportable
compensation for the calendar year ending with or within the
organization’s tax year. In such a 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 for 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, from the
organization and/or related organizations, 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 paid to former directors and
trustees for services rendered in their former capacity as
directors or trustees.)

Example 2. T was reported as one of Y Charity's five highest
compensated employees on one of Y's Forms 990, 990-EZ, or
990-PF from one of its five prior tax years. During Y’s tax year, T
was not a current officer, director, trustee, key employee, or
highest compensated employee of Y, although T was still an
employee of Y during the calendar year ending with or within Y's
tax year. T received 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 Form 990, Part VII, Section A, for Y’s tax year
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 Form 990 filed for one of its five prior tax
years. During Y’s tax year Z was not a current officer, director,
trustee, key employee, or highest compensated employee of Y.
For the calendar year ending with or within Y’s tax year, Z
received reportable compensation of $90,000 from Y as an
employee (and no reportable compensation from related
organizations). Because Z received less than $100,000
reportable compensation for the calendar year ending with or
within Y’s tax year from Y and its related organizations, Y is not
required to report Z as a former key employee on Y's Form 990,
Part VII, Section A, for Y’s tax year.

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, if 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, and if the person
received reportable compensation that exceeded the threshold
amount described above, then check only the “Former” box. For
example, do not check both the “Former” and “Officer” boxes for
a former president of the organization who was not an officer of
the organization during the tax year.
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 for the 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, under 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.

Columns (D) and (E). Enter the amounts required to be
reported (whether or not actually reported) on Form W-2, box 1
or 5 (whichever is greater) and/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). If the related organization was related to the filing
organization for only a portion of the tax year, then the filing
organization may choose to report only compensation paid or
accrued by the related organization during the time it was
actually related. If the filing organization reports compensation
on this basis, it must explain in Schedule O (Form 990 or
990-EZ) and state the period during which the related
organization was related.
$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 filing
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

Example 1. X was reported as one of Y Charity's five highest
compensated employees on one of Y's Forms 990, 990-EZ, or
990-PF from one of its five prior tax years. During Y’s tax year, X
was not a current officer, director, trustee, key employee, or
highest compensated employee of Y. X was not an employee of
Y during the calendar year ending with or within Y's tax year.
During this calendar year, X received reportable compensation
Instructions for Form 990

-29-

or accrued by the related organization during the time it was
actually related. If the filing organization reports compensation
on this basis, it must explain in Schedule O (Form 990 or
990-EZ) and state the period during which the related
organization was related.
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 or decrease 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: (1) payments of health benefit plan premiums; (2)
medical reimbursement and flexible spending programs, and (3)
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 allocated benefits for this
purpose.
4. Tax-deferred contributions by the employer and
employee to a funded nonqualified defined contribution plan,
and deferrals under an unfunded nonqualified defined
contribution plan, whether or not such plans are vested or
subject to a substantial risk of forfeiture. See examples in
Schedule J (Form 990), Part II instructions.
5. The annual increase or decrease in actuarial value of a
nonqualified defined benefit plan, whether or not funded, vested,
or subject to a substantial risk of forfeiture.

organizations, and does not provide management services for a
fee to the organization.
Bank or financial institution trustee. If the organization is a
trust with a bank or financial institution trustee that is also a
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, because the other trust is not a related
organization (see Glossary definition of Related organization).
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 related
organization after making a reasonable effort to obtain it, and if
it is unable to make a reasonable estimate of such
compensation. If the organization makes reasonable efforts but
is unable to obtain the information or provide a reasonable
estimate of compensation from a related organization in column
(E) or (F), then it must report the efforts undertaken on
Schedule O (Form 990 or 990-EZ). 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 and title of each person reporting information, blank
lines for those persons' signatures and signature dates, and the
pertinent instructions and definitions for Form 990, Part VII,
Section A, columns (E) and (F).
Short year and final returns. For a short year return in
which there is no calendar year that ends with or within the short
year, leave columns (D) and (E) blank, and do not report any
key employees, highest compensated employees, or
highest compensated independent contractors (because
such persons are determined according to compensation
received in the calendar year ending with or within the tax year
for which the return is filed), unless the return is a final return. If
the return is a final return, report the compensation that is
reportable compensation on Forms W-2 and 1099 for the short
year, from both the filing organization and related organizations,
whether or not Forms W-2 or 1099 have been filed yet to report
such compensation.

$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 compensation table
beginning later) 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.
The $10,000-per-item exception applies separately for each
item of other compensation from the organization and from each
related organization.

Column (F). Other compensation generally includes
compensation not currently reportable on Form W-2, box 1 or 5
or Form 1099-MISC, box 7, including nontaxable benefits other
than disregarded benefits, as discussed in Disregarded
benefits and 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). Deferred
compensation to be reported in column (F) includes
compensation that is earned or accrued in one year and
deferred to a future year, whether or not funded, vested,
qualified or nonqualified, or subject to a substantial risk of
forfeiture. But do not report in column (F) a deferral of
compensation that causes an amount to be deferred from the
calendar year ending with or within the tax year to a date that is
not more than 2 ½ months after the end of the calendar year
ending with or within the tax year if such compensation is
currently reported as reportable compensation.
Enter an amount in column (F) for each person listed in Part
VII, Section A. (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). If the related organization was related to the filing
organization for only a portion of the tax year, then the filing
organization may choose to report only other compensation paid

Example 1. Organization X provides the following
compensation to its current officer:

-30-

Instructions for Form 990

$110,000

5,000
5,000
4,000
500
8,000

if the employer paid a third-party insurer for similar benefits, as
determined on an actuarial basis. The actual benefits paid for B
and B's family for the year are $30,000. If the benefits are not
reportable compensation to B, then Organization S must report
the $10,000 value of plan benefits as other compensation to B in
Form 990, Part VII, Section A, column (F).

Reportable compensation (including pre-tax employee
contributions of $5,000 to a qualified defined contribution
retirement plan and $2,500 to a qualified health benefit plan)
Tax-deferred employer contribution to qualified defined
contribution retirement plan
Nontaxable employer contributions to health benefit plan
Nontaxable dependent care assistance
Nontaxable group life insurance premium
Moving expense (nontaxable as qualified under section 132)

Disregarded benefits. Disregarded benefits under Regulations
section 53.4958-4(a)(4) need not be reported in column (F).
Disregarded benefits generally include fringe benefits excluded
from gross income under section 132. These benefits include
the following:
No-additional cost service;
Qualified employee discount;
Working condition fringe;
De minimis fringe;
Qualified transportation fringe;
Qualified moving expense reimbursement;
Qualified retirement planning services; and
Qualified military base realignment and closure fringe.
For descriptions of each of these disregarded benefits, see
instructions for Schedule J (Form 990 and 990-EZ),
Compensation Information.

Organization Y, a related organization, also provides
compensation to the officer as follows:
$21,000

1,000
5,000

Reportable compensation (including $1,000 pre-tax
employee contribution to qualified defined contribution
retirement plan)
Tax-deferred employer contribution to qualified defined
contribution retirement plan
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.

Short year and final returns. For a short year return in which
there is no calendar year that ends with or within the short year,
leave column (F) blank, unless the return is a final return. If the
return is a final return, report the other compensation for the
short year, from both the filing organization and related
organizations.
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 1 or 5
(whichever is greater) and/or 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.
Any item listed in the following compensation table that is not
followed by a star (x) or asterisk (*) in any column should not be
reported in Part VII, Section A or in Schedule J, Part II (Form
990).

Example 2. Organization S provides health benefits to B (its
CEO) under a self-insured medical reimbursement plan. The
value of the plan benefits for the tax year is $10,000, which
represents the estimated cost of providing coverage for the year

Instructions for Form 990

-31-

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

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

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

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
or decrease in actuarial value)

x

Qualified retirement (defined contribution) plan
investment earnings or losses (not reportable or
other compensation)
Taxable distributions from qualified retirement
plan, including section 457(b) eligible
governmental plan (reported on Form 1099-R but
not reportable or other compensation on Form 990)

-32-

Instructions for Form 990

Where to Report
Type of Compensation

Form 990, Part VII, Section A, column (D) or (E)

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

Schedule J (Form
990), Part II,
column B(i)

Schedule J (Form
990), Part II,
column C

Schedule J (Form
990), Part II,
column B(ii)

Schedule J (Form
990), Part II,
column B(iii)

Distributions from nongovernmental section 457(b)
plan

x

Amounts includible in income under section 457(f)

x

Amounts deferred by employer or employee (plus
earnings) under section 457(b) plan (substantially
vested)

x

Amounts deferred by employer or employee under
section 457(b) or 457(f) plan (not substantially
vested)

Schedule J (Form
990), Part II,
column D

x

Amounts deferred under nonqualified defined
contribution plans (substantially vested)

x

Amounts deferred under nonqualified defined
contribution plans (not substantially vested)

x

Earnings or losses of nonqualified defined
contribution plan (substantially vested)

x

Earnings or losses of nonqualified defined
contribution plan (not substantially vested)
Scholarships and fellowship grants (taxable)
Health benefit plan premiums paid by employer
(taxable)
Health benefit plan premiums paid by the employee
(taxable)

x
x
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 or ministerial housing
allowance (taxable)

x

Housing provided by employer or ministerial housing
allowance (nontaxable) (but see Schedule J
instructions regarding working condition fringes)

*

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)

Instructions for Form 990

x

-33-

Where to Report
Type of Compensation

Form 990, Part VII, Section A, column (D) or (E)

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

Schedule J (Form
990), Part II,
column B(i)

Schedule J (Form
990), Part II,
column C

Schedule J (Form
990), Part II,
column B(ii)

Schedule J (Form
990), Part II,
column B(iii)

Schedule J (Form
990), Part II,
column D

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

Moving (taxable)

x

Meals and entertainment (taxable)

x

Social club dues (taxable)

x

Spending account (taxable)

x

Gift cards

x

Disregarded benefits under Regulations section
53.4958-4(a)(4) (see Schedule J, Part II instructions)

Note. Items marked with asterisk (*) instead of a star (x) are
excludible from Form 990, Part VII, Section A, column (F), if
below $10,000.

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 1
or 5 (whichever is greater) and/or 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 1b. Report the sub-totals of compensation from the
Section A, line 1a table in line 1b, columns (D), (E), and (F).
Line 1c. Report the sub-totals of compensation from
continuation sheets (duplicate Section A tables for filers that
report more than 25 persons in Section A, line 1a table) in
line 1c, columns (D), (E), and (F).
Line 1d. Add the totals of lines 1b and 1c in line 1d for columns
(D), (E), and (F).
Line 2. Report the total number of individuals, both those listed
in the Part VII, Section A table and those not listed, to whom the
filing organization (not related organizations) paid over
$100,000 in reportable compensation during the tax year.

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), but disregard any
decreases in the actuarial value of defined benefit plans.
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). See also line 5 for additional
individuals who must be reported on Schedule J (Form 990),
Part II.

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 1 or 5
(whichever is greater) and/or 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.

-34-

Instructions for Form 990

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

Current or former

Current

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

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

All

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

Directors and Trustees
Former

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

Current

All

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

Former

If reportable compensation is greater
than $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 is greater
than $100,000 in the aggregate from
organization and related organizations

If listed on Form 990, Part VII, Section A

Current

If reportable compensation is greater
than $100,000 in the aggregate from
organization and related organizations

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

Former

If reportable compensation is greater
than $100,000 in the aggregate from
organization and related organizations

If listed on Form 990, Part VII, Section A

Officers

Key employees

Other Five Highest Compensated
Employees

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, 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) about A.

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 (other
than from management companies and leasing companies, as
discussed earlier) 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, earlier.
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) (see
instructions for Common paymaster or payroll/reporting
agent, earlier); 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 2. C is an attorney employed by a law firm that is
not a related organization 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, about 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.
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,
regarding 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
Instructions for Form 990

-35-

Section B. Five Highest Compensated
Independent Contractors

Column (C).
In column (C), report any unrelated business revenue received
by the organization during the tax year from an unrelated trade
or business, unless that revenue is reportable in Part VIII,
column (D). See Pub. 598 and Instructions for Form 990-T for
more information.

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 or insurance providers
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.

A section 501(c)(3) organization that is an S corporation
shareholder must treat all allocations of income from
the S corporation as unrelated business income.
Gain on the disposition of stock is also treated as unrelated
business income. See section 512(e).

TIP

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.
Neither Form 5500 nor DOL Forms LM-2 or LM-3 should be
substituted for the Form 990, Parts VIII or IX.

Column (C). Enter the amount the organization paid, whether
reported on Form 1099-MISC, box 7, or paid under the parties'
agreement or applicable state law, for the calendar year ending
with or within the organization's tax year.
For a short year return in which there is no calendar year that
ends with or within the short year, do not report any information
in columns (A) through (C), unless the return is a final return. If
the return is a final return, report the compensation paid to the
independent contractor(s) under the parties' agreement during
the short year or the compensation that is reportable
compensation on Form 1099 for the short year, whether or not
Form 1099 has been filed yet to report such compensation.
Compensation includes fees and similar payments to
independent contractors but not reimbursement of expenses
unless incidental to providing the service. 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.

TIP

Line 1. In General

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

Form 1099-MISC may be required to be issued for
payments to an independent contractor, with
compensation reported in box 7.

Report gross amounts of contributions collected in the
organization's name by fundraisers.

Part VIII. Statement of Revenue

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.

Check the box in the heading of Part VIII if Schedule O (Form
990 or 990-EZ) contains any information pertaining to this part.
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), which must add up to the amount in
column (A) for each line in Part VIII. Refer to specific instructions
in this part for completing each column.

Report on line 1 assets contributed to the organization by
another entity in the course of the entity's liquidation, dissolution,
or termination.
Report the value of noncash contributions at the time of the
donation. For example, report the FMV of a donated car at the
time the car was received as a donation.

If the organization enters an amount in column (A) for
lines 2a through 2e or lines 11a through 11c, it must
also enter a corresponding business activity code from
Appendix K. 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/reference_files_tools/2007/
naics07_6.txt, 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.

Do not net losses from uncollectible pledges from prior years,
refunds of contributions and service revenue from prior years, or
reversal of grant expenses from prior years on line 1. Rather,
report any such items as “Other changes in net assets or fund
balances” on Part XI, line 9, and explain in Schedule O.

TIP

The organization must report any contributions of
conservation easements and other qualified conservation
contributions consistently with how it reports revenue from
such contributions in its books, records, and financial
statements.

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 (for example, 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.

Reporting on line 1 according to SFAS 116 (ASC 958)
generally is acceptable (though not required) for Form 990
purposes, but the value of donated services or use of materials,
equipment, or facilities may not be reported. An organization that
receives a grant to be paid in future years should, according to
SFAS 116 (ASC 958), 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.
-36-

Instructions for Form 990

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 should
be reported on line 2, Program Service Revenue. The portion
that exceeds the FMV of the goods or services provided should
be reported on line 1b.
The portion of membership dues attributable to certain
membership benefits that are considered to be insubstantial (for
example, low-cost articles, free or discounted admission to the
organization's activities, discounts on purchases from the
organization's gift shop, free or discounted parking) may be
reported as contributions on line 1, rather than as payments for
goods or services on line 2. See Pub. 1771, for more information
on insubstantial membership benefits that need not be valued or
reported.

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.
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.
Donations of services such as the value of donated
advertising space, broadcast air time (including donated public
service announcements), or discounts on services or donations
of use of materials, equipment, or facilities, even though
reporting donated services and facilities as items of revenue and
expense is called for in certain circumstances by generally
accepted accounting principles. The optional reporting of
donated services and facilities is discussed in the instructions for
Form 990, Part III.

Line 1c. Enter the total amount of contributions received from
fundraising events, which includes, but is not limited to,
dinners, auctions, and other events conducted for the sole or
primary purpose of raising funds for the organization's exempt
activities. Report contributions received from gaming activities
on line 1f, not on line 1c.

Example 1. A hotel in a city's entertainment district donates
100 “right to use” certificates covering 15 hotel rooms a night to
disaster relief organization B. B then uses these certificates as
emergency housing in furtherance of its exempt purposes. B
should not report the value of this contribution on line 1 (or on
any other line in Part VIII), because this is a donation of services
and use of facilities to B. Similarly, if B were to auction off the
certificates as part of a fundraising event, B should not report the
value of the contributed certificates on line 1 (or on any other line
in Part VIII). Rather, it should report gross income from the
auction on Part VIII, line 8a.

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 $160, that person would be
making a contribution of the difference between the dinner's
retail value of $160 and the amount actually given. Rev. Rul.
67-246, 1967-2 C.B. 104, as distinguished by Rev. Rul. 74-348,
1974-2 C.B. 80, explains this principle in detail. See also the
instructions for lines 8a through 8c and Pub. 526, Charitable
Contributions.

Example 2. Organization C purchases 100 “right to use”
certificates (as described in Example 1) from the hotel, then
contributes them to disaster relief organization B and designates
that they be used for disaster relief purposes. B should report the
FMV of these certificates on line 1. If B were to auction off the
certificates as part of a fundraising event, then use the proceeds
for disaster relief purposes, B should report the gross income
from the auction on Part VIII, line 8a, report the FMV of the
contributed certificates in line 8b, and report the difference
between lines 8a and 8b on line 8c.

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 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.

TIP

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.
Whether a payment from a governmental unit is labeled a
“grant” or a “contract” does not determine where the payment
should be reported in Part VIII. Rather, 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.

Federated fundraising agencies must, like all other
filers, 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
Instructions for Form 990

-37-

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.

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
care to their residents (but not Medicare/Medicaid or similar
payments made on behalf of the residents).
Payments by a governmental unit to child placement or child
guidance organizations under government programs to better
serve children in the community.

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.

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) and from
gaming activities.
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 they were sold immediately after
they were received.

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 according to 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.

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 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
capitalize their collections (according to SFAS 116
(ASC 958-360-25) should not report an amount on
line 1g for works of art and other collection items donated to
them.)

Common Types of Program Service Revenue:
Medicare and Medicaid payments, and other government
payments made to pay or reimburse the organization for medical
services provided to individuals who qualify under a government
program for the services provided, and who select the service
provider. See Rev. Rul. 83-153, 1983-2 C.B. 48.
Payments for medical services by patients and their
guarantors, and
Fees and contracts from government agencies for a service,
facility, or product that primarily benefited the government
agencies.

TIP

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
(Form 990, 990-EZ, or 990-PF) to report certain
contributors and their contributions. See the
Instructions for Schedule B (Form 990, 990-EZ, or 990-PF) for
more information.

TIP

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.

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.

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.

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
-38-

Instructions for Form 990

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.

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 K. Business Activity Codes.
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/reference_files_tools/
2007/naics07_6.txt. 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 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 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 3. Enter the gross 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 fair market value. Do not deduct
investment management fees from this amount, but report these
fees on Part IX, line 11f.

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 (i). Use column (ii) 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 joint
venture, 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 fair 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. However, for
reporting sales of securities on Form 990-T, do not use the
average cost basis to determine gain or loss.

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.
Line 6a. Enter on line 6a the rental income received for the year
from investment property and any other real property rented by
the organization. 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.
Instructions for Form 990

-39-

The organization should maintain books and records to
substantiate information about 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 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,
whether incurred before, during, or after the event. In the line 1c
dinner example referred to earlier, the cost of the food and
beverages served and invitation to the dinner would be among
the items; in the 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
section 512, 513, or 514 (column (D)).

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; report all income from gaming in line 9a.
Compute the organization's gross income from fees, ticket
sales or other revenue from fundraising events.
Fundraising events include:

Fundraising events do not include:

• Dinners/dances,

• 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.

• Door-to-door sales of merchandise,
• Concerts,

Example 1. If an organization receives a donation of a
home theater system with a FMV of $5,000 at the time of
donation; sells the system for $7,500 at an auction, after having
displayed the system and its FMV (which remains $5,000) at and
before auction so that its value was known to the bidders; and
incurs $500 in costs related to selling the system at auction, it
should report the following amounts in Part VIII:
Line 1c (contributions from
fundraising events):
Line 1f (all other contributions):
Line 1g (noncash contributions):
Line 8a (gross income from
fundraising events):
Line 8a parenthetical (contributions
reported on line 1c):
Line 8b (direct expenses: $5,000
FMV on donation date + $500 in
auction costs)
Line 8c (net income from fundraising
event, line 8a minus line 8b):

• Carnivals,
• Sports events, and

Proceeds from these activities are
considered contributions and should
be reported on line 1f.

$2,500
$5,000
$5,000
$5,000
$2,500
$5,500

($500)

Example 2. If the home theater system in Example 1 sold at
auction for $2,500 instead of $7,500, and all other facts in
Example 1 remain the same, then the organization should report
the following amounts in Part VIII:

• Auctions.

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 is reported on line 2.

Line 1c (contributions from
fundraising events):
Line 1f (all other contributions):
Line 1g (noncash contributions):
Line 8a (gross income from
fundraising events):
Line 8a parenthetical (contributions
reported on line 1c):
Line 8b (direct expenses: $5,000
FMV on donation date + $500 in
auction costs)
Line 8c (net income from fundraising
event, line 8a minus line 8b):

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 services
furnished. See Example, earlier, in line 1c.
Amounts received from fundraising events when the
organization gives items of only nominal value to recipients. See
Publication 1771.

$0
$5,000
$5,000
$2,500
$0
$5,500

($3,000)

In both Example 1 and Example 2, the organization would
need to report the $5,000 value of this contribution on
Schedule M if it received over $25,000 in total noncash
contributions during the tax year.
Line 9a. Line 9a should include only gross income from
gaming activity. It should not include contributions from
gaming activity, which should be reported on line 1f.
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).

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.
-40-

Instructions for Form 990

Types of gaming include, but are not limited to:
- Bingo
- Pull tabs
- Instant bingo
- Raffles

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

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.

- Nevada Club tickets
- certain Casino nights
- certain 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

For each amount entered on lines 11a, 11b, and 11c,
the organization must also enter a corresponding
business activity code from Appendix K. Business
Activity Codes. 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/
reference_files_tools/2007/naics07_6.txt . 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.

TIP

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 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

Check the box in the heading of Part IX if Schedule O (Form 990
or 990-EZ) contains any information pertaining to this part.
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. Report any expense described in lines 1-23 in the
appropriate line; do not report such expense in line 24. Do not
report in Part IX expenses that must be reported on lines 6b, 7b,
8b, 9b, or 10b in Part VIII.

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 gaming supplies such as pull tabs, bingo cards, etc.

Column (A)—Total
Section 501(c)(3) and 501(c)(4) organizations must complete
columns (A) through (D).
All other organizations must complete column (A) but can
complete columns (B), (C), and (D).

Line 9c. Enter the difference between line 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 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.

!

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.

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 as expenses in Part IX. For purposes of Part VIII,
the organization may include as cost of donated goods their fair
market value at the time of acquisition.

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).
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

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.

Instructions for Form 990

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

-41-

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

purpose as well as advertising, the income from which is taxable
as unrelated business income.
Also include costs to secure a “grant,” or contract, to conduct
research, produce an item, or perform a program service, if the
activities are conducted to meet the grantor’s or other
contracting party’s specific needs. Do not report these costs as
fundraising expenses in column (D). Costs to solicit restricted or
unrestricted grants to provide services to the general public
should be reported in column (D).

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.

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.

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.

Column (D)—Fundraising
Fundraising expenses are the expenses incurred in soliciting
cash and noncash 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
individuals, foundations, other organizations, or governmental
units that are reported on Part VIII, line 1. This includes
expenses incurred in participating in federated fundraising
campaigns; preparing and distributing fundraising manuals,
instructions, and other materials; and preparing to solicit or
receive contributions. Report direct expenses of fundraising
events in Part VIII, line 8b, rather than in Part IX, column (D).
However, report indirect expenses of fundraising events, such
as certain advertising expenses, in Part IX, column (D) rather
than in Part VIII, line 8b.

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,

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.

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
-42-

Instructions for Form 990

providing grants or other assistance to designated foreign
organizations or foreign individuals.
If line 3 exceeds $5,000, the organization may have to
complete Part II and/or Part III of Schedule F (Form 990). See
Instructions for Schedule F for more information.

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

!

Line 4. Enter the payments made by the organization to provide
benefits to members (such as payments made by an
organization exempt under section 501(c)(8), 501(c)(9), or
501(c)(17) to obtain insurance benefits for members, or
patronage dividends paid by section 501(c)(12) organizations to
their 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, directors, trustees, key employees, and other
employees. Report such costs for officers, directors, trustees,
and key employees on Part IX, line 5; report such costs for other
disqualified persons on Part IX, line 6; and report such costs for
other employees on Part IX, lines 8 and 9.

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.

Line 5. Enter the total compensation paid to current officers,
directors, trustees, and key employees (as defined in Part
VII) for the organization's tax year. Compensation includes all
forms of income and other benefits earned or received from the
filing organization, common paymasters, and payroll/reporting
agents in return for services rendered to the filing organization,
including compensation reported on Forms W-2 and 1099,
pension plan contributions and accruals, 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.

Note. Organizations can report this information according to
Statement of Financial Accounting Standards (SFAS 116) (ASC
958) but are not required to do so. For example, an organization
that follows SFAS 116 (ASC 958) 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 domestic organizations and
domestic governments, 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 the organization reported on line 1 more than $5,000 of
grants or other assistance to any domestic organization or
to any domestic government, the organization must complete
Parts I and II of Schedule I (Form 990), Grants and Other
Assistance to Organizations, Governments, and Individuals in
the United States.

Compensation for Part IX is reported based on the
accounting method and tax year 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.

TIP

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.

Line 2. Enter the amount paid by the organization to domestic
individuals 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 domestic individuals. For
example, a grant payment to a hospital to cover the medical
expenses of a specific 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 6. Section 501(c)(3), 501(c)(4), and 501(c)(29)
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 from the filing organization, common
paymasters, and payroll/reporting agents in return for services
rendered to the filing organization, including compensation
reported on Forms W-2 and 1099, pension plan contributions
and accruals, and other employee benefits, but does not include
non-compensatory expense reimbursements or allowances.

Line 3. The organization must enter the total amount of grants
and other assistance made to foreign organizations, foreign
governments, and foreign individuals, and to domestic
organizations or domestic individuals for the purpose of

Line 7. Enter the total amount of employee salaries, wages,
fees, bonuses, severance payments, and similar amounts from

Allocating Indirect Expenses—Example
Line

(A)

5–24a

$150,000

24b Allocation of $100,000 indirect cost center expenses reported
in (C)
25

Instructions for Form 990

(B)

-43-

(C)

-

(D)

$150,000

-

(5,000)

70,000

(85,000)

10,000

$145,000

$70,000

$65,000

$10,000

Report any amounts for lobbying services provided by attorneys
on line 11d.

the filing organization, common paymasters, and payroll/
reporting agents in return for services rendered to the filing
organization that are not reported on lines 5 or 6.

Line 11c. Accounting fees. Enter the total accounting and
auditing fees charged by outside firms and individuals.

Line 8. Enter the employer's share of contributions to, or
accruals under, qualified and nonqualified pension and deferred
compensation plans for the year. The organization should
include contributions made by the filing organization, common
paymasters, and payroll/reporting agents to the filing
organization's 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, key employees, or
disqualified persons, which are reportable on line 5 or 6.

Line 11d. Lobbying fees. Enter amounts for activities intended
to influence foreign, national, state, or local legislation, including
direct lobbying and grassroots lobbying.
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.

Complete Form 5500, Annual Return/Report of
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.

TIP

Line 9. Other employee benefits. Enter contributions by the
filing organization, common paymasters, and payroll/reporting
agents to the filing organization's 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.

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. Report on line 11g
payments to payroll agents, common paymasters, and other
third parties for services provided by those third parties to the
filing organization. Report on lines 5-10, as appropriate,
payments that reimburse third parties for compensation to the
organization's officers, directors, trustees, key employees,
or other employees. Report payments to contractors for
information technology services on line 14, rather than on
line 11g.

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 whether or not 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.
If the organization is able to distinguish between fees paid for
independent contractor services and expense payments or
reimbursements to the contractor(s), report the fees paid for
services on line 11 and the expense payments or
reimbursements on the applicable lines in Part IX (including
line 24 if no other line is applicable). If the organization is unable
to distinguish between service fees and expense payments or
reimbursements, report all such amounts on line 11.

If the amount on line 11g exceeds 10% of the amount on
line 25, column (A), the organization must list the type and
amount of each line 11g expense on Schedule O (Form 990 or
990-EZ).
Line 12. Advertising and promotion 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. Include fees paid to
independent contractors for advertising, except for 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, or other supplies); telephone (cell phones 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 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.

Line 14. Information technology. Enter amounts for
information technology, including hardware, software, and
-44-

Instructions for Form 990

employees attending such conferences, conventions, and
meetings must be reported on line 17.

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 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.
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.

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 section 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
whether or not the expenses are reported on line 18 or line 24.

Properly distinguishing between payments to affiliates
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.

TIP

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 reported on this line,
the organization is required to maintain books and records to
substantiate any amount reported.

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
Instructions for Form 990

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
-45-

Costs of Activities of Not-for-Profit Organizations and State and
Local Governmental Entities that Include Fundraising, now
codified in FASB Accounting Standards Codification 958-720,
Not-for-Profit Entities-Other Expenses (ASC 958-720).

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
or for its officers, directors, trustees, key employees and
other employees. Report the costs for officers, directors,
trustees, and key employees on Part IX, line 5; report the costs
for other disqualified persons on Part IX, line 6; and report the
costs for other employees on Part IX, line 9. Report the costs for
members on Part IX, line 4, not in Part IX, line 23. Do not report
on this line property or occupancy-related insurance. Report
those expenses on line 16.

Part X. Balance Sheet

Check the box in the heading of Part X if Schedule O (Form 990
or 990-EZ) contains any information pertaining to this part.
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).

Line 24. Other expenses. Enter the types and amounts of
expenses which were not reported on lines 1 through 23. Include
expenses for medical supplies incurred by health care/medical
organizations. 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 four largest dollar amounts on
lines 24a through 24d and the total of all remaining,
miscellaneous expenses on line 24e. Do not include a separate
entry for “miscellaneous expenses,” “program expenses,” “other
expenses,” or a similar general category in lines 24a-d. If the
amount on line 24e exceeds 10% of the amount on line 25,
column (A), the organization must list the type and amount of
each line 24e expense on Schedule O (Form 990 or 990-EZ).
The organization must separately report the amount, if any, of
unrelated business income taxes that it paid or accrued
during the tax year on line 24.

Column (B)— End of year
When Schedule D (Form 990) reporting is required for any item
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 25. Total functional expenses. Section 501(c)(3) and
501(c)(4) organizations: Add lines 1 through 24e and enter
the totals on line 25 in columns (A), (B), (C), and (D).
All other organizations: Add lines 1 through 24e 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 allocated in Part IX between education and
fundraising. For instance, if the organization spent $100,000 on
joint costs and allocated 10% to education, it would report
$100,000 in line 26, column (A), $10,000 in column (B), and
$90,000 in column (D). Any costs reported here are not to be
deducted from the other lines in Part IX on which they are
reported. Do not check the box unless the organization followed
SOP 98-2 (ASC 958-720) in allocating such costs.
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), Accounting for

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 SFAS 116 (ASC 958) 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. Loans and other receivables from current
and former officers, directors, trustees, key employees,
and highest compensated employees. Report on line 5 loans
and other receivables due from current or former officers,
-46-

Instructions for Form 990

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.

directors, trustees, key employees, and former and highest
compensated employees. Section 501(c)(3), 501(c)(4), and
501(c)(29) organizations must also report on line 6 receivables
due from other disqualified persons (for purposes of section
4958, see Appendix G), and from persons described in section
4958(c)(3)(B). Section 501(c)(9) voluntary employees'
beneficiary associations (VEBAs) must also report on line 6
receivables due from their contributing employers and
sponsoring organizations (see definitions of “contributing
employers” and “sponsoring organizations” of a VEBA in the
Glossary definition of related organization). 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 loans and
other 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 12. Investments—other securities. Enter on this line the
total value 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 reportable on line 12
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 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 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 8. Inventories for sale or use. Enter the amount of
materials, goods, and supplies held for future sale or use,
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 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 10a. Land, buildings, and equipment. Enter the cost or
other basis of all land, buildings, 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 11a, 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 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 10b. Accumulated depreciation. Enter the total amount
of accumulated depreciation for 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 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 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 18. Grants payable. Enter the unpaid portion of grants
and awards that the organization has committed to pay other
organizations or individuals, whether or not the commitments
have been communicated to the grantees.

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
Instructions for Form 990

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.

-47-

certified by an independent accountant for certain types of
nonprofit organizations. SFAS 117 (ASC 958-10-15-5) 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.

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 24a, and Schedule K (Form 990).

While some states may require reporting according to SFAS
117 (ASC 958), the IRS does not. However, a Form 990 return
prepared according to SFAS 117 (ASC 958) will be acceptable
to the IRS.
Organizations that follow SFAS 117 (ASC 958). If the
organization follows SFAS 117 (ASC 958), 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.

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.

Effective for reporting years ending after December 15,
2008, FSP FAS 117-1 (now codified in ASC 958-205,
CAUTION
Not-for-Profit Entities–Presentation of Financial
Statements) addresses reporting of 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 (now codified in ASC 958-205, Not-for-Profit Entities–
Presentation of Financial Statements), it may affect the amounts
reported on lines 27 through 29.

!

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 and
other payables (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. Do not report on line 22 loans and payables
excepted from reporting on Schedule L, Part II (except for
excess benefit transactions involving receivables).
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 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.

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 payable and
secured or unsecured payables to related organizations. The
organization must also answer “Yes” to Part IV, line 11e, and
complete Schedule D (Form 990), Part X.

Organizations that do not follow SFAS 117 (ASC 958). If the
organization does not follow SFAS 117 (ASC 958), 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 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.

Line 30. Capital stock or 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.

Net Assets and Fund Balances

Financial Accounting Standards Board (FASB) Statement of
Financial Accounting Standards 117, Financial Statements of
Not-for-Profit Organizations (SFAS 117), now codified in FASB
Accounting Standards Codification 958, Not-for-Profit Entities
(ASC 958), provides standards for external financial statements
-48-

Instructions for Form 990

Line 9. Enter the total amount of other changes in net assets or
fund balances during the year. Amounts to report here include
losses on uncollectible pledges, refunds of contributions and
program service revenue, reversal of grant expenses, any
difference between FMV and book value of property given as an
award or grant, and any other changes in net assets or fund
balances not listed in lines 5-8. Itemize these changes in
Schedule O (Form 990 or 990-EZ) and check the box in the
heading of Part XI.

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, endowment, accumulated income, 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 endowment funds, temporarily restricted
endowment funds, and quasi-endowment funds as well as
balances of any other funds not reported on lines 30 and 31.

Line 10. Combine the amounts on lines 3 through 9. The total
must equal the amount reported on Part X, line 33, column (B).

Part XII. Financial Statements and
Reporting
Check the box in the heading of Part XII if Schedule O (Form
990 or 990-EZ) contains any information pertaining to this part.
Line 1. Accounting method. Indicate the method of
accounting used in preparing this return. See Part D, earlier.
Provide an explanation in Schedule O (Form 990 or 990-EZ) (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 33. Total net assets or fund balances. For
organizations that follow SFAS 117 (ASC 958), 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.

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 tax year 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 or 990-EZ).

Part XI. Reconciliation of Net Assets

Check the box in the heading of Part XI if Schedule O (Form 990
or 990-EZ) contains any information pertaining to this part.
Line 1. Enter the amount of total revenue reported on Part VIII,
line 12, column (A).
Line 2. Enter the amount of total expenses reported on Part IX,
line 25, column (A).
Line 3. Enter the difference between lines 1 and 2.
Line 4. Enter the amount of net assets or fund balances at the
beginning of year reported on Part X, line 33, column (A). This
amount should be the same amount reported on Part X, line 33,
column (B) for the prior year’s return.

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 according to the Act.

Line 5. Report the net unrealized gains or losses on investments
reported in the organization's audited financial statements (or
other financial statements). This amount represents the change
in market value of investments that were not sold or exchanged
during the tax year.
Line 6. Report the value of services or use of facilities donated
to the organization (net of services or use of facilities donated by
the organization) reported as income or expense in the financial
statements.

Line 3b. Required audits. If “Yes” to line 3a, indicate whether
the organization has undergone the required audit or audits.
Answer “Yes,” if the audit was completed or in progress during
the organization's tax year. If the answer to line 3b is “No,”
explain in Schedule O (Form 990 or 990-EZ) why the
organization has not undergone any required audits and
describe any steps taken to undergo such audits.

Line 8. Report the net prior period adjustments during the tax
year reported in the financial statements. Prior period
adjustments are corrections of errors in financial statements of
prior years, or changes in accounting principles applied to such
years. The errors may include math errors, mistakes in applying
accounting principles, or oversight or misuse of facts that existed
at the time the financial statements were prepared.

Instructions for Form 990

-49-

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.
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 section 6104.
The time needed to complete and file this form and related schedules will vary depending on individual circumstances. The
estimated average times are:
Form

Recordkeeping

Learning about the law
or the form

Preparing
the
form

Copying, assembling,
and sending the form
to the IRS

990

76 hr., 3 min.

29 hr., 20 min.

33 hr., 43 min.

32 min.

990-EZ

29 hr., 10 min.

11 hr., 33 min.

14 hr., 24 min.

32 min.

Schedule A (Form 990 or 990-EZ)

31 hr., 5 min.

14 hr., 23 min.

15 hr., 32 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)

14 hr., 49 min.

1 hr., 23 min.

1 hr., 41 min.

-----

Schedule D (Form 990)

27 hr., 30 min.

35 min.

1 hr., 4 min.

-----

Schedule E (Form 990 or 990-EZ)

5 hr., 30 min.

53 min.

1 hr., 1 min.

-----

Schedule F (Form 990)

7hr., 53 min.

6 min.

13 min.

-----

Schedule G (Form 990 or 990-EZ)

24 hr., 23 min.

24 min.

48 min.

-----

Schedule H (Form 990)

63 hr., 22 min.

35 min.

1 hr., 39 min.

-----

Schedule I (Form 990)

5 hr., 58 min.

18 min.

24 min.

-----

Schedule J (Form 990)

5 hr., 44 min.

2 hr., 5 min.

2 hr., 16 min.

-----

Schedule K (Form 990)

13 hr., 9 min.

4 hr., 40min.

5 hr., 5 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 or 990-EZ)

43 min.

-----

-----

-----

15 hr., 32 min.

2 hr., 22 min.

2 hr., 45 min.

-----

Schedule R (Form 990)

Comments and suggestions. We welcome your comments about these instructions and your suggestions for future editions.
You can send your comments to us at the following address:
Internal Revenue Service
Tax Forms and Publications Division
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including
the area code, in your correspondence.
You can email us at [email protected]. Please put “Forms Comment” on the subject line. You can also send us comments from
www.irs.gov/formspubs/, select “Comment on Tax Forms and Publications” under “Information about.”
Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your
comments as we revise our tax products.
Do not send your return to this address. Instead, see the General Instructions, Section E, When, Where, and How to File, earlier, for
the location for filing your return.

-50-

Instructions for Form 990

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 (for example, under constructive
ownership rules of section 267(c)), by a given person, such as the
organization's current or former officers, directors, trustees, 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, program-related investments, other
investments, or maintaining offices, employees, or agents in particular
regions outside the United States.

Applicable tax-exempt organization

A section 501(c)(3), 501(c)(4), or 501(c)(29) 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.

ASC 740

See FIN 48 (ASC 740).

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 according to 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.

Instructions for Form 990

-51-

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 or event 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, all revenue and expenses
associated with satellite, Internet, and progressive or event bingo generally
should be included under pull tabs. Certain bingo games within a hybrid
gaming event (such as progressive or event bingo) can also qualify as bingo if
the individual game meets the preceding definition of 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 under the same plan of financing; and
3. Payable from the same source of funds.
See Regulations section 1.150-1(c).

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,
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, or greater-than-35% owner. Such transactions do not include charitable
contributions to tax-exempt organizations.
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).
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 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 organization, sometimes referred to as the parent organization, that holds
a group exemption letter for one or more subordinate organizations under
its general supervision and control.

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.

-52-

Instructions for Form 990

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 X, line 12 and Schedule M (Form 990), Noncash
Contributions, line 10).

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).

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

Include collections, as described in SFAS 116 (ASC 958–360–20), of works of
art, historical treasures, and other similar assets held for public exhibition,
education, or research in furtherance of public service.

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.

Instructions for Form 990

-53-

Conservation easement

A restriction (granted in perpetuity) on the use that may be made of real
property granted exclusively for conservation purposes. Conservation
purposes include preserving land areas for outdoor recreation by, or for the
education of, the general public; protecting a relatively natural habitat of fish,
wildlife, or plants, or a similar ecosystem; preserving open space, including
farmland and forest land, where such preservation will yield a significant public
benefit and is either for the scenic enjoyment of the general public or pursuant
to a clearly defined federal, state, or local governmental conservation policy;
and preserving a historically important land area or a certified historic structure.
For more information see section 170(h) and Notice 2004-41, 2004-2 C.B. 31.

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, but discounts provided on sales of goods in the
ordinary course of business should not be reported as contributions. Neither
donations of services (such as the value of donated advertising space,
broadcast air time, or discounts on services) nor donations of use of materials,
equipment, or facilities should be reported as contributions. For purposes of
Form 990, a distribution to a section 501(c)(3) organization from a split interest
trust (for example, charitable remainder trust, charitable lead trust) is reportable
as a contribution. See also cash contributions and noncash contributions.

-54-

Instructions for Form 990

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, elect,
or approve or veto the appointment or election of, if such power includes a
continuing power to appoint, elect, or approve or veto the appointment or
election of, periodically or in the event of vacancies) a majority of the nonprofit
organization's directors or trustees, or a majority of members who elect a
majority of 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). For this purpose, a “managing partner” is a
partner designated as such under the partnership agreement, or regularly
engaged in the management of the partnership even though not so designated.
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. A person's beneficial interest in a trust shall be determined
in proportion to that person's actuarial interest in the trust as of the end of the
tax year. 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

Instructions for Form 990

An organization controlled by a controlling organization under section
512(b)(13). A controlled entity may be a nonprofit organization. For the
definition of control in this context, see section 512(b)(13)(D) and Regulations
section 1.512(b)-1(l)(4) (substituting “more than 50%” for “at least 80%” in the
regulation, for purposes of this definition). Controlled entities are a subset of
related organizations. For purposes of Form 990, controlled entities do not
include disregarded entities of the filing organization.

-55-

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. Control in this context means (i) in the case of a
corporation, ownership (by vote or value) of more than 50 percent of the stock
in such corporation, (ii) in the case of a partnership, ownership of more than 50
percent of the profits interests or capital interests in such partnership, or (iii) in
any other case, ownership of more than 50 percent of the beneficial interests in
the entity. Section 318 (relating to constructive ownership of stock) shall apply
for purposes of determining ownership of stock in a corporation. Similar
principles shall apply for purposes of determining ownership of interests in any
other entity.

Core form

The Form 990, Return of Organization Exempt From Income Tax Under section
501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except for private
foundations). It does not include any schedules that may be attached to Form
990.

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.

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).

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).

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,
qualified or nonqualified, or subject to a substantial risk of forfeiture. However,
a deferral of compensation that causes an amount to be deferred from the
calendar year ending with or within the tax year to a date that is not more than 2
½ months after the end of the calendar year ending with or within the tax year is
not treated as deferred compensation for purposes of Form 990, if such
compensation is currently reported as reportable compensation. Deferred
compensation may or may not be included in reportable compensation for
the current year.

Director

See director or trustee.

Director or trustee

Unless otherwise provided, a member of the organization's governing body at
any time during the tax year, 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. If the 5-year period ended within the organization's tax
year, the organization may treat the person as a disqualified person for the
entire tax year. 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.

-56-

Instructions for Form 990

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 FMV 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 (for example, single-member limited
liability company of which the organization is the sole member). See
Regulations sections 301.7701-2 and 3. A disregarded entity generally must
use the EIN of its sole member. An exception applies to employment taxes: for
wages paid to employees of a disregarded entity, the disregarded entity must
file separate employment tax returns and use its own EIN on such returns. See
Regulations sections 301.6109-1(h) and 301.7701-2(c)(2)(iv).

Domestic government

See governmental unit.

Domestic individual

An individual who lives or resides in the United States and is not a foreign
individual.

Instructions for Form 990

-57-

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 IRS 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 Section 5.01 of 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.

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 temporarily restricted endowment, permanent endowment, and
quasi-endowment. See also SFAS 117 (ASC 958-205-45).

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, whether or not the funds are reported on
Part X, line 21, and whether or not 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.

-58-

Instructions for Form 990

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

Exempt bond

See tax-exempt bond.

Fair market value (FMV)

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 (see Rev. Rul. 2013-17 regarding same-sex marriage), 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 (ASC 740)

Financial Accounting Standards Board (FASB) Interpretation No. 48,
Accounting for Uncertainty in Income Taxes -an interpretation of FASB
Statement No. 109, now codified in FASB Accounting Standards Codification
740, Income Taxes (ASC 740). 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 (ASC 740).

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.

Instructions for Form 990

-59-

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

An organization that is not a domestic organization. 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
a domestic organization located outside the United States.

Fundraising

See fundraising activities.

Fundraising activities

Activities undertaken to induce potential donors to contribute money,
securities, services, materials, facilities, other assets, or time. They include
publicizing and conducting fundraising campaigns; maintaining donor mailing
lists; conducting fundraising events, preparing and distributing fundraising
manuals, instructions, and other materials; 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 or event bingo), Texas Hold-Em Poker, 21, and other
card games involving betting, 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. See Pub. 3079,
Tax-Exempt Organizations and Gaming.

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 1 or more 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 trustee or trustees of a trust (sometimes referred to as the
board of trustees).
-60-

Instructions for Form 990

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

For purposes of Part IX, lines 1-3; Schedule F (Form 990); and Schedule I
(Form 990), includes awards, prizes, contributions, noncash assistance, 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); the payment of any benefit by a section 501(c)(9) voluntary
employees' beneficiary association (VEBA) to employees of a sponsoring
organization or contributing employer, if such payment is made under the terms
of the VEBA and in compliance with section 505; or payments or other
assistance to affiliates or branch offices that are not organized as legal entities
separate from the filing organization.

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).

Gross receipts

The total amounts the organization received from all sources during its tax year,
without subtracting any costs or expenses. See Appendix B. How to Determine
Whether an Organization's Gross Receipts Are Normally $50,000 (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, Rev. Proc.
96-40, 1996-2 C.B. 301, 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, Section I.
Group Return, earlier, 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, whose aggregate
reportable compensation from the organization and related organizations
is greater than $100,000 for the calendar year ending with or within the
organization's tax year. These employees should be reported in Part VII,
Section A of Form 990.

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/hospital facility

For purposes of Schedule H (Form 990), Hospitals, a hospital, or hospital
facility, 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 facility that is
operated through a disregarded entity or a joint venture treated as a
partnership for federal income tax purposes. It does not include hospital
facilities that are located outside the United States. It also does not include
hospital facilities 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).

Instructions for Form 990

-61-

Hospital organization

An organization which operates one or more hospital facilities.

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 collections.

Independent contractor

An individual or organization that receives compensation for providing 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 four 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), 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.
4. Neither the member, nor any family member of the member, was
involved 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.
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, 1980-2 C.B. 34); 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 before entering
into the contract.
-62-

Instructions for Form 990

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; 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 (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 about acts, bills, resolutions, or similar items, or action 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).

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.

Instructions for Form 990

-63-

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
donated use of materials, facilities, or equipment.

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 (for example, Signature Block, principal officer in
Heading), a person elected or appointed to manage the organization's daily
operations at any time during the tax year, 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, 1982-1 C.B. 476, 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, 1957-1 C.B. 65.

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 (ASC 958-205-45).

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.
-64-

Instructions for Form 990

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 the Heading on page 1 of Form 990 (but not for the purposes
of the Signature Block or other parts of the Form 990), 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 and applications for grants
or other assistance), provision of advice and consulting regarding solicitation of
contributions, and direct solicitation of contributions, such as soliciting
restricted or unrestricted grants to provide services to the general public.
However, professional fundraising does not include services provided by the
organization's employees in their capacity as employees (except as provided
in the instructions for Part I, line 16a), nor does professional fundraising 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).

Instructions for Form 990

-65-

Publicly traded securities

Generally, include common and preferred stocks, bonds (including
governmental obligations such as bonds and Treasury bills), mutual fund
shares, and other investments 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 X, 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 or event 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.
However, certain bingo games within a hybrid gaming event (such as
progressive or event bingo) can also qualify as bingo if the individual game
meets the preceding definition of bingo.

Qualified 501(c)(3) bond

A tax-exempt bond, the proceeds of which are used by a section 501(c)(3)
organization to advance 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 are not
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 “qualified organization” means an organization which is-(a) a governmental unit described in section 170(c)(1);
(b) a publicly supported charitable organization described in sections 501(c)(3)
and 170(b)(1)(A)(vi) or section 509(a)(2) (see the instructions for Parts II and III
of Schedule A (Form 990 or 990-EZ)); or
(c) a supporting organization described in sections 501(c)(3) and 509(a)(3)
that is controlled by a governmental unit or a publicly supported charitable
organization.
In addition, a qualified organization must have a commitment to protect the
conservation purposes of a qualified conservation contribution, and have the
resources to enforce the restrictions.
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 will yield a significant public benefit and is for the scenic
enjoyment of the general public or is pursuant to a clearly delineated federal,
state, or local governmental conservation policy; or
4. The preservation of an historically important land area or a certified
historic structure.
-66-

Instructions for Form 990

See section 170(h) for additional information, including special rules about 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,
Political Organization Report of Contributions and Expenditures, 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 (ASC 958-205-45).

Reasonable compensation

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

Reasonable effort

A reasonable amount of effort in information gathering that the organization is
expected to undertake in order to provide information requested on the Form
990. 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.

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).

Instructions for Form 990

-67-

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. However, if the filing organization is a trust
that has a bank or financial institution trustee that is also the trustee of another
trust, the other trust is not a Brother/Sister related organization of the filing
organization on the ground of common control by the bank or financial
institution trustee.
Supporting/Supported: an organization that claims to be at any time during
the tax year, or that is classified by the IRS at any time during the tax year, as
(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.
Sponsoring Organization of a VEBA: an organization that establishes or
maintains a section 501(c)(9) voluntary employees’ beneficiary association
(VEBA) during the tax year. A sponsoring organization of a VEBA also includes
an employee organization, association, committee, joint board of trustees, or
other similar group of representatives of the parties which establish or maintain
a VEBA. Although a VEBA must report a sponsoring organization as a related
organization, a sponsoring organization should not report a VEBA as a related
organization, unless the VEBA is related to the sponsoring organization in
some other capacity described in this definition.
Contributing Employer of a VEBA: an employer that makes a contribution or
contributions to the VEBA during the tax year. Although a VEBA must report a
contributing employer as a related organization, a contributing employer should
not report a VEBA as a related organization, unless the VEBA is related to the
contributing employer in some other capacity described in this definition.
The organization must determine its related organizations for purposes of
completing Form 990, Parts VI (Governance), VII (Compensation), VIII
(Statement of Revenue) and X (Balance Sheet), Schedule D (Form 990),
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, 1991-1 C.B. 524.

Reportable compensation

In general, the aggregate compensation that is reported (or required to be
reported, if greater) on Form W-2, box 1 or 5 (whichever amount is greater);
and/or Form 1099-MISC, box 7, for the calendar year ending with or within the
organization's tax year. 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 (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.
-68-

Instructions for Form 990

SFAS 116

Statement of Financial Accounting Standards No. 116, Accounting for
Contributions Received and Contributions Made, now codified in FASB
Accounting Standards Codification 958, Not-for-Profit Entities (ASC 958).

SFAS 117

Statement of Financial Accounting Standards No. 117, Financial Statements of
Not-for-Profit Organizations, now codified in FASB Accounting Standards
Codification 958, Not-for-Profit Entities (ASC 958).

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).

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 FMV of the organization's net assets during
the year, whether or not 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 FMV 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 begun in a prior year
that, when combined, comprise more than 25% of the FMV 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 (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) whether or
not the sales or transfers are governed by section 721 or section 351, whether
or not the transferor received 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; and
Transfers of assets pursuant to a reorganization in which the organization is
a surviving entity.
The following types of situations are not considered significant dispositions of
net assets for purposes of Schedule N, Part II:
The change in composition of publicly traded securities held in an exempt
organization's passive investment portfolio;
Asset sales made in the ordinary course of the organization's exempt
activities to accomplish the organization's exempt purposes, for instance, gross
sales of inventory;
Grants or other assistance made in the ordinary course of the organization's
exempt activities to accomplish the organization's exempt purposes, for
instance, the regular charitable distributions of a United Way or other federated
fundraising organization;
A decrease in the value of net assets due to market fluctuation in the value of
assets held by the organization; and
Transfers to a disregarded entity of which the organization is the sole
member.

Sponsoring organization

Instructions for Form 990

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.

-69-

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 claiming status on Form 990 or otherwise under 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. A Type II supporting organization is controlled or
managed by the same persons that control or manage its supported
organization(s). 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 section 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.

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.

Temporarily restricted endowment

Includes endowment funds established by donor-restricted gifts that are
maintained to provide a source of income for either a specified period of time or
until a specific event occurs (see SFAS 117 (ASC 958-205-45)), as well as all
other temporarily restricted net assets held in a donor-restricted endowment,
including unappropriated income from permanent endowments that is not
subject to a permanent restriction.

Top financial official

The person who has ultimate responsibility for managing the organization's
finances, for example, the treasurer or chief financial officer.

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
president, CEO, or executive director).

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.
-70-

Instructions for Form 990

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 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, for instance, a
member of the organization's governing body 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).

Instructions to Form 990

-71-

Appendix of Special
Instructions to Form
990
Contents
A
B
C
D
E
F
G
H
I
J
K

Exempt Organizations Reference Chart
How to Determine Whether an Organization's Gross Receipts Are Normally $50,000 (or $5,000) or Less
Special Gross Receipts Tests for Determining Exempt Status of Section 501(c)(7) and Section 501(c)(15) Organizations
Public Inspection of Returns
Group Returns—Reporting Information on Behalf of the Group
Disregarded Entities and Joint Ventures—Inclusion of Activities and Items
Section 4958 Excess Benefit Transactions
Forms and Publications To File or Use
Use of Form 990 or 990-EZ To Satisfy State Reporting Requirements
Business Activity Codes
Contributions

-72-

Instructions for Form 990

Appendix A. Exempt
Organizations
Reference Chart
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)

Trusts described in section 4049 of the Employer Retirement Income Security
Act

501(c)(24)

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)

National Railroad Retirement Investment Trust

501(c)(28)

Qualified Nonprofit Health Insurance Issuers

501(c)(29)

Religious and Apostolic Associations

501(d)

Cooperative Hospital Service Organizations

501(e)

Instructions for Form 990

-73-

Cooperative Service Organizations of Operating Educational Organizations

501(f)

Amateur Sports Organizations

501(j)

Child Care Organizations

501(k)

Charitable Risk Pools

501(n)

Political Organizations

527

Appendix B. How to
Determine Whether an
Organization's Gross
Receipts Are Normally
$50,000 (or $5,000) or
Less

To figure whether an organization has to
file Form 990-EZ (or Form 990), apply the
$50,000 (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 tax year (including short
years) without subtracting any costs or
expenses.

Do not use the definition of
gross receipts described in
CAUTION
Appendix C. 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, 6c, 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.

$50,000 Gross Receipts
Test

To determine whether an organization's
gross receipts are normally $50,000 or
less, apply the following test. An
organization's gross receipts are
considered normally to be $50,000 or
less if the organization is:
1. Up to a year old and has received,
or donors have pledged to give, $75,000
or less during its first tax year;
2. Between 1 and 3 years old and
averaged $60,000 or less in gross
receipts during each of its first 2 tax
years; or
3. Three years old or more and
averaged $50,000 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 $50,000 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, if it chooses not to file
Form 990 or 990-EZ. In general,
organizations excepted from filing Form
990 or 990-EZ because of low gross
receipts must submit Form 990-N. See
filing exceptions described in General
Instructions, Section B. Organizations
Not Required To File Form 990 or
990-EZ, earlier.

$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

-74-

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)
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
Instructions for Form 990

Investment income (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 (the
sale of the clubhouse).
College fraternities or sororities
or other organizations that
CAUTION
charge 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) 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.
The alternate test does not apply
if any employee of the mutual
CAUTION
insurance company or a
member of the employee's family is an
employee of another company that is
exempt under section 501(c)(15) (or
would be exempt if this provision did not
apply).

!

Gross receipts. To determine
whether a section 501(c)(15)
organization satisfies either of the above
tests described in Appendix C, figure
gross receipts by adding:
Instructions for Form 990

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 those 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, the names and addresses of
contributors listed on Schedule B are not
required to be made available for public
inspection. All other information reported
on Schedule B, including the amount of
contributions, the description of noncash
contributions, and any other information,
is required to be made available for
public inspection unless it clearly
identifies the contributor. 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, Request for Public
Inspection or Copy of Exempt or Political
Organization IRS Form, to request:
A copy of an exempt or political
organization's return, report, notice, or
exemption application; or
-75-

An inspection of a return, report,
notice, or exemption application at an
IRS office.
The IRS can provide copies of exempt
organization returns on DVD. Requesters
can order the complete set (for example,
all Forms 990 and 990-EZ or all Forms
990-PF filed for a year) or a partial set by
state or by month. If you are ordering a
partial set on DVD, indicate the format
(Alchemy or raw), state(s), and month(s)
you are ordering. Sample DVD requests
are not available for individual states.
DVDs and sample DVDs are not
available for individual exempt
organizations. Complete information,
including the cost, is available on the IRS
website. Search Copies of Scanned EO
Returns Available at http://www.irs.gov/
Charities & Non-Profits/Copies of
Scanned Returns Available.
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
are made available. See public
inspection and distribution of applications

for tax exemption and annual information
returns of tax-exempt organizations,
later. Generally, Form 8871 and Form
8872 are available for inspection and
printing at IRS.gov under the Charities &
Nonprofits tab.
Note that a section 527 political
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, Section H, Failure-to-File
Penalties, earlier, also apply to section
527 political organizations (Rev. Rul.
2003-49, 2003-201 I.R.B. 903).

TIP

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
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 a 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 (Form
1023, 1023-EZ, 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.
If there is no prescribed
application form, see
CAUTION
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 (both the original
and amended return are subject to the
public inspection requirements).
An exact copy of Form 990-T if one is
filed by a section 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
statements, 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, statements,
attachments, and supporting documents
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.
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 the 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
-76-

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 (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
Instructions for Form 990

Provide 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, (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 Must notify the requester of the prepayment policy and the amount due within 7
payment in advance is required,
days from the date of the request's receipt.
Receives consent from an individual making a request,

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.
Instructions for Form 990

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.)

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 for 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
-77-

granted for filing the 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 statements for each local or
subordinate organization included in the
group return, the local or subordinate
organization receiving the request can
omit any statements 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.
When a 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, and
charge the requester for copying and
actual postage costs, 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,
earlier.
The requester has the option of
requesting from the central or parent
organization, at its principal office,
inspection or copies of group returns filed
by the central or parent organization. The
central or parent organization must fulfill
the requests in the time and manner
specified in Special Rules Relating to
Public Inspection and Special Rules
Relating to Copies, earlier.
Failure to comply. Any person who
does not comply with the public
inspection requirements will be assessed
a penalty of $20 for each day that
inspection was not permitted, up to a
maximum of $10,000 for each return. The
penalties for failure to comply with the

public inspection requirements for
applications are the same as those for
annual returns, except that the $10,000
limitation does not apply (sections
6652(c)(1)(C) and (D)). Any person who
willfully fails to comply with the public
inspection requirements for annual
returns or exemption applications will be
subject to an additional penalty of $5,000
(section 6685).

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 also 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 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 Web
page established and maintained by
another entity. The document will be
considered widely available only if:
The 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 Web page.
-78-

Reliability and accuracy. In order for
the document to be widely available
through an Internet posting, the entity
maintaining the Web page must have
procedures for ensuring the reliability and
accuracy of the document that it posts on
the page and must take reasonable
precautions to prevent alteration,
destruction or accidental loss of the
document when posted on its page. In
the event that a posted document is
altered, destroyed or lost, the entity must
correct or replace the document.
Notice requirement. If a tax-exempt
organization has made its application for
tax exemption and/or an annual
information return widely available, it
must notify any individual requesting a
copy where the documents are available
(including the address on the Web, if
applicable). If the request is made in
person, the organization must provide the
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 EO Technical office 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 is 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, whether or not the EO
Technical office 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
Instructions for Form 990

the campaign would not be in the public
interest by submitting a signed
application to the EO Technical office.
See Rev. Proc. 2014-4, 2014-1 I.R.B.
125, as modified, and Rev. Proc. 2014-8,
2014-1 I.R.B. 242, as modified.
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 EO Technical office
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 subordinate 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
or 990-EZ). 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.
Instructions for Form 990

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.
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,
4a-b, 5, and 6a-c.
The following is a list of other special
instructions for group returns:
1. Header Item B. Final return/
terminated. If the central organization
is terminating its group exemption and
filing its final group return, do not check
the Final return/terminated box. Refer to
Rev. Proc. 80-27, 1980-1 C.B. 677, as
modified, for procedures for terminating
the group exemption.
2. Header Item C. Name. Enter the
name of the group exemption. Note that
the group exemption may have a different
name than the central organization's
name.
3. 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.
4. Header Items E, F, J. Enter
information for the central organization
only.
5. Header Item H. Group returns.
Enter the four-digit group exemption
number (GEN). Also, if not all
subordinate organizations are included in
the group return, then attach a list (not in
Schedule O) showing the name, address,
and EIN of each subordinate organization
included in the group return.
6. Header Item K. Form of
organization. Check “other” if the group
has more than one form of organization.
7. Header Item L. Year of
formation. Leave blank for group return.
-79-

8. Header Item M. State of legal
domicile. Leave blank for group return.
9. Part IV, lines 14b–19, 21–22,
and 29 dollar thresholds. Apply the
dollar thresholds for the aggregate data
for the group as a whole, not subordinate
by subordinate.
10. Part IV, line 20. Hospitals.
Answer “Yes,” if any affiliate included
within the group return operated a
hospital facility.
11. Part VI, line 2. Relationships
among officers, directors, trustees,
and key employees. Describe on
Schedule O (Form 990 or 990-EZ) 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.
12. 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.
13. Part VI, line 5. Significant
diversion of assets. In determining
whether a diversion of a subordinate’s
assets meets the 5%/$250,000 reporting
threshold, consider only the total assets
and gross receipts of that subordinate,
not of the parent or other subordinates.
14. Part VI, line 20. Person who
possesses books and records. Identify
the person who possesses the
information furnished by the subordinate
organizations used in compiling the
group return.
15. 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
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).

16. 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.
17. Part XII, 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).
18. 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 11g.
19. Schedule A (Form 990 or
990-EZ). Parts II and III. Support
statements. Report aggregate data for
all subordinates with the public charity
status corresponding to Parts II or III.
20. Schedule A (Form 990 or
990-EZ), Parts IV through VI. In
addition to Part I in paragraph 18 above,
if any section 509(a)(3) organizations are
among the subordinates in the group
return, also complete the relevant
sections of Part IV and V. If an answer in
Part IV requires more information with
respect to any section 509(a)(3)
organizations, then answer with respect
to those organizations and provide that
additional information in Part VI. For
instance, if the group includes 50 section
509(a)(3) organizations, and one of them
does not list all of its supported
organizations by name in its governing
documents, then answer “No,” to Part IV,
Section A, line 1, and explain in Part VI. If
the group includes more than one Type III
non-functionally-integrated supporting
organization, then provide aggregate
data in Part V.
21. 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.
22. 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 the groups.
23. Schedule D (Form 990). Part X.
Other liabilities. The filing organization
can summarize that portion, if any, of the
FIN 48 (ASC 740) 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.
24. 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 the hospitals. In
Part V, Section A, list each of the
organization’s hospital facilities
separately. List in Section A the name
and EIN of the subordinate hospital
organization that operates the hospital
facility. Complete separate Sections B
and C for each of the hospital facilities or
facility reporting groups listed in
Section A.
25. Schedule J (Form 990).
Compensation from related
organizations. See the Appendix E, Part
VII instructions, earlier.
26. Schedule L (Form 990 or
990-EZ). Transactions with Interested
Persons. In Schedule L (Form 990 or
990-EZ), Part IV, report only transactions
between a subordinate organization and
its interested persons—not transactions
between a subordinate organization and
the interested persons of other
subordinates. In determining whether a
transaction between the subordinate and
its interested persons meets the financial
reporting thresholds of Schedule L, Part
IV, consider only the payments between
the subordinate and its interested
persons, not payments between
interested persons and the parent or
other subordinates.
27. 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.
-80-

28. Schedule R (Form 990). Related
organizations. See the instructions for
Schedule R (Form 990) to determine
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), the organization must report its
transactions with the related organization
in Part V, as described in the instructions
for that Part.

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 (but
see TIP below for treatment of
disregarded entities as separate entities
for employment tax purposes). Therefore,
financial and other information applicable
to a disregarded entity must be reported
as the parent organization's 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 disregarded entity is
deemed to have the same accounting
period as its parent for federal tax
purposes. 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
Instructions for Form 990

(Form 990 or 990-EZ), Political
Campaign and Lobbying Activities.
A disregarded entity is treated
as a separate entity for purposes
of employment tax and certain
excise taxes. For wages paid after
January 1, 2009, a disregarded entity is
required to use its name and employer
identification number (EIN) for reporting
and payment of employment taxes.

TIP

A single-member LLC is treated
generally as a disregarded entity
CAUTION
of its sole member/owner unless
it elects to be treated as a separate
association. It may elect to be treated
separately by filing Form 8832, Entity
Classification Election, or by claiming
tax-exempt status in its own right (by
filing a Form 1023, 1023-EZ, or 1024
application for recognition of tax-exempt
status or a Form 990, 990-EZ, 990-N, or
990-T using its own name and EIN).
Once the IRS determines a
single-member LLC to be exempt, it is no
longer eligible to be treated as a
disregarded entity until the determination
of exemption is revoked and the LLC
subsequently files a Form 8832 electing
disregarded entity status. Similarly, a
single-member LLC that claims
exemption but has not been determined
to be exempt is not eligible to be treated
as disregarded until the claim is
withdrawn or rejected and the LLC files a
Form 8832 electing disregarded entity
status. See Reg. section 301.7701-3(c)
(1)(v)(A).

!

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 instructions 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 statements. The organization
should not answer “Yes,” to this question
merely because it received audited
financial statements of one or more
disregarded entities, if the audited
Instructions for Form 990

financial statements of the organization
were 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) in this
Appendix, later.
6. Part IV, lines 35–36.
Transactions with related
organizations. See Appendix F
instructions for Schedule R (Form 990) in
this Appendix, later.
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, whether or not 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. 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 1a-9. 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 a
person can be 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, earlier.
10. Part VI, Section B, lines 10a–
16b. 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 or 990-EZ)
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.
-81-

12. Part XII, lines 2a-2b. Financial
statements. If the organization included
financial information from its disregarded
entity or entities in its financial
statements, but did not consolidate any
other entity's information in its financial
statements, it should check the box for
“Separate basis” but not the box for
“Consolidated basis” or “Both
consolidated and separate basis”.
13. Part XII, 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.
14. 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.
15. 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.
16. 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, and report the joint venture’s

revenue, expenses, and assets, 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,
according to 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 in this Appendix, later.
2. Part I, line 7a-7b. Unrelated
business income. Include the
organization's distributive 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 in this
Appendix, later.
4. Part IV, line 7. Conservation
easements. See instructions for
Schedule D in this Appendix, later.
5. Part IV, lines 14–16. Activities
outside the United States. See
instructions for Schedule F in this
Appendix, later.
6. Part IV, lines 17–19.
Fundraising and gaming. See
instructions for Schedule G in this
Appendix, later.
7. Part IV, line 20. Hospitals. See
instructions for Schedule H in this
Appendix, later.
8. Part IV, lines 21–22. Grants in
the United States. See instructions for
Schedule I in this Appendix, later.
9. Part IV, lines 26–28. Loans,
grants, and business transactions
involving interested persons. See
instructions for Schedule L in this
Appendix, later.
10. Part IV, line 32. Disposition of
25% of assets. See instructions for
Schedule N in this Appendix, later.
11. Part IV, lines 34–37. Related
organizations and unrelated
partnerships. See instructions for
Schedule R in this Appendix, later.

12. Part V, line 3a. Unrelated
business income. Include the
organization's distributive 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 in this
Appendix, later.
15. Parts VIII, IX, and X, Financial
statements. Report in accordance with
the organization's books and records.
16. Part XII. 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
the 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. Report activities, expenses,
and revenue of hospital facilities and
other programs operated by any joint
venture, to the extent of the
organization's proportionate interest in
the joint venture. See the instructions for
Schedule H, Part IV, to determine how to
report an organization's interest in joint
ventures and management companies in
Part IV.
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
-82-

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.
25. Schedule L (Form 990 or
990-EZ), Parts II–IV. Loans, grants,
and business transactions involving
interested persons. Report loans,
grants, and business transactions
between the organization and a joint
venture, if the joint venture is an
interested person for purposes of
Schedule L, and if the transaction meets
the applicable reporting thresholds
described in the Schedule L instructions.
Also report certain joint ventures with
interested persons as provided in the
Schedule L, Part IV instructions, as
business transactions themselves.
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.

Instructions for Form 990

Applicable Tax-Exempt
Organization

These rules only apply to certain
applicable section 501(c)(3), 501(c)(4),
and 501(c)(29) organizations. An
applicable tax-exempt organization is
a section 501(c)(3), 501(c)(4), or 501(c)
(29) organization that is tax exempt under
section 501(a), or was 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), 501(c)(4), or 501(c)
(29) 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

Most section 501(c)(3), 501(c)(4), or
501(c)(29) 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 for the following
Instructions for Form 990

organizations, along with certain family
members and 35% controlled entities
associated with them:
for a transaction involving a donor
advised fund, a donor or donor advisor
of that donor advised fund,
for a donor advised fund sponsoring
organization, an investment advisor of
the sponsoring organization, and
for a supported organization of a
section 509(a)(3) supporting
organization, the disqualified persons of
the section 509(a)(3) supporting
organization.
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 ($105,000 in 2009,
$110,000 in 2010-2011, and $115,000 in
2012-2014) and who does not hold the
executive or voting powers just
mentioned; is not a family member of a
disqualified person; and is not a
substantial contributor;
Tax-exempt organizations described in
section 501(c)(3); and
Section 501(c)(4) organizations for
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.
-83-

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) for 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 for more than one
organization in the same transaction.

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 the 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 (FMV).
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 the 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 for these
payments occurs on the last day of the
disqualified person’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, except
that taxes on certain transactions
between supporting organizations and
their substantial contributors apply to
transactions occurring on or after July 25,
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
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
-84-

into account in determining the value of
compensation (except for certain
economic benefits that are disregarded,
as discussed in What benefits are
disregarded? in this Appendix, later).
Items of compensation include:
All forms of cash and noncash
compensation, including salary, fees,
bonuses, severance payments, and
deferred and noncash compensation;
The payment of liability insurance
premiums for, or the payment or
reimbursement by the organization of
taxes or certain expenses under section
4958, unless excludable from income as
a de minimis fringe benefit under section
132(a)(4). (A similar rule applies in the
private foundation area.) Inclusion in
compensation for purposes of
determining reasonableness under
section 4958 does not control inclusion in
income for income tax purposes;
All other compensatory benefits,
whether or not included in gross income
for income tax purposes;
Taxable and nontaxable fringe
benefits, except fringe benefits described
in section 132; 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 before 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
before 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
Instructions for Form 990

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 before 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
Instructions for Form 990

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 FMV
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 FMV, 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. Before 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
-85-

authorized body are taken, and approval
of records as reasonable, accurate, and
complete within a reasonable time
thereafter.
Special rebuttable presumption rule
for nonfixed payments. As a general
rule, in the case of a nonfixed payment,
no rebuttable presumption arises until the
exact amount of the payment is
determined, or a fixed formula for
calculating the payment is specified, and
the three requirements creating the
presumption have been satisfied.
However, if the authorized body
approves an employment contract with a
disqualified person that includes a
nonfixed payment (for example,
discretionary bonus) with a specified cap
on the amount, the authorized body 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 IRS 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. In those 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 the
disqualified persons are jointly and
severally liable for the taxes.
To avoid the imposition of the 200%
tax, a disqualified person must correct
the excess benefit transaction during the
taxable period. The taxable period begins
on the date the transaction occurs and
ends on the earlier of the date the
statutory notice of deficiency is issued or
the section 4958 taxes are assessed.
This 200% tax 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 for 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 the facts, the
transaction would be an excess benefit
transaction. Knowing does not mean
having reason to know. The organization
manager ordinarily will not be considered
knowing if, after full disclosure of the
factual situation to an appropriate
professional, the organization manager
relied on the professional's reasoned
written opinion on matters within the
professional's expertise or if the manager
relied on the fact that the requirements
for the rebuttable presumption of
reasonableness have been satisfied.
Participation by an organization manager
is willful if it is voluntary, conscious, and
intentional. An organization manager's
participation is due to reasonable cause if
the manager has exercised responsibility
on behalf of the organization with
ordinary business care and prudence.

Correcting an Excess
Benefit Transaction

A disqualified person corrects an
excess benefit transaction by undoing
the excess benefit to the extent possible,
and by taking any additional measures
necessary to place the organization in a
financial position not worse than that in
which it would be if the disqualified
person were dealing under the highest
fiduciary standards. The organization is
not required to rescind the underlying
agreement; however, the parties may
need to modify an ongoing contract for
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 IRS 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:

-86-

The FMV of the property on the date
the property is returned to the
organization, or
The FMV 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 that difference.

Churches and Section
4958

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

Revenue Sharing
Transactions

Proposed intermediate sanction
regulations were issued in 1998. The
proposed regulations had special
provisions covering “any transaction in
which the amount of any economic
benefit provided to or for the use of a
disqualified person is determined in
whole or in part by the revenues of one or
more activities of the organization. .” —
so-called revenue-sharing transactions.
Rather than setting forth additional rules
on revenue-sharing transactions, the final
regulations reserve this section.
Consequently, until the 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.

Revocation of
Exemption and Section
4958

Section 4958 does not affect the
substantive standards for tax exemption
under section 501(c)(3), 501(c)(4), or
501(c)(29), 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
Instructions for Form 990

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.

Appendix H. Forms and
Publications To File or
Use
How To Get Forms and
Publications
Internet. You can access the
IRS website at IRS.gov 24 hours
a day, 7 days a week to:
Download forms, including talking tax
forms, instructions, and publications.
Order IRS products online.
Research your tax questions online.
Search publications online by topic or
keyword.
Use the online Internal Revenue Code,
Regulations, or other official guidance.
View Internal Revenue Bulletins (IRBs)
published in the last few years.
Sign up to receive local and national
tax news by email.
Phone. Many services are
available by phone.
Ordering forms, instructions, and
publications. Call 1-800-TAX FORM
(1-800-829-3676) to order current-year
forms, instructions, and publications, and
prior-year forms and instructions. You
should receive your order within 10 days.
Instructions for Form 990

TTY/TDD equipment. If you have
access to TTY/TDD equipment, call
1-800-829-4059 to ask tax questions or
to order forms and publications. The
TTY/TDD number is for individuals who
are deaf, hard of hearing, or have a
speech disability.
Mail. You can send your order
for forms, instructions, and
publications to the address
below. You should receive a response
within 10 days after your request is
received.
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613

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 or 990-EZ).
Supplemental Information to Form 990 or
990-EZ.
Schedule R (Form 990). Related
Organizations and Unrelated
Partnerships.

-87-

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 720. Quarterly Federal Excise Tax
Return.
The Patient-Centered Outcomes
Research Institute fee is
CAUTION
imposed on issuers of specified
health insurance policies (section 4375)
and plan sponsors of applicable
self-insured health plans (section 4376)
for policy and plan years ending on or
after October 1, 2012. See Form 720 and
section 4376 for more information.

!

In addition to various federal excise taxes
that are paid with the filing of Form 720,
the Patient-Centered Outcomes
Research Institute fee that is imposed on
issuers of specified health insurance
policies and plan sponsors of applicable
self-insured health plans is payable
annually and reported on the Form 720
that is filed for the second quarter of each
year, which is due no later than July 31 of
the calendar year immediately following
the last day of the policy year or plan year
to which the fee applies.
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.
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.
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 1023-EZ. Streamlined 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 the 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 5471. Information Return of U.S.
Persons With Respect To Certain
Foreign Corporations.

Form 8718. User Fee for Exempt
Organization Determination Letter
Request.

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 8821. Tax Information
Authorization.

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 4562. Depreciation and
Amortization.

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 4720. Return of Certain Excise
Taxes Under Chapters 41 and 42 of the
Internal Revenue Code.

Form 8328. Carryforward Election of
Unused Private Activity Bond Volume
Cap.

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.

-88-

Form 8822-B. Change of Address or
Responsible Party—Business. 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 8940. Request for Miscellaneous
Determination, Under Section 507,
509(a), 4940, 4942, 4945, and 6033 of
the Internal Revenue Code.
Form 8963. Report of Health Insurance
Provider Information.
Form SS-4. Application for Employer
Identification Number.
FinCEN Form 114. Report of Foreign
Bank and Financial Accounts.

Helpful Publications
Pub. 15. (Circular E), Employer's Tax
Guide.
Trust Fund Recovery Penalty.
If certain excise, income, social
CAUTION
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

!

Instructions for Form 990

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) for
more details, including the definition of
responsible persons.
Pub. 15-A. Employer's Supplemental
Tax Guide.
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. How to Appeal an IRS
Decision on Tax-Exempt Status.
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. Tax-Exempt Organizations
and Gaming.
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.
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.
Instructions for Form 990

Pub. 4303. A Donor's Guide to Vehicle
Donations.
Pub. 4386. Compliance Checks.
Pub. 4573. Group Exemptions.
Pub. 4630. Exempt Organizations
Products & Services Navigator.

Appendix I. Use of Form
990 or 990-EZ To Satisfy
State Reporting
Requirements
Some states and local governmental
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 $50,000
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 statements;
-89-

A report on the financial statements by
an independent accountant; and
Answers to additional questions and
other information.
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 or 990-EZ).
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 in this
Appendix, 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 that 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 Audit and Accounting Guide,
Not-for-Profit Entities (2010),
supplemented, as applicable, by the
Standards of Accounting and Financial
Reporting for Voluntary Health and
Welfare Organizations issued jointly by
the National Health Council, Inc., the
National Assembly of Voluntary Health
and Social Welfare Organizations, and
the United Way of America (1998).
Donated services and facilities. Even
though donated services and facilities
may be reported as items of revenue and
expense in certain circumstances, many
states and the IRS do not permit the
inclusion of those amounts in Parts VIII
and IX of Form 990, Part I of Form
990-EZ, or (except for donations by a
governmental unit) in Schedule A (Forms
990 and 990-EZ). The optional reporting
of donated services and facilities is
discussed in the instructions for Part III
for Form 990.
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.
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.

Appendix J.
Contributions

This Appendix discusses certain federal
tax rules that apply to exempt
organizations and donors for
contributions. See also Pub. 526,
Charitable Contributions, and Pub. 1771,
Charitable Contributions— Substantiation
and Disclosure Requirements.

Schedule B (Form 990, 990-EZ, or
990-PF). Many organizations that file
Form 990, 990-EZ, or 990-PF must file
Schedule B to report on tax-deductible
and non-tax-deductible contributions.
See Schedule B and its instructions to
determine whether Schedule B must be
filed. See also the Schedule B
instructions for the public inspection rules
applicable to that form.
Solicitation of Nondeductible Contribution. See the instructions to Form
990, Part V, line 6a-6b, for rules on public
notice of non-deductibility when soliciting
nondeductible contributions.
Keeping Fundraising Records for
Tax-Deductible Contributions. A
section 501(c) organization that is eligible
to receive tax-deductible contributions
under section 170(c) must keep sample
copies of its fundraising materials, such
as:
Dues statements,
Fundraising solicitations,
Tickets,
Receipts, or
Other evidence of payments received
in connection with fundraising activities.

IF....

THEN....

The
organization
advertises its
fundraising
events,

It must keep samples of the
advertising copy.

The
organization
uses radio,
television, or
Internet to
solicit
contributions,

It must keep samples of scripts,
transcripts, printouts of e-mails
and Web pages, or other
evidence of solicitations in the
media.

The
organization
uses outside
fundraisers,

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

For each fundraising event, the
organization must keep records to show
the portion of any payment received from
patrons that is not deductible; that is, the
retail value of the goods or services
received by the patrons. See Disclosure
statement for quid pro quo contributions,
later.
Noncash Contributions.
Form 990 Schedules. An organization
may be required to file Schedule M to
report certain noncash (property)
contributions; see the instructions for
Schedule M on who must file. Also, an
organization that files Schedule B must
report certain information on noncash
contributions.
Dispositions of donated property.
If an organization receives a charitable
contribution of property and within three
years sells, exchanges, or otherwise
disposes of the property, the organization
may need to file Form 8282, Donee
Information Return. See Form 990, Part
V, lines 7c and 7d.
Donated property over $5,000. If the
organization received from a donor a
partially completed Form 8283, Noncash
Charitable Contributions, the donee
organization generally should complete
the Form 8283 and return it so the donor
can get a charitable contribution
deduction. The organization should keep
a copy for its records. See Form 8283 for
more details.
Qualified intellectual property. An
organization described in section 170(c)
(except a private foundation) that
receives or accrues net income from a
qualified intellectual property contribution
must file Form 8899, Notice of Income
from Donated Intellectual Property. See
Form 990, Part V, line 7g. The
organization must file Form 8899 for any
tax year that includes any part of the
10-year period beginning on the date of
contribution but not for any tax years in
which the legal life of the qualified

-90-

intellectual property has expired or the
property failed to produce net income.
A donee organization reports all
income from donated qualified
intellectual property as income other than
contributions (for example, royalty
income from a patent). A donee is not
required to report as contributions on
Form 990 (including statements) any of
the additional deductions claimed by
donors under section 170(m)(1). See
Pub. 526, Charitable Contributions.
Motor vehicles, boats, and
airplanes. Special rules apply to
charitable contributions of motor
vehicles, boats, or airplanes with a
claimed value of more than $500. See
Form 990, Part V, line 7h; section 170(f)
(12); Pub. 4302, A Charity’s Guide to
Vehicle Donations; and the Instructions
for Form 1098-C, Contributions of Motor
Vehicles, Boats, and Airplanes.
Substantiation and Disclosure
Requirements for Charitable
Contributions.
Recordkeeping for cash, check, or
other monetary charitable gifts. To
deduct a contribution of a cash, check, or
other monetary gift (regardless of the
amount), a donor must maintain a bank
record or a written communication from
the donee organization showing the
donee's name, date, and amount of the
contribution. See section 170(f)(17). In
the case of a lump-sum contribution
(rather than a contribution by payroll
deduction) made through the Combined
Federal Campaign or a similar program
such as a United Way Campaign, the
written communication must include the
name of the donee organization that is
the ultimate recipient of the charitable
contribution. In the case of a text
message contribution, the donor's phone
bill meets the section 170(f)(17)
recordkeeping requirement of a reliable
written record if it shows the name of the
donee organization and the date and
amount of contribution.
Acknowledgment to substantiate
charitable contributions. A donee
organization should be aware that a
donor of a charitable contribution of $250
or more (including a contribution of
unreimbursed expenses) cannot take an
income tax deduction unless the donor
obtains the organization’s
acknowledgment to substantiate the
charitable contribution. See section
170(f)(8) and Regulations section
1.170A-13(f). A charitable organization
that receives a payment made as a
contribution is treated as the donee
organization for this purpose even if the
organization (according to the donor’s
instructions or otherwise) distributes the
amount received to one or more charities.

Instructions for Form 990

The organization's acknowledgment
must:
1. Be written.
2. Be contemporaneous.
3. State the amount of any cash it
received.
4. State:
a. Whether the organization gave the
donor any intangible religious benefits
(no valuation needed).
b. Whether the organization gave the
donor any goods or services in return for
the donor’s contribution (a quid pro quo
contribution).
5. Describe goods or services the
organization:
a. Received (no valuation needed).
b. Gave (good faith estimate of value
needed).
If the organization accepts a
contribution in the name of one of its
activities or programs, then indicate the
organization's name in the
acknowledgment as well as the
program's name. For example: “Thank
you for your contribution of $300 to
(organization's name) made in the name
of our Special Relief Fund program. No
goods or services were provided in
exchange for your contribution.”
Similarly, if a domestic organization
owns and controls a domestic
disregarded entity, and the disregarded
entity receives a contribution, then
indicate the organization's name in the
acknowledgment as well as the
relationship with the disregarded entity.
For example: “Thank you for your
contribution of $300 to (organization's
name) made in the name of (name of
disregarded entity), which is treated as a
disregarded entity of (organization's
name) for federal tax purposes. No
goods or services were provided in
exchange for your contribution.” See
Notice 2012-52, 2012-35 I.R.B. 317.
Exception. The written
acknowledgment need not include a
good faith estimate of value for goods or
services given to the donor if they are:
1. Goods or services with
insubstantial value.
2. Certain membership benefits.
3. Goods or services described in (1)
or (2) given to the employees of a donor
organization or the partners of a donor
partnership.
4. Intangible religious benefits.
These exceptions are defined below.
Disclosure statement for quid pro
quo contributions. If the organization
receives a quid pro quo contribution of
more than $75, the organization must
Instructions for Form 990

provide a disclosure statement to the
donor. See section 6115.
The organization’s disclosure
statement must:
1. Be written.
2. Estimate in good faith the value of
the organization’s goods or services
given in return for the donor’s
contribution.
3. Describe, but need not value,
certain goods or services given to the
donor’s employees or partners.
4. Inform the donor that a charitable
contribution deduction is limited as
follows:
Donor’s contribution
Less
The organization’s money, goods, and
services given in return
Equals
Donor’s deductible charitable
contribution.
Exceptions: No disclosure statement
is required if the organization gave only
the following:
1. Goods or services with
insubstantial value,
2. Certain membership benefits,
3. Goods or services described in (1)
or (2) given to the employees of a donor
organization or the partners of a donor
partnership, or
4. Intangible religious benefits.
These exceptions are defined below.
See also Regulations sections 1.170A-1,
1.170A-13, and 1.6115-1.
Certain goods or services disregarded for substantiation and disclosure
purposes.
Goods or services with
insubstantial value. Generally, under
section 170, the deductible amount of a
contribution is determined by taking into
account the fair market value (FMV),
not the cost to the charity, of any benefits
that the donor received in return.
However, the cost to the charity may be
used in determining whether the benefits
are insubstantial. See below.
Cost basis. If a taxpayer makes a
payment of $52 or more to a charity and
receives only token items in return, the
items have insubstantial value if they:
Bear the charity’s name or logo, and
Have an aggregate cost to the charity
of $10.40 or less (low-cost article amount
of section 513(h)(2)).
Fair market value basis. If a
taxpayer makes a payment to a
charitable organization in a fundraising
campaign and receives benefits with a
FMV of not more than 2% of the amount
of the payment, or $104, whichever is
less, the benefits received have
-91-

insubstantial value in determining the
taxpayer’s contribution.
The dollar amounts given above are
applicable to tax year 2014 under Rev.
Proc. 2013-35, sec. 3.28, 2013-47 I.R.B.
537. They are adjusted annually for
inflation.
When a donee organization provides
a donor only with goods or services
having insubstantial value under Rev.
Proc. 2013-35 (and any successor
documents), the contemporaneous
written acknowledgment may indicate
that no goods or services were provided
in exchange for the donor’s payment.
Certain membership benefits. Other
goods or services that are disregarded
for substantiation and disclosure
purposes are annual membership
benefits offered to a taxpayer in
exchange for a payment of $75 or less
per year that consist of:
1. Any rights or privileges that the
taxpayer can exercise frequently during
the membership period such as:
a. Free or discounted admission to
the organization's facilities or events,
b. Free or discounted parking.
2. Admission to events that are:
a. Open only to members, and
b. Within the low-cost article
limitation, per person.
Example 1. E offers a basic
membership benefits package for $75.
The package gives members the right to
buy tickets in advance, free parking, and
a gift shop discount of 10%. E’s $150
preferred membership benefits package
also includes a $20 poster. Both the
basic and preferred membership
packages are for a 12-month period and
include about 50 productions. E offers F,
a patron of the arts, the preferred
membership benefits in return for a
payment of $150 or more. F accepts the
preferred membership benefits package
for $300. E’s written acknowledgment
satisfies the substantiation requirement if
it describes the poster, gives a good faith
estimate of its FMV ($20), and disregards
the remaining membership benefits.
Example 2. In Example 1, if F
received only the basic membership
package for its $300 payment, E’s
acknowledgment need state only that no
goods or services were provided.
Example 3. G Theater Group
performs four plays. Each play is
performed twice. Non-members can
purchase a ticket for $15. For a $60
membership fee, however, members are
offered free admission to any of the
performances. H makes a payment of
$350 and accepts this membership
benefit. Because of the limited number of
performances, the membership privilege

cannot be exercised frequently.
Therefore, G’s acknowledgment must
describe the free admission benefit and
estimate its value in good faith.
Certain goods or services provided
to donor’s employees or partners.
Certain goods or services provided to
employees of donor organizations or
partners of donor partnerships may be
disregarded for substantiation and
disclosure purposes. Nevertheless, the
donee organization's disclosure
statement must describe the goods or
services. A good faith estimate of value is
not needed.
Example. Museum J offers a basic
membership benefits package for $40. It
includes free admission and a 10% gift
shop discount. Corporation K makes a
$50,000 payment to J and in return, J
offers K’s employees free admission, a
t-shirt with J’s logo that costs J $4.50,
and a 25% gift shop discount. Because
the free admission is a privilege that can
be exercised frequently and is offered in
both benefit packages, and the value of
the t-shirts is insubstantial, Museum J's
disclosure statement need not value or
mention the free admission benefit or the
t-shirts. However, because the 25% gift
shop discount to K’s employees differs
from the 10% discount offered in the
basic membership benefits package, J's
disclosure statement must describe the
25% discount, but need not estimate its
value.

Definitions.

Substantiation. It is the responsibility
of the donor:
To value a donation, and
To obtain an organization's written
acknowledgment substantiating the
donation.
There is no prescribed format for the
organization's written acknowledgment of
a donation. Letters, postcards, or
computer-generated forms may be
acceptable. The acknowledgment must,
however, provide sufficient information to
substantiate the amount of the deductible
contribution. The organization may either:
Provide separate statements for each
contribution of $250 or more, or
Furnish periodic statements
substantiating contributions of $250 or
more.
Separate contributions of less than $250
are not subject to the requirements of
section 170(f)(8), whether or not the sum
of the contributions made by a taxpayer
to a donee organization during a tax year
equals $250 or more.
Contemporaneous. A written
acknowledgment is contemporaneous if
the donor obtains it on or before the
earlier of:

The date the donor files the original
return for the tax year in which the
contribution was made; or
The due date (including extensions) for
filing the donor’s original return for that
year.
Substantiation of payroll
contributions. An organization may
substantiate an employee’s contribution
by deduction from its payroll by:
A pay stub, Form W-2, or other
document showing a contribution to a
donee organization, together with
A pledge card or other document from
the donee organization that shows its
name. For contributions of $250 or more,
the document must state that the donee
organization provides no goods or
services for any payroll contributions.
The amount withheld from each payment
of wages to a taxpayer is treated as a
separate contribution.
Substantiation of payments to a
college or university for the right to
purchase tickets to athletic events.
The right to purchase tickets for an
athletic event is valued at 20% of the
payment.
Example. When a taxpayer pays
$312.50 for the right to purchase tickets
for an athletic event, the right is valued at
$62.50. The remaining $250 is a
charitable contribution that the taxpayer
must substantiate.
Substantiation of matched
payments. If a taxpayer’s payment to a
donee organization is matched by
another payor, and the taxpayer receives
goods or services in consideration for its
payment and some or all of the matching
payment, those goods or services will be
treated as provided in consideration for
the taxpayer’s payment and not in
consideration for the matching payment.
Disclosure statement. An
organization must provide a written
disclosure statement to donors who
make a “quid pro quo contribution” in
excess of $75 (section 6115). This
requirement is separate from the written
substantiation acknowledgment a donor
needs for deductibility purposes. While,
in certain circumstances, an organization
may be able to meet both requirements
with the same written document, an
organization must be careful to satisfy the
section 6115 written disclosure statement
requirement in a timely manner because
of the penalties involved.
Quid pro quo contribution. A quid
pro quo contribution is a payment that is
made both as a contribution and as a
payment for goods or services provided
by the donee organization.
Example. A donor gives a charity
$100 in consideration for a concert ticket
valued at $40 (a quid pro quo
contribution). In this example, $60 would
be deductible. Because the donor’s
-92-

payment exceeds $75, the organization
must furnish a disclosure statement even
though the taxpayer’s deductible amount
does not exceed $75. Separate
payments of $75 or less made at different
times of the year for separate fundraising
events will not be aggregated for
purposes of the $75 threshold.
Good faith estimate. An organization
may use any reasonable method in
making a good faith estimate of the value
of goods or services provided by that
organization in consideration for a
taxpayer’s payment to that organization.
A good faith estimate of the value of
goods or services that are not generally
available in a commercial transaction
may be determined by reference to the
FMV of similar or comparable goods or
services. Goods or services may be
similar or comparable even though they
do not have the unique qualities of the
goods or services that are being valued.
Goods or services. Goods or
services include:
Cash,
Property,
Services,
Benefits, and
Privileges.
In consideration for. A donee
organization provides goods or services
in consideration for a taxpayer’s payment
if, at the time the taxpayer makes the
payment to the donee organization, the
taxpayer receives, or expects to receive,
goods or services in exchange for that
payment.
Goods or services a donee
organization provides in consideration for
a payment by a taxpayer include goods
or services provided in a year other than
the year in which the donor makes the
payment to the donee organization.
Intangible religious benefits.
Intangible religious benefits are provided
only by organizations organized
exclusively for religious purposes.
Examples include:
Admission to a religious ceremony,
and
De minimis tangible benefits, such as
wine provided in connection with a
religious ceremony.
Penalties. A charity that knowingly
provides a false substantiation
acknowledgment to a donor may be
subject to the penalties under section
6701 and/or section 7206(2) for aiding
and abetting an understatement of tax
liability.
Charities that fail to provide the
required disclosure statement for a quid
pro quo contribution of more than $75 will
incur a penalty of $10 per contribution,
not to exceed $5,000 per fundraising
event or mailing. The charity may avoid
the penalty if it can show that the failure
Instructions for Form 990

was due to reasonable cause (section
6714).

Appendix K. Business
Activity Codes

The codes listed in this Appendix K (see
next page) 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

Instructions to Form 990

NAICS website at http://
www.census.gov/eos/www/naics/
reference_files_tools/2007/
naics07_6.txt.html. 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.

-93-

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.

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

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

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

-94-

Instructions for Form 990

Index
$10,000–per-item exception 26
$10,000–per-related organization
exception 26
35% controlled entity 17, 51
A
Accountable plan 19, 51
Accountant 49
Accounting:
Fees 44
Period 5
Accounting fees 44
Accounting method 49
Accounting period 5, 8
Accounts payable 47
Accounts receivable 46
Accrual 5
Activities 11
Activities conducted outside the United
States 51
Activities outside the United States 51
Address:
Change in 9
Website 9
Address Change 8
Administrative 18
Advance ruling period 4
Advertising 44
Affiliate/affiliates 45, 81
Expenses 45
Payments 45
Purchases 45
State or national organizations 45
Affiliated organizations 83
Allocations:
Grants, and 11
Alternate test 75
Amended Return 8
Description of amendment 6
Name change amendment 6
Annual information return 76
Anti-abuse rule 75
Appendix:
Appendix A, Exempt Organizations
Reference Chart 73
Appendix B, How to Determine
Whether an Organization's Gross
Receipts Are Normally $50,000 (or
$5,000) or Less 74
Appendix C, Special Gross Receipts
Tests for Determining Exempt
Status of Section 501(c)(7) and
501(c)(15) Organizations 74
Appendix D, Public Inspection of
Returns 75

Instructions for Form 990

Appendix E, Group Returns—
Reporting Information on Behalf of
the Group 79
Appendix F, Disregarded Entities and
Joint Ventures—Inclusion of
Activities and Items 80
Appendix G, Section 4958 Excess
Benefit Transactions 82
Appendix H, Forms and Publications
to File or Use 87
Appendix I, Use of Form 990 or
990-EZ To Satisfy State Reporting
Requirements 89
Appendix J, Contributions 90
Appendix K, Business Activity
Codes 93
Applicable tax-exempt organization 51,
83
Application for recognition of
exemption 87
Application pending 9
Art 12, 51
Articles of incorporation 20
ASC 740 51
Assessments 37
Asset(s):
Net 48
Total 48
Assistance to individuals 43
Attachments 8
Attorney 10
Audit 51, 81
Audit committee 18, 51
Audited financial statements 12, 51
Audit guides 89
Automatic revocation 7
B
Backup withholding 15
Balance sheet 46
Bank account 15
Bank or financial institution trustee
Exception 30
Benefits:
Disregarded 30
Employee 44
Members 43, 85
Membership 39
Bingo 41, 52
Black lung benefit trust 4
Board-designated endowment 52
Bond issue 39, 52
Bonds, tax-exempt 48
Bonus 85
Books and records 5
Books of account 5
Book value 47
Business activities 38
-95-

Business code 39
Business relationship 20, 52
C
Calendar year 5
Capital contributions 17
Capital gains 39
Capital stock accounts 48
Capital surplus 49
Cash 46
Cash contributions 52
Cash receipts and disbursements 5
Central organization 7, 52
CEO 20
CEO, executive director, or top
management official 52
Certified historic structure 52
Change of address 88
Changes in net assets 89
Charitable risk pools 2
Child care organizations 2
Children 93
Church 3, 53
Church-affiliated organization 4
Closely held stock 53
Club 17
Code(s) 3
Collectibles 53
Collections of works of art, historical
treasures, and other similar assets 53
College 75
Committee 4
Compensation 13, 24, 35, 53, 79
Current officers 43
Disqualified persons 25, 43
Former officers 24
Other persons 25
Reasonable 84
Reportable 26
Table 31
Compilation (compiled financial
statements) 12, 53
Completing the heading 8
Conflict of interest policy 53
Conflicts of interest policy 21, 22
Conservation easement 12, 54
Consolidated financial statement 12, 80
Contemporaneous 84
Contracts 85
Contributing employer 61, 68
Contributions 12, 36, 38, 54
Disclosure statement 16
Donation of services 37
Donor advised funds 84
Government 37
Government grants 37
Membership dues 11, 37
Noncash 38

Contributions (Cont.)

Nondeductible 16
Quid pro quo 16
Contributor 2
Contributors, Schedule of 38
Control 14, 55
Controlled entity 14, 55
Controlling organization:
Section 512(b)(13) 3
Controlling organization under section
512(b)(13) 56
Cooperative service organizations 2
Copies 7
Core form 56
Corporation 9
Credit counseling 12
Credit counseling services 56
Current year 56
D
Debt management plan services 12, 56
Defeasance escrow 39, 56
Deferred charges 47
Deferred compensation 56
Deferred revenue 47
Defined benefit plan 30
Nonqualified 30
Qualified 30
Defined contribution plan:
Qualified 30
De minimis fringe benefit 84
Dependent care assistance 32
Depreciation 45
Determination letter 3
Direct expenses 40
Director 13, 56
Director or trustee 25, 56
Disclosure 15
Conflict of interest 22
Disqualified person(s) 20
Excess business holdings 16
Statement 16
Disclosure of excess business
holdings 16
Disqualified person 56
Disqualified persons 83
Disregarded benefits 30, 31
Disregarded entities 7, 27, 80
Disregarded entity or entities 57
Dissolution 81
Distributions 43
Dividends 38
Document retention and destruction
policy 23
Domestic government 57
Domestic individual 57
Domestic organization 58
Donations 37
Of services 37
Of use of materials, equipment or
facilities 37
Of vehicles 16

Donor advised fund 58
Donor advised fund(s):
Disqualified person 83
Donor advisor 16
Exceptions 86
Excess benefit transaction 84
Grants 84
Sponsoring organization 3
Donor advisor 58
Donor contributions:
Acknowledgment 16
Dues 37
Club 32
Membership 39, 45
Paid to affiliates 45
E
Economic benefit 83
Disregarded 85
Nontaxable fringe benefits 85
EIN 58
Electronic filing 6
Email subscription 2
Employee 58
Employee(s) 25
Employee benefit plan 4
Employee benefits 44
Employees, key 25
Employer identification number (EIN):
Disregarded entities 81
Section 501(c)(9) organizations 9
Employment tax return 6
Endowment 12, 58
EO Determinations 11
e-Postcard (see also Form 990–N) 74
Equipment 47
Escrow or custodial account 48, 58
Estates 36
Estimate, reasonable 10
Excess benefit transaction 59, 82–84
Churches 86
Correction 86
Donor advised funds 86
Excess payment 86
Excise tax 85
Insufficient payment 86
Revenue sharing transactions 86
Revocation of exemption 86
Section 4958 82
Excess business holdings 16
Excise taxes 85
Executive director 23
Exempt bond 59
Exempt function 38
Exempt organizations, types of 73
Exempt purposes 11, 21, 41
Expenses 39
Allocating indirect 42
Direct 40
Functional 41
Fundraising 40, 42
-96-

Indirect expenses 42
Management and general 42
Occupancy 45
Political 12
Postage 44
Printing 44
Program service 41, 46
Shipping 44
Supplies 44
Telephone 44
Extension of time to file 6
F
Facility/facilities 11
Facts and circumstances 78
Fair market value 84
Fair market value (FMV) 59
Family:
Family member 83
Family member, family relationship 59
Federal unemployment tax (FUTA) 87
Federated fundraising agencies 37
Federated fundraising organizations 43
Fees 44
Accounting 44
Copies 77
Fundraising 44
Government agencies 38
Initiation 75
Legal 44
Membership 74
Registration 38
Figuring gross receipts 74
FIN 48 80
FIN 48 (ASC 740) 59
Final return 6, 8
Financial account 15
Financial statements 49, 59
Fiscal year 5, 59
Five highest compensated
employees 25
Fixed payment 85
Foreign 15
Accounts 15
Organization 4
Foreign government 59
Foreign individual 60
Foreign organization 60
Form 8963, Report of Health Insurance
Provider Information 88
Forms:
FinCEN Form 114, formerly known as
Form TD F 90–22.1, Report of
Foreign Bank and Financial
Accounts 88
Form 1023, Application for
Recognition of Exemption Under
Section 501(c)(3) 87
Form 1023-EZ, Streamlined
Application for Recognition of

Instructions for Form 990

Forms (Cont.)

Exemption Under Section 501(c)
(3) of the Internal Revenue Code. 87
Form 1024, Application for
Recognition of Exemption Under
Section 501(a) 87
Form 1040, U.S. Individual Income
Tax Return 88
Form 1041, U.S. Income Tax Return
for Estates and Trusts 88
Form 1065, U.S. Return of Partnership
Income 4
Form 1096, Annual Summary and
Transmittal of U.S. Information
Returns 88
Form 1098 series 88
Form 1120–POL, U.S. Income Tax
Return for Certain Political
Organizations 88
Form 1128, Application To Adopt,
Change or Retain a Tax Year 88
Form 2848, Power of Attorney and
Declaration of Representative 88
Form 3115, Application for Change in
Accounting Method 88
Form 3520, Annual Return To Report
Transactions with Foreign Trusts
and Receipt of Certain Foreign
Gifts 88
Form 4506, Request for Copy of Tax
Return 88
Form 4506–A, Request for Public
Inspection or Copy of Exempt or
Political Organization IRS Form 88
Form 4562, Depreciation and
Amortization 88
Form 4720, Return of Certain Excise
Taxes Under Chapters 41 and 42
of the Internal Revenue Code 88
Form 5471, Information Return of U.S.
Persons With Respect to Certain
Foreign Corporations 88
Form 5500, Annual Return/Report of
Employee Benefit Plan 88
Form 5578, Annual Certification of
Racial Nondiscrimination for a
Private School Exempt From
Federal income Tax. 88
Form 5768, Election/Revocation of
Election by an Eligible Section
501(c)(3) Organization To Make
Expenditures To Influence
Legislation 88
Form 7004, Application for Automatic
Extension of Time to File Certain
Business Income Tax, Information,
and Other Returns 88
Form 720, Quarterly Federal Excise
Tax Return 87
Form 8038 series, Tax Exempt
Bonds 88
Form 8274, Certification by Churches
and Qualified Church-Controlled

Instructions for Form 990

Organizations Electing Exemption
from Employer Social Security and
Medicare Taxes 88
Form 8282, Donee Information
Return 88
Form 8283, Noncash Charitable
Contributions 88
Form 8300, Report of Cash Payments
Over $10,000 Received in a Trade
or Business 88
Form 8328, Carryfoward Election of
Unused Private Activity Bond
Volume Cap 88
Form 8718, User Fee for Exempt
Organization Determination Letter
Request 88
Form 8821, Tax Information
Authorization 88
Form 8822-B, Change of Address or
Responsible Party—Business 88
Form 8868, Application for Extension
of Time to File an Exempt
Organization Return 88
Form 8870, Information Return for
Transfers Associated With Certain
Personal Benefit Contracts 88
Form 8871, Political Organization
Notice of Section 527 Status 88
Form 8872, Political Organization
Report of Contributions and
Expenditures 88
Form 8886, Reportable Transaction
Disclosure Statement 88
Form 8886–T, Disclosure by
Tax-Exempt Entity Regarding
Prohibited Tax Shelter
Transaction 88
Form 8899, Notice of Income From
Donated Intellectual Property 88
Form 8940, Request for
Miscellaneous Determination,
Request for Miscellaneous
Determination, under Section 507,
509(a), 4940, 4942, 4945, and
6033 of the Internal Revenue
Code 88
Form 926, Return by a U.S. Transferor
of Property to a Foreign
Corporation 87
Form 940, Employer's Annual Federal
Unemployment (FUTA) Tax
Return 87
Form 941, Employer's Quarterly
Federal Tax Return 87
Form 943, Employer's Annual Tax
Return for Agricultural
Employees 87
Form 990–BL, Information and Initial
Excise Tax Return for Black Lung
Benefit Trusts and Certain Related
Persons 4
-97-

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 3
Form 990–PF, Return of Private
Foundation or Section 4947(a)(1)
Nonexempt Charitable Trust
Treated as a Private Foundation 4
Form 990–T, Exempt Organization
Business Income Tax Return 87
Form 990–W, Estimated Tax on
Unrelated Business Taxable
Income for Tax-Exempt
Organizations 87
Form SS-4, Application for Employer
Identification Number 88
Form W-2, Wage and Tax
Statement 87
Forms and publications 15
Foundations 26
Fringe benefits 85
De minimis 84
Nontaxable 85
Functional expenses 41
Allocating indirect 42
Fundraising 42
Management and general 42
Program service 41
Fund Balances 48, 49
Fundraising 37, 60
Activities 13
Events 37
Expenses 42
Fees 44
Records for tax deductible
contributions 7
Fundraising activities 60
Fundraising events 40, 60
Funds 48
G
GAAP 60
Gaming 40, 60
GEN (Group exemption number) 9
Generally accepted accounting
principles 11
Generally accepted accounting
principles/GAAP 60
Gifts 36, 38
Goods 40
Goods or services 40
Goods sold, cost of 41
Governance 82
Governing body 60, 81
Governing documents 21
Government:
Agency 38
Contracts 38

Government (Cont.)

Contributions 37
Fees 38
Grants 37, 42
Official 45
Organization 4
Governmental issuer 39, 61
Governmental unit 48, 61
Governmental Unit 61
Government official 61
Grants 11, 36, 43
Allocations, and 11
Contributions 11
Government contributors 37
Payable 47
Receivable 46
Grants and other assistance 61
Grants and other assistance outside the
United States 13
Gross proceeds 61
Gross receipts 61, 74
$50,000 or less 74
Acting as agent 74
Figuring 74
Gross receipts test:
$5,000 74
$50,000 74
Gross rents 39
Gross revenue 14
Gross sales price 39
Group exemption 61, 77
Central/parent organization 77
Group exemption number (GEN) 9
Subordinate organization 9
Group return 61, 79
H
Heading 8
Health benefits 30
Helpful hints 2
Highest compensated employee 61, 81
Historical treasure 12, 61
Hospital 80
Hospital/hospital facility 61
Hospital (or cooperative hospital service
organization) 62
Hospital organization 62
Hours per week 28
Household goods 62
I
Income:
Exempt function 11
Investment 39
Rental 38
Unrelated business 15
Incomplete return 6
Independent contractor 36, 62
Independent voting member of governing
body 19, 62
Indoor tanning services 18

Information return 76
Information technology 44
Initial contract 62, 85
Instant bingo 41, 63
Institutional trustee 25, 63
Insurance 45
Insurance contract 75
Integrated auxiliary 3
Intellectual property 16
Interest 39, 45
Mortgage 45
Tax-exempt 18
Interested persons 81
Interest income 38, 39
Notes and loans receivable 39
Securities 39
Inventory 41
Investment 39
Committee 18
Dividend 39
Income 75
Interest 39
Management 20
Program-related 39
Rents 39
Savings and temporary cash 46
Investments 47
J
Joint costs 46
Joint venture 63, 81
K
Key employee 25, 63
L
Land 47
Late filing 6
Leasing company 28
Legal fees 44
Legislation 63
Liabilities, total 48
Liquidation 80
List of states 5
Loans:
Receivable 47
Lobbying 63
Activity/Activities 12
Expenses 80
Grassroots 44
In-house expenditures 44
Joint ventures 82
Lobbying activities 63
Lobbying expenditures 80
Local governmental unit 48
Lotteries 40

-98-

M
Maintaining offices, employees, or
agents 63
Management 81
Management and general expenses 42
Management company 20, 63
Medicaid 38
Medical research 63, 76
Medicare 87
Meetings 45
Member of the governing body 19, 64
Membership 45
Assessments 37
Benefits 39
Dues 37, 45
Merger, articles of 8
Miscellaneous 5
Expenses 46
Mission 4
Mission society 4
Money market funds 46
Mutual or cooperative electric
companies 17
N
Net assets 48
Noncash contribution 38
Noncash contributions 64
Nonexempt charitable trust 64
Nonfixed payments 85
Nonprofit health insurance issuer 3
Nonqualified deferred compensation 64
Nonqualified defined benefit plan 30
Nonqualified defined contribution
plan 30, 33
Nontaxable fringe benefit 85
Notes receivable 47
Number of employees 81
Nursing homes 38
O
Occupancy 45
Expense 45
Officer 25, 64
Offices 76
OMB Circular A-133 49
“On behalf of” issuer 64
Ordinary course of business 20
Organization(s) 4, 86
Affiliated 83
Form of 9
Not required to file 3
Organizational documents 79
Organization manager 64, 86
Organizations:
Foreign countries, in 4
Other assets 47
Other compensation 26
Ownership 14
Instructions for Form 990

P
Paid-in capital 49
Paid preparer 10
Paperwork Reduction Act Notice 50
Partnership 81
Payables 47
Payments:
Cash 88
Compensation 84
Nonfixed 85
Severance 43
To affiliates 45
Payroll taxes 44
Penalties 6, 16
Failure to file 6
Perjury 7
Pension plan contributions 44
Permanent (true) endowment 64
Personal benefit contracts 16
Phone help 2
Photographs of Missing Children 93
Pledges receivable 46
Policies:
Conflicts of interest 21
Document retention and
destruction 23
Joint venture 23
Nondiscrimination 88
Whistleblower 23
Political:
Expenses 81
Political campaign activities 64
Political organization 4
Penalties 76
Public inspection 75
Section 527 3
State or local 3
Political subdivision 65
Possession of the United States 65
Postage cost 76
Power of attorney 88
Premiums 75
Prepaid expenses 47
Principal officer 65
Printing 44
Private business use 65, 82
Private delivery services 6
Private foundation 65, 83
Privileged relationship 20
Proceeds 39, 65
Professional fundraising services 44, 65
Program-related investment 38, 65
Program service 11
Program service accomplishments,
statement of 10
Program service expenses 41
Program service revenue 38
Government agency 38
Insurance premiums 38
Interest income 38
Medicaid 38
Instructions for Form 990

Medicare 38
Membership fees 39
Program-related investments 38
Rental income 38
Section 501(c)(9) organization 38
Unrelated trade or business
activities 38
Prohibited tax shelter transactions 15, 16
Proxy tax 12
PTIN 10
Pub. 3079, Tax-Exempt Organizations
and Gaming 60
Publications 15
Compliance Checks 89
Group Exemptions 89
Pub. 15, (Circular E) Employer's Tax
Guide 88
Pub. 15–A, Employer's Supplemental
Tax Guide (Fringe Benefits) 89
Pub. 1771, Charitable Contributions–
Substantiation and Disclosure
Requirements 89
Pub. 1779, Independent Contractor or
Employee 36
Pub. 1828, Tax Guide for Churches
and Religious Organizations 89
Pub. 3079, Tax-Exempt Organizations
and Gaming 89
Pub. 3386, Tax Guide for Veterans
Organizations 89
Pub. 3833, Disaster Relief, Providing
Assistance Through Charitable
Organizations 89
Pub. 4220, Applying for 501(c)(3)
Tax-Exempt Status 89
Pub. 4221–PC, Compliance Guide for
501(c)(3) Public Charities 89
Pub. 4221–PF, Compliance Guide for
501(c)(3) Private Foundations 89
Pub. 4302, A Charity's Guide to
Vehicle Donations 89
Pub. 4303, A Donor's Guide to Vehicle
Donations 89
Pub. 463, Travel, Entertainment, Gift,
and Car Expenses 89
Pub. 4630, Exempt Organizations
Products and Services
Navigator 89
Pub. 525, Taxable and Nontaxable
Income 89
Pub. 526, Charitable Contributions 89
Pub. 538, Accounting Periods and
Methods 89
Pub. 557, Tax-Exempt Status for Your
Organization 89
Pub. 561, Determining the Value of
Donated Property 89
Pub. 598, Tax on Unrelated Business
Income of Exempt
Organizations 89
Pub. 892, How to Appeal an IRS
Decision on Tax Exempt Status 89
-99-

Pub. 910, IRS Guide to Free Tax
Services 89
Pub. 946, How To Depreciate
Property 89
Pub. 947, Practice Before the IRS and
Power of Attorney 10
Public charity 65, 80
Public Inspection 75
Public interest law firm 11
Publicly traded securities 47, 66
Public support 87
Pull tabs 66
Pull-tabs 41
Purchases from affiliates 45
Purpose of Form 1
Q
Qualified 501(c)(3) bond 66
Qualified conservation contribution 66
Qualified defined benefit plan 30
Qualified defined contribution plan 30
Qualified intellectual property 16
Qualified state or local political
organization 3, 67
Quasi-endowment 67
Quid pro quo contribution:
Disclosure statement 16
R
Racial nondiscrimination 88
Raffles 40
Reasonable:
Amount 76
Belief 79
Burden 77
Cause 6
Compensation 19
Effort 19, 20, 30
Estimate 10
Fee 76
Knowledge 84
Relationship 39
Reasonable compensation 67
Reasonable effort 67
Reasonableness, rebuttable presumption
of 85
Receivable 14
Account 46
Grants 46
Pledges 46
Reconciliation 5
Reconciliation of net assets 49
Recordkeeping 7
Refunding escrow 13, 67
Refunding issue 67
Reimbursement:
Of expenses 19
Of taxes 84
Related organization 19, 24, 68
Religious order 19, 68

Rent/rental 39
Expense 39
Income 38
Reportable compensation 13, 68
Reporting information from third
parties 8
Requirements for a properly completed
Form 990 7
Research 42
Retained earnings 49
Returns and allowances 41
Revenue 41, 47
Deferred 47
Gross 14
Program service 38
Special events 40
Sweepstakes, raffles, and lotteries 40
Revenue-sharing transactions 86
Review of financial statement 68
Review of financial statements 12
Revocation of exemption 86
Rounding off to whole dollars 7
Royalties 39
S
Salaries 43
Sales 41
Of inventory 38
Sarbanes-Oxley 23
Savings 46
Savings accounts 46
Schedule of contributors 12
Scholarships 12
School 68
Section 4947(a)(1) trusts 11, 18
Section 4958 82, 85, 86
Section 4958, excise taxes:
Disqualified persons 83
Organization managers 86
Section 501(c)(12) 17
Section 501(c)(15) 3, 74
Section 501(c)(3) 2
Applicable organization 83
Disclosure of transactions and
relationships 18
Section 501(c)(4):
Applicable organization 83
Section 501(c)(5):
Lobbying expenses 12
Membership dues 39
Section 501(c)(6):
Lobbying expenses 12
Membership dues 39
Section 501(c)(7) 17, 81
Section 501(c)(9) 9
Section 6033(e) 12
Securities 47
Security/Securities 39
Security/securities 68
Sequencing list to complete the form and
schedules 4

Severance payments 43
SFAS 116 69
SFAS 116, Accounting for Contributions
Received and Contributions Made 5,
36
SFAS 117 69
SFAS 117, Financial Statements of
Not-for-Profit Organizations 12
Shipping 44
Short accounting period 5, 69
Short period 69
Short year and final returns 30
Short year and final returns. 31
Signature 10
Signature block 10
Significant disposition of assets 81
Significant disposition of net assets 69
Social club 17
Social security:
Tax 44
Solicitations of nondeductible
contributions 16
SOP 98-2 46
Special events 40
Specific instructions for Form 990 8
Sponsoring organization 3, 69
State:
Filing requirement 89
Reporting requirements 5
Statement(s) 89
Activities outside of United States 13
Audited financial 80
Financial 49
Financial Accounting Standards
(SFAS 116) 5
Functional expenses 41
Position 98–2 46
Program service accomplishments 10
Revenue 36
State of legal domicile 9, 70
Subordinate organization 70, 77
Substantial contributor 59, 83
Substantial influence 83
Supported organization 70, 83
Supporting organization 70, 84
Sweepstakes 40
T
Tax-exempt bond 70
Tax shelter transaction 15
Tax year 25, 70
TE/GE EO Determinations 75
Telephone number 9
Temporarily restricted endowment 12,
70
Terminated 8
Text message contribution 90
Top financial official 25, 70
Top management official 25, 70
Total assets 47, 70
Total liabilities 48
-100-

Transfers 14
Personal benefit contracts 16
To controlled entities 14
Travel expense 45
Trust 8
Trustee 70
Trustee(s) 10, 13, 18, 25
Institutional 25
Trust fund recovery penalty:
Penalties 89
Tuition assistance 31
U
U.S. possession 3, 71
U.S. Treasury bills 46
Uncollectible pledges 36
Uniform Prudent Management of
Institutional Funds Act (UPMIFA) 48
Unincorporated association 8
United States 9, 70
University/universities 12
Unrelated business 15, 71
Income 36
Income tax 76
Revenue 39
Unrelated business gross income 71
Unrelated business income 42, 71
Unrelated organization 13, 71
Unrelated trade or business 71
Activities 38
Gross income 82
V
Vehicle donations 90
Voluntary employees' beneficiary
association 9
Volunteer 10, 71
Volunteer exception 29
Voting member of the governing body 71
Voting member of the governing body/
board 19
W
Wages 43
Website address 9
Whistleblower policy 23
Who must file 2
Widely available 78
Withholding:
Backup 15
Works of art 12, 71
Y
Year of formation 9, 71

Instructions for Form 990


File Typeapplication/pdf
File Title2014 Instructions for Form 990 Return of Organization Exempt From Income Tax
SubjectInstructions for Form 990 Return of Organization Exempt From Income Tax, Under section 501(c), 527, or 4947(a)(1) of the Interna
AuthorW:CAR:MP:FP
File Modified2014-12-02
File Created2014-11-10

© 2024 OMB.report | Privacy Policy