990 Schedule L Instructions for Schedule L (Form 990)

Note: The draft you are looking for begins on the next page.

Caution: DRAFT—NOT FOR FILING

This is an early release draft of an IRS tax form, instructions, or publication,
which the IRS is providing for your information. Do not file draft forms and do
not rely on draft forms, instructions, and pubs for filing. We incorporate all
significant changes to forms posted with this coversheet. However, unexpected
issues occasionally arise, or legislation is passed—in this case, we will post a
new draft of the form to alert users that changes were made to the previously
posted draft. Thus, there are never any changes to the last posted draft of a
form and the final revision of the form. Forms and instructions are subject to
OMB approval before they can be officially released, so we post drafts of them
until they are approved. Drafts of instructions and pubs usually have some
additional changes before their final release. Early release drafts are at
IRS.gov/DraftForms and remain there after the final release is posted at
IRS.gov/LatestForms. Also see IRS.gov/Forms.
Most forms and publications have a page on IRS.gov: IRS.gov/Form1040 for
Form 1040; IRS.gov/Pub501 for Pub. 501; IRS.gov/W4 for Form W-4; and
IRS.gov/ScheduleA for Schedule A (Form 1040), for example, and similarly for
other forms, pubs, and schedules for Form 1040. When typing in a link, type it
into the address bar of your browser, not a Search box on IRS.gov.
If you wish, you can submit comments to the IRS about draft or final forms,
instructions, or pubs at IRS.gov/FormsComments. Include “NTF” followed by the
form or pub number (for example, “NTF1040”, “NTFW4”, “NTF501, etc.) in the
body of the message to route your message properly. We cannot respond to all
comments due to the high volume we receive and may not be able to consider
many suggestions until the subsequent revision of the product, but we will
review each “NTF” message. If you have comments on reducing paperwork and
respondent (filer) burden, with respect to draft or final forms, please respond to
the relevant information collection through the Federal Register process; for
more info, click here.

2023

Department of the Treasury
Internal Revenue Service

Instructions for Schedule L
(Form 990)

TREASURY/IRS
AND OMB USE
ONLY DRAFT
December 4, 2023

Transactions With Interested Persons

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

Future Developments

For the latest information about developments related to Form
990 and its instructions, such as legislation enacted after they
were published, go to IRS.gov/Form990.

General Instructions

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

Purpose of Schedule

Schedule L (Form 990) is used by an organization that files
Form 990 or 990-EZ to provide information on certain financial
transactions or arrangements between the organization and a
disqualified person(s) under section 4958 or other interested
persons. Schedule L is also used to determine whether a
member of the organization's governing body is an
independent member for purposes of Form 990, Part VI, line 1b.
Supplemental information. Parts I–IV can be duplicated if
additional space is needed. Also, Part V may be used to explain
a transaction or to provide additional information.

Who Must File
The chart at the bottom of this page provides which
organizations must complete all or a part of Schedule L and
must attach Schedule L for Form 990 or 990-EZ.
Note. The organization should answer “Yes” to Form 990, Part
IV, line 28a, 28b, or 28c, only if the party to the transaction was
an “interested person” as defined in these instructions, and the
threshold amounts described in the specific instructions to
Schedule L, Part IV, later, are met.
If an organization isn't required to file Form 990 or 990-EZ but
chooses to do so, it must file a complete return and provide all
of the information requested, including the required schedules.

Specific Instructions

For Parts I, II, and III, report all transactions regardless of
amount. Part IV instructions provide individual and total
reporting thresholds below which reporting isn't required for an
interested person.
Each reportable transaction is to be reported in only one part
of Schedule L, as described below.

Interested persons. For purposes of Part I, an interested
person is a disqualified person under section 4958. For
purposes of Parts II–IV, an interested person is one of the
following.
1. For Form 990 filers, a person required to be listed on
Form 990, Part VII, Section A, as a current or former officer,
director, trustee, or key employee; and for Form 990-EZ filers,
a current officer, director, trustee, or key employee required to
be listed on Form 990-EZ, Part IV. For purposes of reporting
management company transactions on Part IV, however, a
former officer, director, trustee, or key employee of the
organization within the last 5 tax years is treated as an
interested person whether or not required to be so listed.
2. The creator or founder of the organization, including the
sponsoring organizations of a Voluntary Employees' Beneficiary
Association (VEBA).
3. A substantial contributor. For purposes of Schedule L,
Parts II–IV, a substantial contributor is an individual or
organization that made contributions during the tax year in the
aggregate of at least $5,000, and whose contributions are
required to be reported on Schedule B (Form 990), Schedule of
Contributors, for the organization’s tax year. A substantial
contributor may include an employer that contributes to a VEBA.
4. For purposes of Part III, a member of the organization’s
grant selection committee.
5. A family member of any individual described above.
6. A 35% controlled entity of one or more individuals
and/or organizations described above.
7. For purposes of Part III, an employee (or child of an
employee) of a substantial contributor or of a 35% controlled

Types of Filers—Schedule L
Type of filer

IF you answer “Yes” to

. . . . . . . . . . . . . . . . .

THEN you must complete

Section 501(c)(3), 501(c)(4), or 501(c)(29)
organization

Form 990, Part IV, line 25a or 25b (regarding excess
benefit transactions)

Schedule L, Part I.

Section 501(c)(3) or 501(c)(4)

Form 990-EZ, Part V, line 40b (regarding excess benefit
transactions)

Schedule L, Part I.

All organizations

Form 990, Part IV, line 26 (regarding loans)

Schedule L, Part II.

All organizations

Form 990-EZ, Part V, line 38a (regarding loans)

Schedule L, Part II.

All organizations

Form 990, Part IV, line 27 (regarding grants)

Schedule L, Part III.

All organizations

Form 990, Part IV, line 28a, 28b, or 28c (regarding
business transactions)

Schedule L, Part IV.

Nov 30, 2023

Cat. No. 51522J

. . . . . . . . . . .

entity of such person, but only if the employee (or child of an
employee) received the grant or assistance by the direction or
advice of the substantial contributor or designee or of the 35%
controlled entity, or under a program funded by the substantial
contributor that was intended primarily to benefit such
employees (or their children).

If an interested person has status as such other than by being a
substantial contributor or related to one, then make no
reference to the substantial contributor status. For example, if
grantee Jane Smith is both a substantial contributor and the
spouse of Director John Smith, then they must be listed by
name in column (a), and column (b) must state “spouse of
Director John Smith” or words to similar effect.
• Describe the transaction in column (c).
• State in column (d) whether the transaction has been
corrected.
• Identify in Part V the organization manager(s), if any, that
participated in the transaction, knowing that it was an excess
benefit transaction.

Refer to the specific instructions under each Part for

TIP information on how to report substantial contributors or

TREASURY/IRS
AND OMB USE
ONLY DRAFT
December 4, 2023
those related to substantial contributors.

An interested person for purposes of Parts II–IV doesn't
include a section 501(c)(3) organization, an exempt
organization with the same tax-exempt status (for example,
section 501(c)(3) or 527 status) as the filing organization, or a
governmental unit or instrumentality. Treat as a section 501(c)
(3) organization a foreign organization for which the filing
organization has made a reasonable judgment (or has an
opinion of U.S. counsel) that the foreign organization is
described in section 501(c)(3).

Excess benefit transaction. An excess benefit transaction is
generally a transaction in which an applicable tax-exempt
organization directly or indirectly provides to or for the use of a
disqualified person an economic benefit the value of which
exceeds the value of the consideration received by the
organization for providing such benefit. For special section 4958
rules governing transactions with donor advised funds and
supporting organizations, see the special rules under Section
4958 Excess Benefit Transactions in Appendix G in the
Instructions for Form 990, or Appendix E in the Instructions for
Form 990-EZ.
Applicable tax-exempt organizations are generally limited to
organizations which (without regard to any excess benefit) are
section 501(c)(3) public charities, section 501(c)(4) or 501(c)
(29) organizations, or organizations that had such status at any
time during the 5-year period ending on the date of the excess
benefit transaction.
Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations
should refer to the Instructions for Form 990, Part IV, lines 25a–
25b (or Form 990-EZ, Part V, line 40b) before completing Part I.
For more information on excess benefit transactions, section
4958, and special rules for donor advised funds and supporting
organizations, see Appendix G in the Instructions for Form 990
(or Appendix E in the Instructions for Form 990-EZ) and Pub.
557, Tax-Exempt Status for Your Organization.

Reasonable effort. The organization isn't required to provide
information about a transaction if it is unable to secure sufficient
information to conclude that the transaction is reportable after
making a reasonable effort to obtain such information. An
example of a reasonable effort is for the organization to
distribute a questionnaire annually to each person that it
believes may be an interested person, as described earlier,
requesting information relevant to determining whether a
transaction is reportable. The questionnaire may include the
name and title of each person reporting information, blank lines
for the person’s signature and signature date, and the pertinent
instructions and definitions for Schedule L interested persons
and transactions.

Example. A substantial contributor whether to the organization
states that they would like Mr. X and Ms. Y to be beneficiaries of
a grant. The organization inquires of the substantial contributor
Mr. X and Ms. Y are interested persons with respect to the
organization because of a family or business relationship they
have with the substantial contributor (using the pertinent
instructions and definitions), and the substantial contributor
replies in writing that they aren't. Whether they actually are
interested persons or not, the organization has made a
reasonable effort in this situation.

Line 2. Enter the amount of excise tax incurred by disqualified
persons and organization managers under section 4958 for the
transactions reported on line 1, whether or not assessed by the
IRS, unless abated. Form 4720, Return of Certain Excise Taxes
Under Chapters 41 and 42 of the Internal Revenue Code, must
be filed to report and pay the tax on excess benefit transactions.

Part I. Excess Benefit Transactions
(To be completed by section 501(c)(3), 501(c)(4), and 501(c)
(29) organizations.)

Part II. Loans to and/or From
Interested Persons

Line 1. For each excess benefit transaction involving an
organization described in section 501(c)(3), 501(c)(4), or 501(c)
(29), regardless of amount, provide information relating to each
of the following.
• Identify in column (a) the disqualified person(s) that
received an excess benefit in the transaction. If the person has
interested person status only as a substantial contributor, a
family member of a substantial contributor, a 35% controlled
entity of a substantial contributor, or an employee of a
substantial contributor or 35% controlled entity of a substantial
contributor, then enter the term “substantial contributor” or
“related to substantial contributor” (as the case may be) instead
of the interested person's name, in order to protect the
confidentiality of the substantial contributor.
• Identify in column (b) the relationship between the
disqualified person and the organization (for example, “officer”
or “family member of director”). If “substantial contributor” was
entered in column (a), enter “substantial contributor” here as
well. If “related to substantial contributor” was entered in column
(a), then describe the relationship without referring to specific
names, for example, “child of employee of 35% controlled
entity of substantial contributor.”

Report details on loans, including salary advances, payments
made pursuant to a split-dollar life insurance arrangement that
are treated as loans under Regulations section 1.7872-15, and
other advances and receivables (referred to collectively as
“loans”), as described on Form 990, Part IV, line 26 (including
receivables reported on Form 990, Part X, line 5, 6, or 22); on
Form 990-EZ, Part V, line 38a; or on Form 990, Part IV, line 26
(if the organization reported an amount on Form 990, Part X,
line 5, 6, or 22). Report only loans between the organization
and interested persons that are outstanding as of the end of the
organization's tax year. Report each loan separately,
regardless of amount.
In addition to loans originally made between the organization
and an interested person, also report loans originally between
the organization and a third party or between an interested
person and a third party that were transferred so as to become
a debt outstanding between the organization and an interested
person.
-2-

Instructions for Schedule L 2023

debtor is otherwise in default under the terms and conditions of
the loan.

Exceptions. Don't report the following in Part II.
• Excess benefit transactions reported on Schedule L, Part I.
• Advances under an accountable plan as described in the
instructions for Part II of Schedule J (Form 990), Compensation
Information.
• Pledges receivable that would qualify as charitable
contributions when paid.
• Accrued but unpaid compensation owed by the
organization.
• Loans from a credit union made to an interested person on
the same terms as offered to other members of the credit union.
• Tax-exempt bonds purchased from the filing organization
and held by an interested person, so long as the interested
person purchased the bonds on the same terms as offered to
the general public.
• Deposits into a bank account (when the bank is an interested
person) in the ordinary course of business, on the same terms
as the bank offers to the general public.
• Receivables for a section 501(c)(9) VEBA from a sponsoring
organization or contributing employer of the VEBA, if those
receivables were created in the ordinary course of business and
have been due for 90 days or fewer.
• Receivables outstanding that were created in the ordinary
course of the organization's business on the same terms as
offered to the general public (such as receivables for medical
services provided by a hospital to an officer of the hospital).

Column (h). State whether the organization's governing body
(or a committee of the governing body) approved the loan
transaction.
Column (i). State whether the loan is evidenced by a
promissory note or other written agreement signed by the
debtor.

TREASURY/IRS
AND OMB USE
ONLY DRAFT
December 4, 2023
Part III. Grants or Assistance
Benefiting Interested Persons

Report each grant or other assistance (including provision of
goods, services, or use of facilities), regardless of amount,
provided by the organization to any interested person at any
time during the organization's tax year. Examples of grants are
scholarships, fellowships, discounts on goods or services,
internships, prizes, and awards. A grant includes the gift portion
of a part-sale, part-gift transaction.
See Reasonable effort, earlier, applicable to Part III.

TIP

Exceptions. Don't report the following in Part III.
• Excess benefit transactions reported on Schedule L, Part I.
• Loans reported (or not required to be reported) on
Schedule L, Part II.
• Business transactions that don't contain any gift element and
that are engaged in to serve the direct and immediate needs of
the organization, such as payment of compensation (including
taxable and nontaxable fringe benefits treated as
compensation) to an employee or independent contractor in
exchange for services of comparable value. Some business
transactions may be reportable on Schedule L, Part IV.
• Compensation to a person listed on Form 990, Part VII,
Section A (including taxable and nontaxable fringe benefits
treated as compensation).
• Grants to employees (and their children) of a substantial
contributor or 35% controlled entity of a substantial contributor,
awarded on an objective and nondiscriminatory basis based on
pre-established criteria and reviewed by a selection committee,
as described in Regulations section 53.4945-4(b).
• Grants or assistance provided to an interested person as a
member of the charitable class or other class (such as a
member of a section 501(c)(5), 501(c)(6), or 501(c)(7)
organization) that the organization intends to benefit in
furtherance of its exempt purpose, if provided on similar terms
as provided to other members of the class, such as short-term
disaster relief, poverty relief, or trauma counseling. However,
grants for travel, study (such as scholarships or fellowships), or
other similar purposes (such as to achieve a specific objective,
produce a report or other similar product, or improve or
enhance a literary, artistic, musical, scientific, teaching, or other
similar capacity, skill, or talent of the grantee) like those
described in section 4945(d)(3) aren't excluded from reporting
under this exception.
(But see Schools, later, for instructions on how to report grants,
scholarships, and other assistance from colleges, universities,
and primary and secondary schools.) Grants that are awards
recognizing past achievements also aren't excluded from
reporting under this exception. Grants for travel, study, or similar
purposes don't include such purposes as short-term disaster
relief, poverty relief, or trauma counseling.
• Grants or assistance to a section 501(c)(3) organization.

Column (a). Identify the interested person that was the debtor
or creditor on the loan. If the person has interested person
status only as a substantial contributor, a family member of a
substantial contributor, a 35% controlled entity of a substantial
contributor, or an employee of a substantial contributor or 35%
controlled entity of a substantial contributor, then enter the term
“substantial contributor” or “related to substantial contributor”
(as the case may be) instead of the interested person's name,
in order to protect the confidentiality of the substantial
contributor.

Column (b). Identify the relationship between the interested
person and the organization. If “substantial contributor” was
entered in column (a), enter “substantial contributor” here as
well. If “related to substantial contributor” was entered in column
(a), then describe the relationship without referring to specific
names, for example, “child of employee of 35% controlled
entity of substantial contributor.”
If an interested person has status as such other than by being a
substantial contributor or related to one, then make no
reference to the substantial contributor status. For example, if
grantee Jane Smith is both a substantial contributor and the
spouse of Director John Smith, then they must be listed by
name in column (a), and column (b) must state “spouse of
Director John Smith” or words to similar effect.
Column (c). Describe the organization's purpose for engaging
in the loan.
Column (d). Check either “To” or “From,” whichever is
applicable.
Column (e). Enter the original dollar amount owed (the loan
principal).
Column (f). Enter the balance due as of the end of the
organization's tax year, including outstanding principal, accrued
interest, and any applicable penalties and collection costs. For
Form 990 filers, the sum total indicated in column (f) must equal
the total of Form 990, Part X, Balance Sheet, column (B), lines
5 and 6 (for amounts owed to the organization), and column (B),
line 22 (for amounts owed by the organization).

Column (a). Enter the name of the interested person that
benefited from the grant or assistance. If the person has
interested person status only as a substantial contributor, a
family member of a substantial contributor, a 35% controlled

Column (g). Answer “Yes” if any payment by the debtor was
past due as of the end of the organization's tax year, or if the
Instructions for Schedule L 2023

-3-

$10,000 or more in the joint venture, whether or not during the
tax year, and the profits or capital interest of the organization
and of the interested person each exceeds 10% at some time
during the tax year.

entity of a substantial contributor, or an employee of a
substantial contributor or 35% controlled entity of a substantial
contributor, then enter the term “substantial contributor” or
“related to substantial contributor” (as the case may be) instead
of the interested person's name, in order to protect the
confidentiality of the substantial contributor.

Business transactions. Business transactions include but
aren't limited to joint ventures and contracts of sale, lease,
license, insurance, and performance of services, whether
initiated during the organization's tax year or ongoing from a
prior year.

Column (b). Describe the relationship between the interested
person that benefited from the grant or assistance and the
organization, such as “spouse of the Director.” If “substantial
contributor” was entered in column (a), enter “substantial
contributor” here as well. If “related to substantial contributor”
was entered in column (a), then describe the relationship
without referring to specific names, for example, “child of
employee of 35% controlled entity of substantial contributor.”
If an interested person has status as such other than by
being a substantial contributor or related to one, then make no
reference to the substantial contributor status. For example, if
grantee Jane Smith is both a substantial contributor and the
spouse of Director John Smith, then they must be listed by
name in column (a), and column (b) must state “spouse of
Director John Smith” or words to similar effect.

TREASURY/IRS
AND OMB USE
ONLY DRAFT
December 4, 2023

Certain management company transactions with former of­
ficers, etc. A business transaction also includes a transaction
between the organization and a management company of
which a former officer, director, trustee, or key employee of the
organization (within the last 5 tax years, even if not listed on
Form 990, Part VII, Section A, because the individual didn’t
receive any compensation from the organization) is a direct or
indirect 35% owner (as measured by stock ownership (voting
power or value, whichever is greater) of a corporation, profits or
capital interest (whichever is greater) in a partnership or limited
liability company, or beneficial interest in a trust), or an officer,
director, or trustee.

Column (c). Enter the total dollar amount of grants and other
assistance provided to the interested person during the
organization's tax year.

Aggregate reporting. The organization can aggregate multiple
individual transactions between the same parties, or list them
separately. If aggregation is chosen, report the aggregate
amount in column (c) and describe the various types of
transactions (for example, “consulting,” “rental of real property”)
in column (d).

Column (d). Describe the type of assistance provided to the
interested person.

Column (e). Describe the organization's purpose in providing
assistance to the interested person.

Exceptions. Don't report the following in Part IV.
• Excess benefit transactions reported on Schedule L, Part I.
• Loans reported (or not required to be reported) on
Schedule L, Part II.
• Grants and other assistance reported (or not required to be
reported) on Schedule L, Part III (however, this exception
doesn't apply to transactions covered by the business
transaction exception described in the Part III instructions
earlier; such transactions may need to be reported in Part IV).
• Compensation reported on Form 990, Part VII, Section A,
unless the compensation was to a family member of another
person reported on Form 990, Part VII, Section A.
• Deposits into or withdrawals from a bank account (when the
bank is an interested person) in the ordinary course of
business, on the same terms as the bank offers to the general
public.
• The organization's charging of membership dues to its
officers, directors, etc.
• If the organization transfers funds to an interested person to
make investments on behalf of the organization as its agent or
contractor (but not as part of a joint venture), the amount of the
transaction for purposes of Part IV reporting isn't the entire
amount transferred but the management fees or other service
fees or carried interest (if any) of the interested person.
• Transactions with publicly traded companies in the ordinary
course of the publicly traded company’s business, on the same
terms as it generally offers to the public (or more favorable for
the filing organization).

Schools. Colleges, universities, and primary and secondary
schools aren't required to identify interested persons to whom
they provided scholarships, fellowships, and similar financial
assistance. Instead, these organizations must, on Part III, group
each type of financial assistance (for example, need-based
scholarships, merit scholarships, discounted tuition) provided to
interested persons on separate lines. For each line, the school
should report in column (c), the aggregate dollar amount of
each type of assistance, the type of assistance in column (d),
and the purpose of the assistance in column (e), unless such
reporting would be an unauthorized disclosure of student
education records under the Family Educational Rights and
Privacy Act (FERPA). Columns (a) and (b) should be left blank
for these lines.

Part IV. Business Transactions
Involving Interested Persons
Report on Part IV business transactions for which payments
were made during the organization's tax year between the
organization and an interested person, if such payments
exceeded the reporting thresholds described below, and
regardless of when the transaction was entered into by the
parties. The “ordinary course of business” exception to
reporting business relationships on Form 990, Part VI, line 2,
doesn't apply for purposes of Schedule L, but see the exception
below for publicly traded companies.
In general, an organization must report business
transactions on Part IV with an interested person if (a) all
payments during the tax year between the organization and the
interested person exceeded $100,000; (b) all payments during
the tax year from a single transaction between such parties
exceeded the greater of $10,000 or 1% of the filing
organization's total revenue for the tax year; (c) compensation
payments during the tax year by the organization to a family
member of a current or former officer, director, trustee, or key
employee of the organization listed on Form 990, Part VII,
Section A, exceeded $10,000; or (d) in the case of a joint
venture with an interested person, the organization has invested

Example 1. T, a family member of an officer of the
organization, serves as an employee of the organization and
receives during the organization's tax year compensation of
$15,000, which isn't more than 1% of the organization's total
revenue. The organization is required to report T's
compensation as a business transaction on Schedule L, Part IV,
because the organization's compensation to a family member of
an officer exceeds $10,000, whether or not T's compensation is
reported on Form 990, Part VII.

-4-

Instructions for Schedule L

(as the case may be) instead of the interested person's name,
in order to protect the confidentiality of the substantial
contributor.

Example 2. X, the child of a current director listed on Form
990, Part VII, Section A, is a first-year associate at a law
partnership that the organization pays $150,000 during the
organization's tax year. The organization isn't required to report
this business transaction on account of X's employment
relationship to the law firm.

Column (b). Enter the relationship between the interested
person and the organization. For example:
• Key employee of the organization;
• Family member of the former Director; or
• Entity more than 35% owned by (a) the former Director, and
(b) the President. If “substantial contributor” was entered in
column (a), enter “substantial contributor” here as well. If
“related to substantial contributor” was entered in column (a),
then describe the relationship without referring to specific
names, for example, “child of employee of 35% controlled
entity of substantial contributor.”

Example 3. The facts are the same as in Example 2, except
that X is a partner of the law firm and has an ownership interest
in the law firm of 36% of the profits. The organization must
report the business transaction because the law firm is a 35%
controlled entity of X and the dollar amount is in excess of the
$100,000 aggregate threshold.

TREASURY/IRS
AND OMB USE
ONLY DRAFT
December 4, 2023

Example 4. The facts are the same as in Example 3, except
that the law firm entered into the transaction with the
organization before X's parent became a director of the
organization. X’s parent became a director during the
organization’s tax year. The organization must report all
payments made during its tax year to the law firm for the
transaction.

If an interested person has status as such other than by being a
substantial contributor or related to one, then make no
reference to the substantial contributor status. For example, if
grantee Jane Smith is both a substantial contributor and the
spouse of Director John Smith, then they must be listed by
name in column (a), and column (b) must state “spouse of
Director John Smith” or words to similar effect.

Example 5. The facts are the same as in Example 3, except
that X is the child of a former director listed on Form 990, Part
VII, Section A. The organization is required to report the
business transaction, as family members of former directors
listed in Part VII are interested persons.

Column (c). The dollar amount of the transaction is the cash or
fair market value of other assets and services provided by the
organization during the tax year, net of reimbursement of
expenses. For joint ventures with interested persons, report
the total amount invested by the organization in the joint venture
as of the end of the organization's tax year, whether or not the
organization invested any part of the amount during the tax
year.

Example 6. The facts are the same as in Example 3, except
that the organization pays $75,000 in total during the
organization's tax year for 15 separate transactions to collect
debts owed to the organization. None of the transactions
involves payments to the law partnership in excess of $10,000.
The organization isn't required in this instance to report the
business transactions, because the dollar amounts don't exceed
either the $10,000 transaction threshold or the $100,000
aggregate threshold.

Column (d). Describe the transaction(s) by type, such as
employment or independent contractor arrangement, rental of
property, or sale of assets.

Example 7. The facts are the same as in Example 6, except
that the organization pays $105,000 instead of $75,000.
Because the aggregate payments for the business transactions
exceed $100,000, the organization must report all the business
transactions. The organization can report the transactions on an
aggregate basis or list them separately.

Column (e). Check “Yes” if all or part of the consideration paid
by the organization is based on a percentage of revenues of the
organization. For instance, check “Yes” if a management fee is
based on a percentage of revenues, or a legal fee owed to
outside attorneys by a public interest law firm is a percentage of
the amount collected.

Column (a). Enter the name of the interested person involved
in the direct or indirect business relationship with the
organization. If the person has interested person status only as
a substantial contributor, a family member of a substantial
contributor, a 35% controlled entity of a substantial contributor,
or an employee of a substantial contributor or 35% controlled
entity of a substantial contributor, then enter the term
“substantial contributor” or “related to substantial contributor”

Use Part V if the organization needs additional space to explain
a transaction or provide additional information. On Part V,
identify the specific part and line number that each response
supports, in the order in which those parts and lines appear on
Schedule L (Form 990). Part V can be duplicated if more space
is needed.

Instructions for Schedule L 2023

Part V. Supplemental Information

-5-