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. If the combined amount of an organization’s gross investment income, and other gross income from unrelated trades or businesses, is $1,000 or more for the tax year, the organization must report the investment income, and other unrelated business income, on Form 990-T. Answer “Yes” if the organization made a distribution from a donor advised fund to a donor, donor advisor, or related person during the organization’s tax year. For purposes of this question, a related person is any family member of the donor or donor advisor and any 35% controlled entity (as defined in section 4958(f)) of the donor or donor advisor. 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.
Report depreciation/amortization related to information technology on line 22. Program services are mainly those activities that further the organization’s exempt purposes. Fundraising expenses shouldn’t be reported as program service expenses even though one of the organization’s purposes is to solicit contributions. 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.
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, 32, and 33 in column (A). 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. Enter the amount paid by the organization to domestic individuals in the form of scholarships, fellowships, stipends, research grants, and similar payments and distributions.
An organization controlled by a controlling organization under section 512(b)(13). For the definition of control in this context, see section 512(b)(13)(D) 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). For purposes of Form 990, controlled entities don’t include disregarded entities of the filing organization.
An organization’s completed Form 990 or 990-EZ, and a section 501(c)(3) organization’s Form 990-T, Exempt Organization Business Income Tax Return, are generally available for public inspection as required by section 6104. Schedule B (Form 990), 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 990-EZ, parts of Schedule B (Form 990) can be open to public inspection. See Appendix D, Public Inspection of Returns, https://adprun.net/11-revenue-models-examples-tips-for-startups-to/ and the Instructions for Schedule B (Form 990) for more details. Part V of Form 990 is used by certain organizations to report information on various statements and returns that are related to other IRS filing and the tax compliance information for those returns. Schedule R is used by an organization that files Form 990 to provide information with the IRS on related organizations, the transactions made with those related organizations, and certain unrelated partnerships through which they conduct significant activities.
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. 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 don’t 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. Go to IRS.gov/Coronavirus for links to information on the impact of the coronavirus, as well as tax relief available for individuals and families, small and large businesses, and tax-exempt 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.
Additionally, a tax-exempt entity that has never been subject to federal income tax on an item of income or deduction but that is required to file a Form 990-T solely due to owing a section 6033(e)(2) proxy tax does not have to request consent to change its method for reporting the item. Forms 990 and 990-EZ are used Quicken for Nonprofits: Personal Finance Software by tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations to provide the IRS with the information required by section 6033. Part X, Balance sheet is used to report the total calculated amount of the assets, liabilities and Net Assets gained during the organization’s tax year.
Management companies and similar entities that are independent contractors shouldn’t be reported as key employees. The organization’s top management official and top financial official are deemed officers rather than key employees. 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.
