Cover image for 990 handbook : a line-by-line approach
990 handbook : a line-by-line approach
Blazek, Jody.
Personal Author:
Publication Information:
New York : Wiley, [2001]

Physical Description:
xiv, 226 pages : forms ; 26 cm.
Electronic Access:
Table of Contents
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KF6449.Z9 B58 2001 Adult Non-Fiction Central Closed Stacks

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Hands-on guidance to help nonprofits through the tax filing maze

Forms 990 provide a wealth of financial and programmatic information to enable government regulators, funders, journalists, and the interested public to measure a nonprofit's performance. A copy of the forms must be provided to anyone who asks; charities' forms are now posted for public view on the Internet courtesy of These forms are the most widely used tools for evaluating tax-exempt organizations. Schools, health and welfare organizations, business leagues, civic associations, museums, parent groups, garden clubs, private foundations, and the myriad of other nonprofit organizations recognized under section 501 of the federal tax code must file this form annually. Clear, correct, and concise preparation of Forms 990-EZ, 990, 990-PF, and 990-T is important, not only as financial documents, but also as a means of communicating an organization's mission and accomplishment to the public.

Demystifying the Forms 990 for financial professionals and nonprofessionals alike, this user-friendly handbook walks you through the federal tax compliance process to assure maintenance of tax-exempt status. Blazek is widely recognized for her ability to translate complicated concepts into understandable language and explain the why and how Forms 990 should be prepared. In this book, readers will find:
* Comprehensive, fill-in forms with line-by-line instructions including a synopsis of applicable tax issues
* Explanation of consequences of answers that can have several consequences
* Suggestions for dealing with the IRS as an organization grows and changes
* Ways to maximize deductions in calculating tax due on unrelated business income
* Tips for successful navigation of the interactive parts of Form 990-PF and reducing excise tax

Author Notes

JODY BLAZEK is a founding partner in a tax accounting firm that specializes in tax and financial planning for nonprofit organizations. In addition to Tax Planning and Compliance for Tax-Exempt Organizations, now in its third edition, she has authored two other books in the Nonprofit Tax Law and Compliance Series: Financial Planning for Nonprofit Organizations and Private Foundations, coauthored with Bruce Hopkins (all from Wiley)

Table of Contents

Prefacep. ix
Acknowledgmentsp. xii
About the Authorp. xiii
Chapter 1 Tools, Concepts, Filing, and Reporting Requirementsp. 1
1.1 Find Out Why the Nonprofit Qualifies for Tax Exemptionp. 4
1.2 Filing Forms 990p. 5
1.3 Public Inspection of Forms 990 and 1023 or 1024p. 11
1.4 Accounting Issuesp. 13
Appendix 1A Form 8868p. 22
Chapter 2 Successful Preparation of Form 990s and 990-EZp. 25
2.1 Form 990-EZ--Short Formp. 25
2.2 Form 990, Part I--Income and Expensep. 27
2.3 Part II--Statement of Functional Expensesp. 38
2.4 Part III--Statement of Program Service Accomplishmentsp. 45
2.5 Part IV--Balance Sheet and Reconciliationp. 46
2.6 Part V--List of Officers, Directors, and Trusteesp. 47
2.7 Parts VI and IX--Other Informationp. 51
2.8 Part VII--Analysis of Income-Producing Activityp. 54
2.9 Reporting by Political Organizationsp. 61
Appendix 2A Form 990-EZp. 65
Appendix 2B Form 990p. 67
Appendix 2C Schedule Bp. 76
Appendix 2D UBI Codesp. 79
Appendix 2E Exclusion Codesp. 80
Appendix 2F Form 8871p. 81
Appendix 2G Form 8872p. 83
Chapter 3 Form 990, Schedule A: For [section]501(c)(3) Organizationsp. 85
3.1 Parts I and II--Compensationp. 86
3.2 Part III--Statement About Activitiesp. 87
3.3 Part IV--Reason for Non-Private Foundation Status: [section]509(a)(1)p. 88
3.4 Part IV--Service-Providing Public Charities: [section]509(a)(2)p. 95
3.5 Part IV--Supporting Organizations: [section]509(a)(3)p. 96
3.6 Differences between [section]509(a)(1) and [section]509(a)(2)p. 97
3.7 Solving Troublesome Public Status Problemsp. 100
3.8 Part V--Private School Questionnairep. 102
3.9 Part VI-A--Lobbying Expenditures by Electing Public Charities--and Part VI-B--Lobbying Activity by Nonelecting Public Charitiesp. 103
3.10 Part VII--Information Regarding Transfers, Transactions, and Relationships with Other Organizationsp. 105
Appendix 3A Schedule Ap. 106
Appendix 3B Form 5768p. 114
Chapter 4 The Private Foundation Returnp. 115
4.1 Successful Completion of Form 990-PFp. 115
4.2 The Part I Columnsp. 118
4.3 Line-by-Line Instructions for Revenuesp. 120
4.4 Line-by-Line Instructions for Expendituresp. 125
4.5 Part II--Balance Sheetsp. 129
4.6 Part III--Analysis of Changes in Net Worth or Fund Balancesp. 130
4.7 Part IV--Capital Gains and Losses for Tax on Investment Incomep. 131
4.8 Reports Unique to Private Foundationsp. 132
4.9 Part V--Reducing the Tax Ratep. 132
4.10 Part VI--Calculating the Excise Taxp. 132
4.11 Part VII-A--Proof of Ongoing Qualification for Exemptionp. 133
4.12 Questions Seeking Evidence That No Sanctions Applyp. 137
4.13 Part VIII--Information About Officers, Directors, Trustees, Foundation Managers, Highly Paid Employees, and Contractorsp. 138
4.14 Part IX-A and B--Summary of Charitable Activities and Program-Related Investmentsp. 138
4.15 Part X--Minimum Investment Returnp. 139
4.16 Part XI--Distributable Amountp. 139
4.17 Part XII--Qualifying Distributionsp. 140
4.18 Part XIII--Undistributed Incomep. 140
4.19 Part XIV--Private Operating Foundationsp. 141
4.20 Part XV--Supplementary Informationp. 141
4.21 Part XV--Grants and Contributions Paid During the Year or Approved for Future Paymentp. 142
4.22 Part XVI-A--Analysis of Income-Producing Activityp. 143
4.23 Part XVII--Information Regarding Transfers to and Transactions and Relationships with Noncharitable Exempt Organizationsp. 143
Appendix 4A Form 990-PFp. 145
Appendix 4B Form 4720p. 158
Chapter 5 Form 990-T: Exempt Organization Business Income Tax Returnp. 167
5.1 What Is Unrelated Business Income?p. 168
5.2 Exceptions and Modifications from Taxp. 171
5.3 Unrelated Debt-Financed Incomep. 175
5.4 Who Files Form 990-T?p. 178
5.5 Due Dates, Tax Rates, and Other Filing Issuesp. 179
5.6 Normal Tax Income Rules Applyp. 182
5.7 The Unique Design of the 990-Tp. 185
5.8 Categories of Deductionsp. 186
5.9 Cost Allocationsp. 190
5.10 In-Kind Donationsp. 192
Appendix 5A Form 990-Tp. 193
Chapter 6 Successful IRS Communicationp. 199
6.1 Understanding the IRS Exempt Organization Divisionp. 200
6.2 Reporting Organizational/Program Changes to the IRSp. 202
6.3 Changing Fiscal Yearp. 204
6.4 Changing Accounting Methodp. 205
6.5 When to Amend a Form 990p. 207
6.6 Changing Public Charity Classp. 207
6.7 When the IRS Examinesp. 210
Notesp. 211
Indexp. 223