IRS Tax Forms  
Instructions for Form 990 & 990-EZ 2001 Tax Year

Return of Organization Exempt From Income Tax and
Short Form Return of Organization Exempt From Income Tax

Part VII - Analysis of Income-Producing Activities

Political organizations described in section 527 are not required to complete this Part.

An organization is exempt from income taxes only if its primary purpose is to engage in the type of activity for which it claims exemption.

An exempt organization is subject to a tax on unrelated business taxable income if such income is from a trade or business that is regularly carried on by the organization and is not substantially related to the organization's performance of its exempt purpose or function. Generally, a tax-exempt organization with gross income of $1,000 or more for the year from an unrelated trade or business must file Form 990-T and pay any tax due.

In Part VII, show whether revenue, also reportable on lines 2 through 11 of Part I, was received from activities related to the organization's purpose or activities unrelated to its exempt purpose. Enter gross amounts unless indicated otherwise. Show also any revenue excludable from the definition of unrelated business taxable income.

The sum of amounts entered in columns (B), (D), and (E) for lines 93 through 103 of Part VII should match amounts entered for correlating lines 2 through 11 of Part I. Use the following table to verify the relationship of Part VII with Part I.

Note: Contributions that are reportable on lines 1a through 1d of Part I are not reportable in Part VII.

Amounts in Part VII on Line Correspond to Amounts in Part I on Line
93(a) through (g)   2
94   3
95   4
96   5
97 and 98   6c
99   7
100   8d
101   9c
102   10c
103(a) through (e)   11
105 (plus line 1d, Part I)   12

Completing Part VII
 
Column (A)

In column (A), identify any unrelated business taxable income reportable in column (B) by selecting a business code from the Codes for Unrelated Business Activity in the 2001 Instructions for Form 990-T.

Note: The codes for unrelated business activity have been revised. Use the codes shown in the 2001 Instructions for Form 990-T.

Column (B)

In column (B), enter any revenue received from activities unrelated to the exempt purpose of the organization. See the Instructions for Form 990-T and Pub. 598 for a discussion of what is unrelated business taxable income. If you enter an amount in column (B), then you must enter a business code in column (A).

Column (C)

In column (C), enter an exclusion code from the Exclusion Codes list on the last page of the Specific Instructions for Form 990 to identify any revenue excludable from unrelated business taxable income. If more than one exclusion code applies to a particular revenue item, use the lowest numbered exclusion code that applies. If nontaxable revenues from several sources are reportable on the same line in column (D), use the exclusion code that applies to the largest revenue source. If the list of exclusion codes does not include an item of revenue that is excludable from unrelated business taxable income, enter that item in column (E) and see the instructions for column (E).

Column (D)

For column (D), identify any revenue received that is excludable from unrelated business taxable income. If you enter an amount in column (D), you must enter an exclusion code in column (C).

Column (E)

For column (E), report any revenue from activities related to the organization's exempt purpose; (i.e., income received from activities that form the basis of the organization's exemption from taxation). Also report here any revenue that is excludable from gross income other than by Code section 512, 513, or 514, such as interest on state and local bonds that is excluded from tax by section 103. Explain in Part VIII how any amount reported in column (E) related to the accomplishment of the organization's exempt purposes.

Lines 93(a) through (g) - Program service revenue

List the organization's revenue-producing program service activities on these lines. Program service activities are primarily those that form the basis of an organization's exemption from tax. Enter, in the appropriate columns, gross revenue from each program service activity and the business and exclusion codes that identify this revenue. See the explanation of program service revenue in the instructions for Part I, line 2.

Line 93(f) - Medicare and Medicaid payments

Enter the revenue received from Medicare and Medicaid payments. See the Examples of program service revenue in the instructions for Part I, line 2.

Line 93(g) - Fees and contracts from government agencies

In the appropriate columns, enter gross revenue earned from fees and contract payments by government agencies for a service, facility, or product that benefited the government agency primarily, either economically or physically. Do not include government grants that enabled your organization to benefit the public directly and primarily. See Part I, line 1c instructions for the distinction between government grants that represent contributions and payments from government agencies for a service, product, or facility that primarily benefited the government agencies.

Report on line 2 of Part I (program service revenue) the sum of the entries in columns (B), (D), and (E) for lines 93(a) through (g).

Lines 94 through 96 - Dues, assessments, interest, and dividends

In the appropriate columns, report the revenue received for these line items. General instructions for lines 94 through 96 are given in the instructions for Part I, lines 3 through 5.

Lines 97 and 98 - Rental income (loss)

Report net rental income from investment property on these lines. Also report here rental income from unaffiliated exempt organizations. Report rental income, however, from an exempt function (program service) on line 93. Refer to the instructions for Part I, line 6. A more detailed discussion of rental income is given in the Instructions for Form 990-T and Pub. 598.

Rents from real property are usually excluded in computing unrelated business taxable income, as are incidental amounts (10% or less) of rental income from personal property leased with real property (mixed lease). In a mixed lease where the rent attributable to personal property is more than 50% of the total rent, neither rent from real or personal property is excluded from unrelated business taxable income. The exclusion also does not apply when the real or personal property rentals depend wholly or partly on the income or profits from leased property, other than an amount based on a fixed percentage or percentage of gross receipts or sales.

The rental exclusion from unrelated business taxable income does not apply to debt-financed real property. In general, debt-financed property is any property that the organization finances by debt and holds to produce income instead of for exempt purposes. An exempt organization's income from debt-financed property is treated as unrelated business taxable income and is subject to tax in the same proportion as the property remains financed by the debt. If substantially all (85% or more) of any property is used for an organization's exempt purposes, the property is not treated as debt-financed property. The rules for debt-financed property do not apply to rents from personal property.

Lines 99 through 102

In the appropriate columns, report the revenue received for these line items. General instructions for lines 99 through 102 are given in the instructions for Part I, lines 7 through 10.

Lines 103(a) through (e) - Other revenue

List any Other revenue activity on these lines. These activities are discussed in the instructions for line 11, Part I. In the appropriate columns, enter the revenue received from these activities. Select applicable business and exclusion codes. Report as Other revenue, on line 11 of Part I, the total revenue entered in columns (B), (D), and (E) for lines 103(a) through (e).

Line 105 - Total

Enter the total revenue reported on line 104 for columns (B), (D), and (E). The amount reported on line 105, plus the amount on line 1d of Part I, should equal the amount entered for Total revenue on line 12 of Part I.


Part VIII - Relationship of Activities to the Accomplishment of Exempt Purposes

To explain how an amount entered in Part VII, column (E), was related or exempt function income, show the line number of the amount in column (E) and give a brief description of how the activity reported in column (E) specifically contributed to the accomplishment of the organization's exempt purposes (other than by providing funds for such purposes). Activities that generate exempt-function income are activities that form the basis of the organization's exemption from tax.

Also give the line number and an explanation for any income entered in column (E) that is specifically excluded from gross income other than by Code sections 512, 513, or 514. If no amount is entered in column (E), do not complete Part VIII.

Example. M, an organization described in section 501(c)(3), operates a school for the performing arts. Admission is charged at student performances. M reported admission income in column (E) of Part VII and explained in Part VIII that performances before an audience were an essential part of the students' training and related to the exempt purpose of the organization.

Because M also reported interest from state bonds in column (E) of Part VII, M explained in Part VIII that such interest was excluded from gross income by Code section 103.

If you need additional space, see Attachments in General Instruction W.


Part IX - Information Regarding Taxable Subsidiaries and Disregarded Entities

Column (A). Enter the name, address, and EIN of each taxable corporation or partnership and each disregarded entity in which the organization held a 50% or greater interest at any time during the year. If a disregarded entity does not have its own EIN, state that it uses the organization's EIN.

Columns (D) and (E). Enter the corporation's or partnership's total income and end-of-year total assets as reported on each entity's Federal tax return for the year ending within the year covered by the parent organization's Form 990. Since the financial information of a disregarded entity is reported on its parent organization's return, enter in Column (D) the amount on line 12, Total revenue, that is attributable to the disregarded entity. Enter in Column (E) the amount on line 59, Total assets, Column (B), that is attributable to the disregarded entity.


Part X - Information Regarding Transfers Associated With Personal Benefit Contracts

See General Instruction V which also discusses the reporting requirements for this Part.

If, in connection with any transfer of funds to a charitable 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 the premiums it paid and the premiums paid by others, but treated as paid by the organization, on Form 8870. The organization must report and pay an excise tax, equal to premiums paid, on Form 4720.

22386X02

Exclusion Codes


Specific Instructions for Form 990-EZ

Note: See also the General Instructions that apply to both Form 990 and Form 990-EZ.

Contents Page
Completing the Heading of Form 990-EZ 35
Part I - Revenue, Expenses, and Changes in Net Assets 36
Part II - Balance Sheets 39
Part III - Statement of Program Service Accomplishments 40
Part IV - List of Officers, Directors, Trustees, and Key Employees 40
Part V - Other Information 40


Completing the Heading of Form 990-EZ

The instructions that follow are keyed to items in the heading for Form 990-EZ.

Item A - Accounting period

Use the 2001 Form 990-EZ to report on a calendar year accounting period beginning January 1, 2001, and ending December 31, 2001.

Use the 2001 Form 990-EZ to report on an accounting period other than a calendar year (either a fiscal year that began in 2001 or a short period (less than 12 months) that began in 2001). You must show the month and day in 2001 that your fiscal year began, or the short period began. You must also show the day, month, and year your fiscal year or short period ended. See General Instruction G.

Item B - Checkboxes

Address change, name change, and initial return. Check the appropriate box if the organization changed its address since it filed its previous return, or if this is the first time the organization is filing either a Form 990 or a Form 990-EZ.

If the tax-exempt organization has changed its name, attach the following documents:

IF the tax-exempt organization is . . . THEN attach these documents. . .
A corporation An amendment to the articles of incorporation with proof of filing with the state of incorporation.
A trust An amendment to the trust agreement signed by the trustee.
An association An amendment to the articles of association, constitution, bylaws, or other organizing document, along with signatures of at least two officers/members.

Final return and amended return. Organizations should file final returns when they cease to be section 501(a) organizations or section 527 organizations; for example, when they cease operations and dissolve. See the instructions for line 36 that discuss liquidations, dissolutions, terminations, or substantial contractions.

If the return is an amended return, check the box. There are amended return requirements when filing with a state. See General Instructions E and J.

Application pending. If the organization's application for exemption is pending, check this box and complete the return.

Item C - Name and address

If we mailed the organization a Form 990 Package with a preaddressed mailing label, attach the label in the name and address space on the organization's return. Using the label helps us avoid errors in processing the return. If any information on the label is wrong, draw a line through that part and correct it.

If the organization operates under a name different from its legal name, give the legal name of the organization but identify its alternate name, after the legal name, by writing "aka" (also known as) and the alternate name of the organization. However, if the organization has changed its name, follow the instructions for Name change in Item B - Checkboxes.

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, show the box number instead of the street address.

For foreign addresses, enter information in the following order: City, province or state, and the name of the country. Follow the foreign country's practice in placing the postal code in the address. Please do not abbreviate the country name.

If a change of address occurs after the return is filed, use Form 8822 to notify the IRS of the new address.

Item D - Employer identification number

The organization should have only one Federal employer identification number (EIN). If the organization has more than one EIN and has not been advised which to use, notify the Internal Revenue Service Center, Ogden, UT 84201-0027. State what numbers the organization has, the name and address to which each number was assigned, and the address of its principal office. The IRS will advise the organization which number to use.

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

Item E - Telephone number

Enter a telephone number of the organization that members of the public and government regulators may use during normal business hours to obtain information about the organization's finances and activities. If the organization does not have a telephone number, enter the telephone number of an organization official who can provide such information.

Item F - Group exemption number

If the organization is covered by a group exemption letter, enter the four-digit group exemption number (GEN). Contact the central/parent organization if you are unsure of the GEN assigned.

Item G - Accounting method

Indicate the method of accounting used in preparing this return. See General Instruction G.

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

Whether or not the organization enters any amount on line 1 of Form 990-EZ, the organization must either check the box in item H or attach Schedule B (Form 990, 990-EZ, or 990-PF). Failure to either check the box in item H or file Schedule B (Form 990, 990-EZ, or 990-PF) will result in a determination that the return is incomplete. See the instructions for Schedule B (Form 990, 990-EZ, or 990-PF), Schedule of Contributors, for more information.

Note: Contributor includes individuals, fiduciaries, partnerships, corporations, associations, trusts, and exempt organizations.

Guidelines for meeting the schedule of contributor requirements of Schedule B (Form 990, 990-EZ, or 990-PF)

Section 501(c)(3) org., meeting the 1/3 support test of 170(b)(1)(A) If . . . A section 501(c)(3) organization that met the 1/3 support test of the regulations under 509(a)(1)/170(b)(1)(A) did not receive a contribution of the greater of $5,000 or 2% of the amount on line 1 of Form 990-EZ, from any one contributor,*
  Then . . . The organization should check the box in item H to certify that it is not required to attach Schedule B (Form 990, 990-EZ, or 990-PF).
  Otherwise . . . Complete and attach Schedule B (Form 990, 990-EZ, or 990-PF).
Section 501(c)(7), (8), or (10) organization If . . . A section 501(c)(7), (8), or (10) organization did not receive any contribution or bequest for use exclusively for religious, charitable, scientific, literary, or educational purposes, or the prevention of cruelty to children or animals (and did not receive any noncharitable contributions of $5,000 or more as described below under general rule).
  Then . . . The organization should check the box in item H to certify that it is not required to attach Schedule B (Form 990, 990-EZ, or 990-PF).
  Otherwise . . . Complete and attach Schedule B (Form 990, 990-EZ, or 990-PF).
All other Form 990 or Form 990-EZ organizations (general rule) If . . . The organization did not show as part of line 1 of the Form 990-EZ, a contribution of $5,000 or more from any one contributor,*
  Then . . . The organization should check the box in item H to certify that it is not required to attach Schedule B (Form 990, 990-EZ, or 990-PF).
  Otherwise . . . Complete and attach Schedule B (Form 990, 990-EZ, or 990-PF).
* Total a contributor's gifts of $1,000 or more to determine if a contributor gave $5,000 or more. Do not include smaller gifts.

Item I - Web site

Show the organization's Web site address if a Web site is available. Otherwise, write "N/A" (not applicable). Consider adding your e-mail address to your Web site.

Item J - Type of organization

If the organization is exempt under section 501(c), check the applicable box and insert, within the parentheses, the number that identifies the type of section 501(c) organization the filer is. See the chart in General Instruction C. The term section 501(c)(3) includes organizations exempt under sections 501(e), (f), (k), and (n). Check the box if the organization is a section 527 political organization. See General Instruction U.

If the organization is a section 4947(a)(1) nonexempt charitable trust, check the applicable box. Note also the discussion regarding Schedule A (Form 990 or 990-EZ) and Form 1041 in General Instruction D and the instructions for line 43.

Item K - Gross receipts of $25,000 or less

Check this box if the organization's gross receipts are normally not more than $25,000. However, if the organization received a Form 990 Package, see General Instruction A and the discussion on gross receipts in General Instruction B.

Item L - Calculating gross receipts

Only those organizations with gross receipts of less than $100,000 and total assets of less than $250,000 at the end of the year can use the Form 990-EZ. If the organization does not meet these requirements, it must file Form 990. The organization's gross receipts are the total amount it received from all sources during its annual accounting period, without subtracting any costs or expenses. See the gross receipts discussion in General Instruction B.

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