Part V - Private School Questionnaire

All schools that checked the box on line 6, Part IV, must complete Part V. Relevant parts of Rev. Proc. 75-50, 1975-2 C.B. 587 are given below. The revenue procedure gives guidelines and recordkeeping requirements for determining whether private schools that are recognized as exempt from tax have racially nondiscriminatory policies toward their students.

4.01 Organizational requirements.   A school must include a statement in its charter, bylaws, or other governing instrument, or in a resolution of its governing body, that it has a racially nondiscriminatory policy as to students and therefore does not discriminate against applicants and students on the basis of race, color, and national or ethnic origin.

4.02 Statement of policy.   Every school must include a statement of its racially nondiscriminatory policy as to students in all its brochures and catalogues dealing with student admissions, programs, and scholarships. A statement substantially similar to the Notice described in paragraph (a) of subsection 1 of section 4.03, infra, will be acceptable for this purpose. Further, every school must include a reference to its racially nondiscriminatory policy in other written advertising that it uses as a means of informing prospective students of its programs. The following references will be acceptable:

The (name) school admits students of any race, color, and national or ethnic origin.

4.03 Publicity.   The school must make its racially nondiscriminatory policy known to all segments of the general community served by the school.

1. The school must use one of the following two methods to satisfy this requirement:

(a) The school may publish a notice of its racially nondiscriminatory policy in a newspaper of general circulation that serves all racial segments of the community. This publication must be repeated at least once annually during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period. Where more than one community is served by a school, the school may publish its notice in those newspapers that are reasonably likely to be read by all racial segments of the communities that it serves. The notice must appear in a section of the newspaper likely to be read by prospective students and their families and it must occupy at least three column inches. It must be captioned in at least 12 point boldface type as a notice of nondiscriminatory policy as to students, and its text must be printed in at least 8 point type. The following notice will be acceptable:

Notice Of Nondiscriminatory Policy As To Students

The (name) school admits students of any race, color, national and ethnic origin to all the rights, privileges, programs, and activities generally accorded or made available to students at the school. It does not discriminate on the basis of race, color, national and ethnic origin in administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school-administered programs.

(b) The school may use the broadcast media to publicize its racially nondiscriminatory policy if this use makes such nondiscriminatory policy known to all segments of the general community the school serves. If this method is chosen, the school must provide documentation that the means by which this policy was communicated to all segments of the general community was reasonably expected to be effective. In this case, appropriate documentation would include copies of the tapes or script used and records showing that there was an adequate number of announcements, that they were made during hours when the announcements were likely to be communicated to all segments of the general community, that they were of sufficient duration to convey the message clearly, and that they were broadcast on radio or television stations likely to be listened to by substantial numbers of members of all racial segments of the general community. Announcements must be made during the period of the school's solicitation for students or, in the absence of a solicitation program, during the school's registration period.

Communication of a racially nondiscriminatory policy as to students by a school to leaders of racial groups as the sole means of publicity generally will not be considered effective to make the policy known to all segments of the community.

2. The requirements of subsection 1 of this section will not apply when one of the following paragraphs applies:

(a) If for the preceding 3 years the enrollment of a parochial or other church-related school consists of students at least 75% of whom are members of the sponsoring religious denomination or unit, the school may make known its racially nondiscriminatory policy in whatever newspapers or circulars the religious denomination or unit utilizes in the communities from which the students are drawn. These newspapers and circulars may be those distributed by a particular religious denomination or unit or by an association that represents a number of religious organizations of the same denomination. If, however, the school advertises in newspapers of general circulation in the community or communities from which its students are drawn and paragraphs (b) and (c) of this subsection are not applicable to it, then it must comply with paragraph (a) of subsection 1 of this section.

(b) If a school customarily draws a substantial percentage of its students nationwide or worldwide or from a large geographic section or sections of the United States and follows a racially nondiscriminatory policy as to students, the publicity requirement may be satisfied by complying with section 4.02, supra. Such a school may demonstrate that it follows a racially nondiscriminatory policy within the meaning of the preceding sentence either by showing that it currently enrolls students of racial minority groups in meaningful numbers or, when minority students are not enrolled in meaningful numbers, that its promotional activities and recruiting efforts in each geographic area were reasonably designed to inform students of all racial segments in the general communities within the area of the availability of the school. The question whether a school satisfies the preceding sentence will be determined on the basis of the facts and circumstances of each case.

(c) If a school customarily draws its students from local communities and follows a racially nondiscriminatory policy as to students, the publicity requirement may be satisfied by complying with section 4.02, supra. Such a school may demonstrate that it follows a racially nondiscriminatory policy within the meaning of the preceding sentence by showing that it currently enrolls students of racial minority groups in meaningful numbers. The question whether a school satisfies the preceding sentence will be determined on the basis of the facts and circumstances of each case. One of the facts and circumstances that the Service will consider is whether the school's promotional activities and recruiting efforts in each area were reasonably designed to inform students of all racial segments in the general communities within the area of the availability of the school. The Service recognizes that the failure by a school drawing its students from local communities to enroll racial minority group students may not necessarily indicate the absence of a racially nondiscriminatory policy as to students when there are relatively few or no such students in these communities. Actual enrollment is, however, a meaningful indication of a racially nondiscriminatory policy in a community in which a public school or schools became subject to a desegregation order of a federal court or otherwise expressly became obligated to implement a desegregation plan under the terms of any written contract or other commitment to which any Federal agency was a party.

The Service encourages schools to satisfy the publicity requirement by the methods described in subsection 1 of this section, regardless of whether a school considers itself within subsection 2, because it believes these methods to be the most effective to make known a school's racially nondiscriminatory policy. In this regard it is each school's responsibility to determine whether paragraph (a), (b), or (c) of subsection 2 applies to it. On audit, a school must be prepared to demonstrate that the failure to publish its racially nondiscriminatory policy in accordance with subsection 1 of this section was justified by the application to it of paragraph (a), (b), or (c) of subsection 2. Further, a school must be prepared to demonstrate that it has publicly disavowed or repudiated any statements purported to have been made on its behalf (after November 6, 1975) that are contrary to its publicity of a racially nondiscriminatory policy as to students, to the extent that the school or its principal official were aware of such statements.

4.04 Facilities and programs.   A school must be able to show that all of its programs and facilities are operated in a racially nondiscriminatory manner.

4.05 Scholarship and loan programs.   As a general rule, all scholarship or other comparable benefits procurable for use at any given school must be offered on a racially nondiscriminatory basis. Their availability on this basis must be known throughout the general community being served by the school and should be referred to in the publicity required by this section in order for that school to be considered racially nondiscriminatory as to students. . . . [S]cholarships and loans that are made pursuant to financial assistance programs favoring members of one or more racial minority groups that are designed to promote a school's racially nondiscriminatory policy will not adversely affect the school's exempt status. Financial assistance programs favoring members of one or more racial groups that do not significantly derogate from the school's racially nondiscriminatory policy similarly will not adversely affect the school's exempt status.

4.06 Certification.   An individual authorized to take official action on behalf of a school that claims to be racially nondiscriminatory as to students is required to certify annually, under penalties of perjury, that to the best of his or her knowledge and belief the school has satisfied the applicable requirements of sections 4.01 through 4.05 of the Rev. Proc. This certification is line 35 in Part V.

4.07 Faculty and staff.   The existence of a racially discriminatory policy with respect to employment of faculty and administrative staff is indicative of a racially discriminatory policy as to students. Conversely, the absence of racial discrimination in employment of faculty and administrative staff is indicative of a racially nondiscriminatory policy as to students.

7.01 Specific records.   Except as provided in section 7.03, each exempt private school must maintain for a minimum period of three years, beginning with the year after the year of compilation or acquisition, the following records for the use of the Service on proper request:

1. Records indicating the racial composition of the student body, faculty, and administrative staff for each academic year.
2. Records sufficient to document that scholarship and other financial assistance is awarded on a racially nondiscriminatory basis.
3. Copies of all brochures, catalogues, and advertising dealing with student admissions, programs, and scholarships. Schools advertising nationally or in a large geographic segment or segments of the United States need only maintain a record sufficient to indicate when and in what publications their advertisements were placed.
4. Copies of all materials used by or on behalf of the school to solicit contributions.

7.02 Limitation.  

1. For purposes of section 7.01, the racial composition of the student body, faculty, and administrative staff may be an estimate based on the best information readily available to the school, without requiring student applicants, students, faculty, or administrative staff to submit information to the school that the school otherwise does not require. For each academic year, however, a record of the method by which racial composition is determined must be maintained. . . .
2. The Service does not require that a school release personally identifiable records or personal information contained therein except in accordance with the requirements of the "Family Educational Rights and Privacy Act of 1974," 20 U.S.C. section 1232g (1974). Similarly, the Service does not require a school to keep records the maintenance of which is prohibited under state or federal law.

7.03 Exceptions.   The records described in section 7.01 need not be independently maintained for Internal Revenue Service use if:

1. Substantially the same information that each of these records would provide has been included in a report or reports filed in accordance with law with an agency or agencies of Federal, state, or local government, and this information is current within one year, and
2. The school maintains copies of these reports from which this information is readily obtainable. Records described in section 7.01 providing information not included in reports filed with an agency or agencies must be maintained by the school for Service use.

7.04 Failure to maintain records.   Failure to maintain or to produce upon the proper request the required records and information will create a presumption that the organization has failed to comply with these guidelines.

Part VI-A - Lobbying Expenditures by Electing Public Charities

Complete Part VI-A only for an eligible organization that elected to be subject to the lobbying expenditure limitations of section 501(h) by filing Form 5768 and for which the election was valid and in effect for its tax year beginning in the year 2002.

A public charity that makes a valid section 501(h) election may spend up to a certain percentage of its exempt purpose expenditures to influence legislation without incurring tax or losing its tax-exempt status.

Expenditure test.   Under the expenditure test, there are limits both upon the amount of the organization's grassroots lobbying expenditures and upon the total amount of its direct lobbying and grassroots lobbying expenditures. If the electing public charity does not meet this expenditure test, it will owe a section 4911 excise tax on its excess lobbying expenditures. Moreover, if over a 4-year averaging period the organization's average annual total lobbying or grassroots lobbying expenditures are more than 150% of its dollar limits, the organization will lose its exempt status.

The following terms are used in Part VI-A. See Regulations section 56.4911 for details.

Exempt purpose expenditures.   The amount an electing public charity may spend on lobbying (without incurring tax) is a scaled percentage of the organization's exempt purpose expenditures. In general, an expenditure is an exempt purpose expenditure if it is paid or incurred by an electing public charity to accomplish the organization's exempt purpose.

In general, exempt purpose expenditures are:

1. The total amount paid or incurred for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or to foster national or international amateur sports competition (not including providing athletic facilities or equipment, other than by qualified amateur sports organizations described in section 501(j)(2)),
2. The allocable portion of administrative expenses paid or incurred for the above purposes,
3. Amounts paid or incurred to try to influence legislation, whether or not for the purposes described in 1 above,
4. Allowance for depreciation or amortization, and
5. Fundraising expenditures, except that exempt purpose expenditures do not include amounts paid to or incurred for either the organization's separate fundraising unit or other organizations, if the amounts are primarily for fundraising.

See also Regulations section 56.4911-4(c) for a discussion of excluded expenditures.

Lobbying expenditures.   The term lobbying expenditures means expenditures paid or incurred for the purpose of attempting to influence legislation:

• Through communication with any member or employee of a legislative body, or with any government official or employee who may participate in the formulation of the legislation, and
• By attempting to affect the opinions of the general public.

To determine if an organization has spent excessive amounts on lobbying, you must know which expenditures are lobbying expenditures and which are not lobbying expenditures. An electing public charity's lobbying expenditures for a year are the sum of its expenditures during that year for (1) direct lobbying communications (direct lobbying expenditures) plus (2) grassroots lobbying communications (grassroots expenditures).

Direct lobbying communications (direct lobbying expenditures).   A direct lobbying communication is any attempt to influence any legislation through communication with any:

• Member or employee of a legislative body, or
• Government official or employee (other than a member or employee of a legislative body) who may participate in the formulation of the legislation, but only if the principal purpose of the communication is to influence legislation.

A communication with a legislator or government official will be treated as a direct lobbying communication, if, but only if, the communication:

• Refers to specific legislation, and
• Reflects a view on such legislation.

Grassroots lobbying communications (grassroots expenditures).   A grassroots lobbying communication is any attempt to influence any legislation through an attempt to affect the opinions of the general public or any part of the general public.

A communication is generally not a grassroots lobbying communication unless (in addition to referring to specific legislation and reflecting a view on that legislation) it encourages recipients to take action about the specific legislation.

A communication encourages a recipient to take action when it:

1. States that the recipient should contact legislators;
2. States a legislator's address, phone number, etc.;
3. Provides a petition, tear-off postcard, or similar material for the recipient to send to a legislator; or
4. Specifically identifies one or more legislators who:
   • Will vote on legislation;
   • Opposes the communication's view on the legislation;
   • Is undecided about the legislation;
   • Is the recipient's representative in the legislature; or
   • Is a member of the legislative committee that will consider the legislation.

A communication described in (4) above generally is grassroots lobbying only if, in addition to referring to and reflecting a view on specific legislation, it is a communication that cannot meet the full and fair exposition test as nonpartisan analysis, study, or research.

Communication with members.   For purposes of section 4911, expenditures for certain communications between an organization and its members are treated more leniently than are communications to nonmembers. Expenditures for a communication that refers to, and reflects a view on, specific legislation are not lobbying expenditures if the communication satisfies the following requirements:

1. The communication is directed only to members of the organization,
2. The specific legislation the communication refers to, and reflects a view on, is of direct interest to the organization and its members,
3. The communication does not directly encourage the member to engage in direct lobbying (whether individually or through the organization), and
4. The communication does not directly encourage the member to engage in grassroots lobbying (whether individually or through the organization).

Expenditures for a communication directed only to members that refers to, and reflects a view on, specific legislation and that satisfies the requirements of paragraphs 1, 2, and 4, but does not satisfy the requirements of paragraph 3, are treated as expenditures for direct lobbying.

Expenditures for a communication directed only to members that refers to, and reflects a view on, specific legislation and satisfies the requirements of paragraphs 1 and 2, but does not satisfy the requirements of paragraph 4, are treated as grassroots expenditures, whether or not the communication satisfies the requirements of paragraph 3.

See Regulations section 56.4911-5 for details.

There are special rules regarding certain paid mass media advertisements about highly publicized legislation; allocation of mixed purpose expenditures; certain transfers treated as lobbying expenditures and special rules regarding lobbying on referenda, ballot initiatives, and similar procedures (see Regulations sections 56.4911-2 and -3).

Legislation.   In general, the term legislation includes Acts, bills, resolutions, or similar items. Specific legislation includes both legislation that has already been introduced in a legislative body and a specific legislative proposal that the organization either supports or opposes.

Exceptions to the definitions of direct lobbying communication and/or grassroots lobbying communication.   In general, engaging in nonpartisan analysis, study, or research and making its results available to the general public or segment or members thereof, or to governmental bodies, officials, or employees is not considered either a direct lobbying communication or a grassroots lobbying communication. Nonpartisan analysis, study, or research may advocate a particular position or viewpoint as long as there is a sufficiently full and fair exposition of the pertinent facts to enable the public or an individual to form an independent opinion or conclusion.

A communication that responds to a governmental body's or committee's written request for technical advice is not a direct lobbying communication.

A communication is not a direct lobbying communication if the communication is an appearance before, or communication with, any legislative body whose action might affect the organization's existence, its powers and duties, its tax-exempt status, or the deductibility of contributions to the organization, as opposed to affecting merely the scope of the organization's future activities.

Affiliated groups.   Treat members of an affiliated group as a single organization to measure lobbying expenditures and permitted lobbying expenditures.

Two organizations are affiliated if one is bound by the other organization's decisions on legislative issues (control) or if enough representatives of one belong to the other organization's governing board to cause or prevent action on legislative issues (interlocking directorate).

If you are not sure whether your group is affiliated, you may ask the IRS for a ruling letter. There is a fee for this ruling. Send the request to:

Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224
Attention: T:EO:RA

Members of an affiliated group measure both lobbying expenditures and permitted lobbying expenditures on the basis of the affiliated group's tax year. If all members of the affiliated group have the same tax year, that year is the tax year of the affiliated group.

However, if the affiliated group's members have different tax years, the tax year of the affiliated group is the calendar year, unless all the members of the group elect otherwise. See Regulations section 56.4911-7(e)(3).

If the electing organization belongs to an affiliated group, complete in Part VI-A, lines 36 through 44:

• Column (a) for the affiliated group as a whole, and
• Column (b) for the electing member of the group.

If there are no excess lobbying expenditures on either line 43 or 44 of column (a), treat each electing member as having no excess lobbying expenditures.

However, if there are excess lobbying expenditures on either line 43 or 44 of column (a), treat each electing member as having excess lobbying expenditures. In such case, each electing member must file Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the Internal Revenue Code , and must pay the tax on its proportionate share of the affiliated group's excess lobbying expenditures.

To find a member's proportionate share, see Regulations section 56.4911-8(d). Enter the proportionate share in column (b) on line 43 or line 44, or on both lines.

Attached schedule.   Attach a schedule showing each affiliated group member's name, address, EIN, and expenses. Use the format of Part VI-A for this schedule. Show which members elected and which did not.

Include each electing member's share of the excess lobbying expenditures on the attached schedule. Nonelecting members do not owe tax, but remain subject to the general rule, which provides that no substantial part of their activities may consist of carrying on propaganda or otherwise trying to influence legislation.

Limited control.   If two organizations are affiliated because their governing instruments provide that the decisions of one will control the other only on national legislation, apply expenditures as follows:

1. Charge the controlling organization with its own lobbying expenditures and the national legislation expenditures of the affiliated organizations.
2. Do not charge the controlling organization with other lobbying expenditures (or other exempt-purpose expenditures) of the affiliated organizations.
3. Treat each local organization as though it were not a member of an affiliated group; i.e., the local organization should account for its own expenditures only and not any of the national legislation expenditures deemed as incurred by the controlling organization in 1 above.

When this type of limited control is present, each member of the affiliated group should complete column (b) only.

Group returns.   Although membership in a group affiliated for lobbying does not establish eligibility to file a group return, a group return can sometimes meet the filing requirements of more than one member of an affiliated group. (General Instruction R of the Instructions for Form 990 and Form 990-EZ explains who may file a group return.)

If a central or parent organization files a group return on behalf of two or more members of the group, complete column (a), Part VI-A, for the affiliated group as a whole. Include the central, electing, and nonelecting members.

In column (b), except on lines 43 and 44, include the amounts that apply to all electing members of the group if they are included in the group return.

Attach the schedule described above under Affiliated groups. Show what amounts apply to each group member.

If the group return includes organizations that belong to more than one affiliated group, show in column (a) the totals for all such groups. On the attached schedule, show the amounts that apply to each affiliated group and to each group member.

If the parent organization has made the lobbying expenditure election, its separate return must also show in column (a) the amounts that apply to the affiliated group as a whole and, in column (b), the amounts that apply to the parent organization only.

A subordinate organization not included in the group return would also complete column (a) for the affiliated group as a whole and column (b) for itself only.

However, if limited control (defined above) exists, complete only column (b) in Part VI-A of the group return for the electing members in the group.

Attach a schedule to show the amounts that apply to each electing member.

In the separate returns filed by the parent and by any subordinate organizations not included in the group return, complete only column (b).

Lines 36 through 44.   Complete column (b) for any organization using Part VI-A but complete column (a) only for affiliated groups.

Use lines 36 through 44 to determine whether any of the organization's current year lobbying expenditures are subject to tax. File Form 4720 if you need to report and pay the excise tax.

Lines 45 through 50.   Lines 45 through 50 are used to determine if the organization exceeded lobbying expenditure limits during the 4-year averaging period.

Any organization for which a lobbying expenditure election under section 501(h) was in effect for its tax year beginning in 2002 must complete columns (a) through (e) of lines 45 through 50 except in the following situations:

1. An organization first treated as a section 501(c)(3) organization in its tax year beginning in 2002 does not have to complete any part of lines 45 through 50.
2. An organization does not have to complete lines 45 through 50 for any period before it is first treated as a section 501(c)(3) organization.
3. If 2002 is the first year for which an organization's first section 501(h) election is effective, that organization must complete line 45, columns (a) and (e).
4. The organization must then complete all of column (e) to determine whether the amount on line 47, column (e), is equal to or less than the lobbying ceiling amount calculated on line 46 and whether the amount on line 50 is equal to or less than the grassroots ceiling amount calculated on line 49.
5. The organization does not satisfy both tests if either its total lobbying expenditures or grassroots lobbying expenditures exceed the applicable ceiling amounts. When this occurs, all five columns must be completed and a recomputation made unless exception 1 or 2 above applies.
6. If 2002 is the second or third tax year for which the organization's first section 501(h) election is in effect, that organization is required to complete only the columns for the years in which the election has been in effect, entering the totals for those years in column (e).
7. The organization must determine, for those 2 or 3 years, whether the amount entered in column (e), line 47, is equal to or less than the lobbying ceiling amount reported on line 46, and whether the amount entered in column (e), line 50, is equal to or less than the grassroots ceiling amount calculated on line 49.
8. The organization does not satisfy both tests if either its total lobbying expenditures or grassroots lobbying expenditures exceed applicable ceiling amounts. When that occurs, all five columns must be completed and a recomputation made, unless exception 1 or 2 above applies.

If the organization is not required to complete all five columns, attach a statement explaining why. In the statement, show the ending date of the tax year in which the organization made its first section 501(h) election and state whether or not that first election was revoked before the start of the organization's tax year that began in 2002.

Note:   If the organization belongs to an affiliated group, enter the appropriate affiliated group totals from column (a), lines 36 through 44, when completing lines 45, 47, 48, and 50.

Line 45. Lobbying nontaxable amount.   For 1999 through 2002, enter the amount from line 41 of the Schedule A (Form 990 or 990-EZ) filed for each year.

Line 47. Total lobbying expenditures.   For 1999 through 2002, enter the amount from line 38 of the Schedule A (Form 990 or 990-EZ) filed for each year.

Line 48. Grassroots nontaxable amount.   For 1999 through 2002, enter the amount from line 42 of the Schedule A (Form 990 or 990-EZ) filed for each year.

Line 50. Grassroots lobbying expenditures.   For 1999 through 2002, enter the amount from line 36 of the Schedule A (Form 990 or 990-EZ) filed for each year.

Part VI-B - Lobbying Activity by Nonelecting Public Charities

The Part VI-A instructions defining direct and grassroots lobbying activities by organizations that made the section 501(h) election do not apply to nonelecting organizations that complete Part VI-B.

Part VI-B provides a reporting format for any organization that engaged in lobbying activities in its 2002 tax year but did not make a section 501(h) lobbying expenditure election for that year by filing Form 5768.

A nonelecting public charity will generally be regarded as lobbying if the organization either: (1) contacts, or urges the public to contact, members of a legislative body for the purpose of proposing, supporting, or opposing legislation or the government's budget process; or (2) advocates the adoption or rejection of legislation.

Nonelecting organizations must complete Part VI-B to show lobbying expenditures paid or incurred.

Note:   In item g, direct contact means a personal telephone call or visit with legislators, their staffs, or government officials.

These nonelecting organizations must also attach a statement giving a detailed description of their lobbying activities. The detailed description of lobbying activities should include all lobbying activities, whether expenses are incurred or not (e.g., even lobbying activities carried out by unreimbursed volunteers).

For example, the activities should be included in the attached statement if an organization (either through its employees or volunteers) attempts to influence legislation in any of the following ways:

• Sending letters or publications to government officials or legislators.
• Meeting with or calling government officials or legislators.
• Sending or distributing letters or publications (including newsletters, brochures, etc.) to members or to the general public.
• Using direct mail, placing advertisements, issuing press releases, holding news conferences, or holding rallies or demonstrations.

Part VII - Information Regarding Transfers To and Transactions and Relationships With Noncharitable Exempt Organizations

Part VII is used to report direct and indirect transfers to (line 51a), direct and indirect transactions with (line 51b), and relationships with (line 52) any other noncharitable exempt organization (section 6033(b)(9)).

A noncharitable exempt organization is an organization exempt under section 501(c) (that is not exempt under section 501(c)(3)), or a political organization described in section 527.

For purposes of these instructions, the section 501(c)(3) organization completing this Schedule A (Form 990 or 990-EZ) is referred to as the reporting organization.

A noncharitable exempt organization is related to or affiliated with the reporting organization if:

1. The two organizations share some element of common control or
2. A historic and continuing relationship exists between the two organizations.

A noncharitable exempt organization is unrelated to the reporting organization if:

1. The two organizations share no element of common control and
2. A historic and continuing relationship does not exist between the two organizations.

An element of common control is present when one or more of the officers, directors, or trustees of one organization are elected or appointed by the officers, directors, trustees, or members of the other. An element of common control is also present when more than 25% of the officers, directors, or trustees of one organization serve as officers, directors, or trustees of the other organization.

A historic and continuing relationship exists when two organizations participate in a joint effort to work in concert toward the attainment of one or more common purposes on a continuous or recurring basis rather than on the basis of one or several isolated transactions or activities. Such a relationship also exists when two organizations share facilities, equipment, or paid personnel during the year, regardless of the length of time the arrangement is in effect.

Line 51. Reporting of certain transfers and transactions.   Except as provided below, report on line 51 any transfer to or transaction with a noncharitable exempt organization even if the transfer or transaction constitutes the only connection with the noncharitable exempt organization.

Related organizations.   If the noncharitable exempt organization is related to or affiliated with the reporting organization, report all direct and indirect transfers and transactions except for contributions and grants received by the reporting organization.

Unrelated organizations.   All transfers from the reporting organization to an unrelated noncharitable exempt organization must be reported on line 51a. All transactions between the reporting organization and an unrelated noncharitable exempt organization must be shown on line 51b unless they meet the exception in the specific instructions for that line.

Line 51a. Transfers.   Answer Yes to lines 51a(i) and 51a(ii) if the reporting organization made any direct or indirect transfers of any value to a noncharitable exempt organization.

A transfer is any transaction or arrangement whereby one organization transfers something of value (cash, other assets, services, use of property, etc.) to another organization without receiving something of more than nominal value in return. Contributions, gifts, and grants are examples of transfers.

If the only transfers between the two organizations were contributions and grants made by the noncharitable exempt organization to the reporting organization, answer No.

Line 51b. Other transactions.   Answer Yes for any transaction described in lines 51b(i) through (vi), regardless of its amount, if it is with a related or affiliated organization.

Unrelated organizations.   Answer Yes for any transaction between the reporting organization and an unrelated noncharitable exempt organization, regardless of its amount, if the reporting organization received less than adequate consideration. There is adequate consideration where the fair market value of the goods, other assets, or services furnished by the reporting organization is not more than the fair market value of the goods, other assets or services received from the unrelated noncharitable exempt organization. The exception described below does not apply to transactions for less than adequate consideration.

Answer Yes for any transaction, including transfers for adequate consideration, between the reporting organization and an unrelated noncharitable exempt organization if the amount involved is more than $500. The amount involved is the fair market value of the goods, services, or other assets furnished by the reporting organization.

Exception.   If a transaction with an unrelated noncharitable exempt organization was for adequate consideration and the amount involved was $500 or less, it is not necessary to answer Yes for that transaction.

Line 51b(iii).   Answer Yes for transactions in which the reporting organization was either the lessor or the lessee.

Line 51b(iv).   Answer Yes if either organization reimbursed expenses incurred by the other.

Line 51b(v).   Answer Yes if either organization made loans to the other or if the reporting organization guaranteed the other's loans.

Line 51b(vi).   Answer Yes if either organization performed services or membership or fundraising solicitations for the other.

Line 51c.   Complete line 51c regardless of whether the noncharitable exempt organization is related to or closely affiliated with the reporting organization. For the purposes of this line, facilities includes office space and any other land, building, or structure whether owned or leased by, or provided free of charge to, the reporting organization or the noncharitable exempt organization.

Line 51d.   Use this schedule to describe the transfers and transactions for which you entered Yes on lines 51a through 51c above. You must describe each transfer or transaction for which you answered Yes. You may combine all of the cash transfers (line 51a(i)) to each organization into a single entry. Otherwise, make a separate entry for each transfer or transaction.

Column (a).   For each entry, enter the line number from lines 51a through 51c. For example, if you answered Yes to line 51b(iii), enter b(iii) in column (a).

Column (d).   If you need more space, write see attached in column (d) and use an attached sheet for your description. If you are making more than one entry on line 51d, specify, on the attached sheet, which transfer or transaction you are describing.

Line 52. Reporting of certain relationships.   Enter on line 52 each noncharitable exempt organization to or with which the reporting organization is related, or affiliated, as defined above. If the control factor or the historic and continuing relationship factor (or both) is present at any time during the year, you must identify the organization on line 52 even if neither factor is present at the end of the year.

Do not enter unrelated noncharitable exempt organizations on line 52 even if you report transfers to or transactions with those organizations on line 51. For example, if you reported a one-time transfer to an unrelated noncharitable exempt organization on line 51a(ii), you should not list the organization on line 52.

Column (b).   Enter the exempt category of the organization; for example, 501(c)(4).

Column (c).   In most cases, a simple description, such as common directors or auxiliary of reporting organization will be sufficient. If you need more space, write see attached in column (c) and use a separate sheet to describe the relationship. If you list more than one organization on line 52, identify which organization you are describing on the attached sheet.

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