|
2003 Tax Help Archives |
| Home >
Tax Help Archives > 2003 > Instructions > Form 990--EZ
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Personal computer.
You can access the IRS website 24 hours a day, 7 days a week at www.irs.gov to:
CD-ROM.
Order Pub. 1796, IRS Federal Tax Products on CD-ROM, and get:
By phone and in person.
You can order forms and publications 24 hours a day, 7 days a week, by calling 1-800-TAX-FORM (1-800-829-3676). You can also get most
forms and publications at your local IRS office.
Schedule A (Form 990 or 990-EZ).
Organization Exempt Under Section 501(c)(3) (Except Private Foundation), 501(e), 501(f), 501(k), 501(n), or Section
4947(a)(1) Nonexempt Charitable
Trust. The Schedule A (Form 990 or 990-EZ) is filed with Form 990, or Form 990-EZ, for a section 501(c)(3) organization that
is not a private
foundation (and including an organization described in section 501(e), 501(f), 501(k), or 501(n)). It is also filed with Form
990, or Form 990-EZ, for
a section 4947(a)(1) nonexempt charitable trust that is not treated as a private foundation. An organization is not required
to file Schedule A (Form
990 or 990-EZ) if its gross receipts are normally $25,000 or less. See the gross receipts discussion in General Instruction
B.
Schedule B (Form 990, 990-EZ, or 990-PF).
Schedule of Contributors. Schedule B (Form 990, 990-EZ, or 990-PF) is used by all organizations required to file Form
990, 990-EZ, or 990-PF, to
provide the contributor information required for line 1 of those forms.
Form 941.
Employer's Quarterly Federal Tax Return. Used to report social security, Medicare, and income taxes withheld by an
employer and social security and
Medicare taxes paid by an employer.
Trust Fund Recovery Penalty.
If certain excise, income, social security, and Medicare taxes that must be collected or withheld are not collected
or withheld, or these taxes are
not paid to the IRS, a Trust Fund Recovery Penalty may apply. The Trust Fund Recovery Penalty may be imposed on all persons
(including volunteers) who
the IRS determines were responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in
not doing so.
This penalty does not apply to volunteer, unpaid members of any board of trustees or directors of a tax-exempt organization,
if these members are
solely serving in an honorary capacity, do not participate in the day-to-day or financial activities of the organization,
and do not have actual
knowledge of the failure to collect, account for, and pay over these taxes. However, the preceding sentence does not apply
if it results in no person
being liable for the penalty.
The penalty is equal to the unpaid trust fund tax. See the instructions for Pub. 15 (Circular E), Employer's Tax Guide, for more
details, including the definition of responsible persons.
Form 990-T.
Exempt Organization Business Income Tax Return. Filed separately for organizations with gross income of $1,000 or
more from business unrelated to
the organization's exempt purpose. The Form 990-T is also filed to pay the section 6033(e)(2) proxy tax. For Form 990, see
line 85 and its
instructions; for Form 990-EZ, see line 35 and its instructions.
Form 1041.
U.S. Income Tax Return for Estates and Trusts. Required of section 4947(a)(1) nonexempt charitable trusts that also
file Form 990 or Form 990-EZ.
However, if such a trust does not have any taxable income under Subtitle A of the Code, it can file Form 990, or Form 990-EZ,
and does not have to
file Form 1041 to meet its section 6012 filing requirement. If this condition is met, complete Form 990, or Form 990-EZ, and
do not file Form 1041.
A section 4947(a)(1) nonexempt charitable trust that normally has gross receipts of not more than $25,000 (see the
gross receipts discussion in
General Instruction B) and has no taxable income under Subtitle A must complete line 92 and the signature block on page 6
of the Form 990. On the Form
990-EZ, complete line 43 and the signature block on page 2 of the return. In addition, complete only the following items in
the heading of Form 990 or
Form 990-EZ:
Form 1098 series.
Information returns to report student loan interest and tuition and related expenses received.
Form 1099 series.
Information returns to report acquisitions or abandonments of secured property, proceeds from broker and barter exchange
transactions, cancellation
of debt, dividends and distributions, certain government and state qualified tuition program payments, taxable distributions
from cooperatives,
interest payments, payments of long-term care and accelerated death benefits, miscellaneous income payments, distributions
from a medical savings
account, original issue discount, distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, insurance
contracts, etc., and
proceeds from real estate transactions. Also, use certain of these returns to report amounts that were received as a nominee
on behalf of another
person.
Form 4720.
Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the Internal Revenue Code.
Form 5500.
Annual Return/Report of Employee Benefit Plan. Employers who maintain pension, profit-sharing, or other funded deferred
compensation plans are
generally required to file the Form 5500. This requirement applies whether or not the plan is qualified under the Internal
Revenue Code and whether or
not a deduction is claimed for the current tax year.
Form 5768.
Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation.
Form 8282.
Donee Information Return. Required of the donee of “charitable deduction property” who sells, exchanges, or otherwise disposes of the property
within 2 years after receiving the property.
The form is also required of any successor donee who disposes of charitable deduction property within 2 years after
the date that the donor gave
the property to the original donee. It does not matter who gave the property to the successor donee. It may have been the
original donee or another
successor donee.
Form 8300.
Report of Cash Payments Over $10,000 Received in a Trade or Business. Used to report cash amounts in excess of $10,000
that were received in a
single transaction (or in two or more related transactions) in the course of a trade or business (as defined in section 162).
However, if the organization receives a charitable cash contribution in excess of $10,000, it is not subject to the
reporting requirement since the
funds were not received in the course of a trade or business.
Form 8822.
Change of Address. Used to notify the IRS of a change in mailing address that occurs after the return is filed.
Some states and local government units will accept a copy of Form 990, or Form 990-EZ, Schedule A (Form 990 or 990-EZ), and Schedule B (Form 990, 990-EZ, or 990-PF) in place of all or part of their own financial report forms. The substitution applies primarily to section 501(c)(3) organizations, but some of the other types of section 501(c) organizations are also affected. If you use Form 990, or Form 990-EZ, to satisfy state or local filing requirements, such as those under state charitable solicitation acts, note the following— You should consult the appropriate officials of all states and other jurisdictions in which the organization does business to determine their specific filing requirements. “Doing business” in a jurisdiction may include any of the following: (a) soliciting contributions or grants by mail or otherwise from individuals, businesses, or other charitable organizations; (b) conducting programs; (c) having employees within that jurisdiction; (d) maintaining a checking account; or (e) owning or renting property there. Some or all of the dollar limitations applicable to Form 990, or Form 990-EZ, when filed with the IRS may not apply when using Form 990, or Form 990-EZ, in place of state or local report forms. Examples of the IRS dollar limitations that do not meet some state requirements are the $25,000 gross receipts minimum that creates an obligation to file with the IRS (see the gross receipts discussion in General Instruction B) and the $50,000 minimum for listing professional fees in Part II of Schedule A (Form 990 or 990-EZ). State or local filing requirements may require you to attach to Form 990, or Form 990-EZ, one or more of the following: (a) additional financial statements, such as a complete analysis of functional expenses or a statement of changes in net assets; (b) notes to financial statements; (c) additional financial schedules; (d) a report on the financial statements by an independent accountant; and (e) answers to additional questions and other information. Each jurisdiction may require the additional material to be presented on forms they provide. The additional information does not have to be submitted with the Form 990, or Form 990-EZ, filed with the IRS. Even if the Form 990, or Form 990-EZ, that the organization files with the IRS is accepted by the IRS as complete, a copy of the same return filed with a state will not fully satisfy that state's filing requirement if required information is not provided, including any of the additional information discussed above, or if the state determines that the form was not completed by following the applicable Form 990, or Form 990-EZ, instructions or supplemental state instructions. If so, the organization may be asked to provide the missing information or to submit an amended return. To ensure that all organizations report similar transactions uniformly, many states require that contributions, gifts, grants, etc., and functional expenses be reported according to the AICPA industry audit and accounting guide, Not-for-Profit Organizations (New York, NY, AICPA, 2003), supplemented by Standards of Accounting and Financial Reporting for Voluntary Health and Welfare Organizations (Washington, DC, National Health Council, Inc., 1998, 4th edition). Even though reporting donated services and facilities as items of revenue and expense is called for in certain circumstances by the two publications named above, many states and the IRS do not permit the inclusion of those amounts in Parts I and II of Form 990 or Part I of Form 990-EZ. The optional reporting of donated services and facilities is discussed in the instructions for Part III for both Form 990 and Form 990-EZ. If the organization submits supplemental information or files an amended Form 990, or Form 990-EZ, with the IRS, it must also send a copy of the information or amended return to any state with which it filed a copy of Form 990, or Form 990-EZ, originally to meet that state's filing requirement. If a state requires the organization to file an amended Form 990, or Form 990-EZ, to correct conflicts with Form 990, or Form 990-EZ, instructions, it must also file an amended return with the IRS. Most states require that all amounts be reported based on the accrual method of accounting. See also General Instruction G. The deadline for filing Form 990, or Form 990-EZ, with the IRS differs from the time for filing reports with some states. Except as provided below, the Internal Revenue Service will not accept any form as a substitute for one or more parts of Form 990 or Form 990-EZ. A labor organization that files Form LM-2, Labor Organization Annual Report, or the shorter Form LM-3, Labor Organization Annual Report, with the U.S. Department of Labor (DOL) can attach a copy of the completed DOL form to Form 990, or Form 990-EZ, to provide some of the information required by Form 990 or Form 990-EZ. This substitution is not permitted if the organization files a DOL report that consolidates its financial statements with those of one or more separate subsidiary organizations. An employee benefit plan may be able to substitute Form 5500 for part of Form 990 or Form 990-EZ. The substitution can be made if the organization filing Form 990, or Form 990-EZ, and the plan filing Form 5500, meet all the following tests:
Whether an organization files Form 990, or Form 990-EZ, for a labor organization or for an employee benefit plan, the areas of Form 990, or Form 990-EZ, for which other forms can be substituted are the same. These areas are:
If an organization substitutes Form LM-2 or LM-3 for any of the Form 990, or Form 990-EZ, Parts or line items mentioned above, it must attach a reconciliation sheet to show the relationship between the amounts on the DOL forms and the amounts on Form 990 or Form 990-EZ. This is particularly true of the relationship of disbursements shown on the DOL forms and the total expenses on line 17, Part I, of both Form 990 and Form 990-EZ. The organization must make this reconciliation because the cash disbursements section of the DOL forms includes nonexpense items. If the organization substitutes Form LM-2, be sure to complete its separate schedule of expenses.
Note: For further information, see Pub. 538. Calendar year.
Use the 2003 Form 990, or Form 990-EZ, to report on the 2003 calendar year accounting period. A calendar year accounting
period begins on January 1
and ends on December 31.
Fiscal year.
If the organization has established a fiscal year accounting period, use the 2003 Form 990, or Form 990-EZ, to report
on the organization's fiscal
year that began in 2003 and ended 12 months later. A fiscal year accounting period should normally coincide with the natural
operating cycle of the
organization. Be certain to indicate in the heading of Form 990, or Form 990-EZ, the date the organization's fiscal year began
in 2003 and the date
the fiscal year ended in the year 2004.
Short period.
Use the 2003 Form 990, or Form 990-EZ, to report on a short accounting period (less than 12 months) that began in 2003 and ended
November 30, 2004, or earlier.
Because the Form 990, or Form 990-EZ, for the year 2004 may not be distributed until the year 2005, use the prior
year form, the 2003 Form 990, or
Form 990-EZ, to report on a short accounting period that begins in the year 2004 and ends November 30, 2004, or earlier. Strike
the 2003 year on the
form and show the year 2004.
If the organization changes its accounting period, it must file a return on Form 990, or Form 990-EZ, for the short
period resulting from the
change. Write “Change of Accounting Period” at the top of this short-period return.
If the organization changed its accounting period within the 10-calendar-year period that includes the beginning of
the short period, and it had a
Form 990, or Form 990-EZ, filing requirement at any time during that 10-year period, it must also attach a Form 1128 to the
short-period return. See
Rev. Proc. 85-58, 1985-2 C.B. 740.
Unless instructed otherwise, the organization should generally use the same accounting method on the return to figure revenue and expenses as it regularly uses to keep its books and records. To be acceptable for Form 990, or Form 990-EZ, reporting purposes, however, the method of accounting used must clearly reflect income. Generally, the organization must file Form 3115 to change its accounting method. Notice 96-30, 1996-1 C.B. 378, provides relief from filing Form 3115 to section 501(c) organizations that change their methods of accounting to comply with the provisions of SFAS 116, Accounting for Contributions Received and Contributions Made. In SFAS 116, the Financial Accounting Standards Board revised certain generally accepted accounting principles relating to contributions received and contributions awarded by not-for-profit organizations. A not-for-profit organization that changes its method of accounting for Federal income tax purposes to conform to the method provided in SFAS 116 should report any adjustment required by section 481(a) on line 20 of Form 990, or Form 990-EZ, as a net asset adjustment made during the year the change is made. The adjustment should be identified as the effect of changing to the method provided in SFAS 116. The beginning of year statement of financial position (balance sheet) should not be restated to reflect any prior period adjustments. State reporting.
If the organization prepares Form 990, or Form 990-EZ, for state reporting purposes, it may file an identical return
with the IRS even though the
return does not agree with the books of account, unless the way one or more items are reported on the state return conflicts
with the instructions for
preparing Form 990, or Form 990-EZ, for filing with the IRS.
Example 1. The organization maintains its books on the cash receipts and disbursements method of accounting but prepares a state return based on the accrual method. It could use that return for reporting to the IRS. Example 2. A state reporting requirement requires the organization to report certain revenue, expense, or balance sheet items differently from the way it normally accounts for them on its books. A Form 990, or Form 990-EZ, prepared for that state is acceptable for the IRS reporting purposes if the state reporting requirement does not conflict with the Form 990, or Form 990-EZ, instructions. File Form 990, or Form 990-EZ, by the 15th day of the 5th month after the organization's accounting period ends. If the regular due date falls on a Saturday, Sunday, or legal holiday, file on the next business day. A business day is any day that is not a Saturday, Sunday, or legal holiday. If the organization is liquidated, dissolved, or terminated, file the return by the 15th day of the 5th month after the liquidation, dissolution, or termination. If the return is not filed by the due date (including any extension granted), attach a statement giving the reasons for not filing on time. Send the return to the Internal Revenue Service Center
Ogden, UT 84201-0027. Private delivery services.
You can use certain private delivery services designated by the IRS to meet the “timely mailing as timely filing/paying” rule for tax returns
and payments. The most recent list of designated private delivery services was published by the IRS in September 2002. The
list includes only the
following:
Use Form 8868 to request an automatic 3-month extension of time to file. Use Form 8868 also to apply for an additional (not automatic) 3-month extension if the original 3 months was not enough time. To obtain this additional extension of time to file, you must show reasonable cause for the additional time requested. See the instructions for Form 8868. To change the organization's return for any year, file a new return including any required attachments. Use the revision of Form 990, or Form 990-EZ, applicable to the year being amended. The amended return must provide all the information called for by the form and instructions, not just the new or corrected information. Check the “Amended return” box in the heading of the return. The organization may file an amended return at any time to change or add to the information reported on a previously filed return for the same period. It must make the amended return available for public inspection for 3 years from the date of filing or 3 years from the date the original return was due, whichever is later. The organization must also send a copy of the information or amended return to any state with which it filed a copy of Form 990, or Form 990-EZ, originally to meet that state's filing requirement. Use Form 4506-A to obtain a copy of a previously filed return. You can obtain blank forms for prior years by calling 1-800-TAX-FORM (1-800-829-3676). If the return is a final return, see the specific instructions for Form 990 for line 79, Part VI. For Form 990-EZ, see the specific instructions for line 36, Part V. Under section 6652(c)(1)(A), a penalty of $20 a day, not to exceed the smaller of $10,000 or 5% of the gross receipts of the organization for the year, may be charged when a return is filed late, unless the organization can show that the late filing was due to reasonable cause. Organizations with annual gross receipts exceeding $1 million are subject to a penalty of $100 for each day the failure continues (with a maximum penalty with respect to any one return of $50,000). The penalty begins on the due date for filing the Form 990 or Form 990-EZ. The penalty may also be charged if the organization files an incomplete return. To avoid having to supply missing information later, be sure to complete all applicable line items; answer “Yes,” “No,” or “N/A” (not applicable) to each question on the return; make an entry (including a zero when appropriate) on all total lines; and enter “None” or “N/A” if an entire part does not apply. Also, this penalty may be imposed if the organization's return contains incorrect information. For example, an organization that reports contributions net of related fundraising expenses may be subject to this penalty. Use of a paid preparer does not relieve the organization of its responsibility to file a complete and accurate return. If the organization does not file a complete return or does not furnish correct information, the IRS will send the organization a letter that includes a fixed time to fulfill these requirements. After that period expires, the person failing to comply will be charged a penalty of $10 a day. The maximum penalty on all persons for failures with respect to any one return shall not exceed $5,000 (section 6652(c)(1)(B)(ii)). Any person who does not comply with the public inspection requirements, as discussed in General Instruction M, will be assessed a penalty of $20 for each day that inspection was not permitted, up to a maximum of $10,000 for each return. The penalties for failure to comply with the public inspection requirements for applications is the same as those for annual returns, except that the $10,000 limitation does not apply (sections 6652(c)(1)(C) and (D)). Any person who willfully fails to comply with the public inspection requirements for annual returns or exemption applications will be subject to an additional penalty of $5,000 (section 6685). There are also penalties—fines and imprisonment—for willfully not filing returns and for filing fraudulent returns and statements with the IRS (sections 7203, 7206, and 7207). States may impose additional penalties for failure to meet their separate filing requirements. See also the discussion of the Trust Fund Recovery Penalty, General Instruction D. Schedule B (Form 990, 990-EZ, or 990-PF) is a required attachment for the Form 990, 990-EZ, or 990-PF, and is used to report on tax-deductible and non-tax-deductible contributions. See the instructions for Schedule B for the public inspection rules applicable to that form. See also the Specific Instructions for both Form 990 and Form 990-EZ, under Completing the Heading . . .where the instructions are keyed to items in the heading of Form 990 or Form 990-EZ. Any fundraising solicitation by or on behalf of any section 501(c) or 527 organization that is not eligible to receive contributions deductible as charitable contributions for Federal income tax purposes must include an explicit statement that contributions or gifts to it are not deductible as charitable contributions. The statement must be in an easily recognizable format whether the solicitation is made in written or printed form, by television or radio, or by telephone. This provision applies only to those organizations whose annual gross receipts are normally more than $100,000 (section 6113 and Notice 88-120, 1988-2 C.B. 454). Failure to disclose that contributions are not deductible could result in a penalty of $1,000 for each day on which a failure occurs. The maximum penalty for failures by any organization, during any calendar year, shall not exceed $10,000. In cases where the failure to make the disclosure is due to intentional disregard of the law, more severe penalties apply. No penalty will be imposed if the failure is due to reasonable cause (section 6710). Section 501(c) organizations that are eligible to receive tax-deductible contributions under section 170(c) of the Code must keep sample copies of their fundraising materials, such as:
For each fundraising event, organizations must keep records to show that portion of any payment received from patrons that is not deductible; that is, the retail value of the goods or services received by the patrons. See “Disclosure statement for quid pro quo contributions” below. See the instructions for Schedule B (Form 990, 990-EZ, or 990-PF). If the organization received a partially completed Form 8283 from a donor, complete it and return it so the donor can get a charitable contribution deduction. Keep a copy for your records. See also the reference to Form 8282 in General Instruction D. Acknowledgment to substantiate charitable contributions.
An organization (donee) should be aware that a donor of a charitable contribution of $250 or more cannot take an income
tax deduction unless the
donor obtains the organization's acknowledgment to substantiate the charitable contribution.
The organization's acknowledgment must:
Exception.
An organization need not make a good faith estimate of a quid pro quo contribution if the goods or services given
to a donor are:
Disclosure statement for quid pro quo contributions.
If the organization receives a quid pro quo contribution of more than $75, an organization must provide a disclosure
statement to the donor. The
organization's disclosure statement must:
Exception: No disclosure statement is required if the organization gave:
Certain goods or services disregarded for substantiation and disclosure purposes.
Goods or services with insubstantial value.
Generally, under section 170, the deductible amount of a contribution is determined by taking into account the fair
market value, not the cost to
the charity, of any benefits received in return. However, the cost to the charity may be used in determining whether the benefits
are insubstantial.
See below.
Cost basis.
If a taxpayer makes a payment of $40.00 or more to a charity and receives only token items in return, the items have
insubstantial value if they:
Fair market value basis.
If a taxpayer makes a payment to a charitable organization in a fundraising campaign and receives benefits with a
fair market value of not more
than 2% of the amount of the payment, or $80, whichever is less, the benefits received have insubstantial value in determining
the taxpayer's
contribution.
The dollar amounts given above are applicable to tax year 2003. They are adjusted annually for inflation.
When a donee organization provides a donor only with goods or services having insubstantial value under Rev. Proc.
2002-70, 2002-46 I.R.B. 845
(2002-2 C.B. 845) (and any successor documents), the contemporaneous written acknowledgment may indicate that no goods or
services were provided in
exchange for the donor's payment.
Certain membership benefits.
Other goods or services that are disregarded for substantiation and disclosure purposes are annual membership benefits
offered to a taxpayer in
exchange for a payment of $75 or less per year that consist of:
Examples.
Certain goods or services provided to donor's employees or partners.
Certain goods or services provided to employees or partners of donors may be disregarded for substantiation and disclosure
purposes. Describe such
goods or services. A good faith estimate is not needed.
Example. Museum J offers a basic membership benefits package for $40. It includes free admission and a 10% gift shop discount. Corporation K makes a $50,000 payment to J and in return, J offers K's employees free admission, a tee shirt with J's logo that costs J $4.50, and a 25% gift shop discount. Because the free admission is offered in both benefit packages and the value of the tee shirts is insubstantial, K's written acknowledgment need not value the free admission benefit or the tee shirts. However, because the 25% gift shop discount to K's employees differs from the 10% discount offered in the basic membership benefits package, K's written acknowledgment must describe the 25% discount, but need not estimate its value. Definitions.
Substantiation.
It is the responsibility of the donor:
Contemporaneous.
A written acknowledgment is contemporaneous if the donor obtains it on or before the earlier of:
Substantiation of payroll contributions.
An organization may substantiate a payroll contribution by:
Substantiation of payments to a college or university for the right to purchase tickets to athletic events.
The right to purchase tickets for an athletic event is valued at 20% of the payment.
Substantiation of matched payments.
If a taxpayer's payment to a donee organization is matched by another payor, and the taxpayer receives goods or services
in consideration for its
payment and some or all of the matching payment, those goods or services will be treated as provided in consideration for
the taxpayer's payment and
not in consideration for the matching payment.
Disclosure statement.
An organization must provide a written disclosure statement to donors who make a payment, described as a “quid pro quo contribution,” in
excess of $75 (section 6115). This requirement is separate from the written substantiation acknowledgment a donor needs for
deductibility purposes.
While, in certain circumstances, an organization may be able to meet both requirements with the same written document, an
organization must be careful
to satisfy the section 6115 written disclosure statement requirement in a timely manner because of the penalties involved.
Quid pro quo contribution.
A "quid pro quo contribution" is a payment that is given both as a contribution and as a payment for goods or services
provided by the donee
organization.
Example. A donor gives a charity $100 in consideration for a concert ticket valued at $40 (a quid pro quo contribution). In this example, $60 would be deductible. Because the donor's payment exceeds $75, the organization must furnish a disclosure statement even though the taxpayer's deductible amount does not exceed $75. Separate payments of $75 or less made at different times of the year for separate fundraising events will not be aggregated for purposes of the $75 threshold. Good faith estimate.
An organization may use any reasonable method in making a good faith estimate of the value of goods or services provided
by an organization in
consideration for a taxpayer's payment to that organization. A good faith estimate of the value of goods or services that
are not generally available
in a commercial transaction may be determined by reference to the fair market value of similar or comparable goods or services.
Goods or services may
be similar or comparable even though they do not have the unique qualities of the goods or services that are being valued.
In consideration for.
A donee organization provides goods or services in consideration for a taxpayer's payment if, at the time the taxpayer
makes the payment to the
donee organization, the taxpayer receives, or expects to receive, goods or services in exchange for that payment.
Goods or services a donee organization provides in consideration for a payment by a taxpayer include goods or services
provided in a year other
than the year in which the donor makes the payment to the donee organization.
Intangible religious benefits.
Intangible religious benefits must be provided by organizations organized exclusively for religious purposes.
Examples include:
Distributing organization as donee.
An organization described in section 170(c), or an organization described as a Principal Combined Fund Organization
for purposes of the Combined
Federal Campaign, that receives a payment made as a contribution is treated as a donee organization even if the organization
distributes the amount
received to one or more organizations described in section 170(c).
Penalties.
A charity that knowingly provides a false substantiation acknowledgment to a donor may be subject to the penalties
under section 6701 for aiding and abetting an understatement of tax liability.
Charities that fail to provide the required disclosure statement for a quid pro quo contribution of more than $75
will incur a penalty of $10 per
contribution, not to exceed $5,000 per fundraising event or mailing. The charity may avoid the penalty if it can show that
the failure was due to
reasonable cause (section 6714).
Use Form 4506-A to request:
The IRS can provide copies of exempt organization returns on a compact disk (CD-ROM). Requesters can order the complete set (all Forms 990 and 990-EZ or all Forms 990-PF filed for a year) or a partial set by state or by month. For more information on the cost and how to order CD-ROMs, call the toll-free Phone-Help number (1-877-829-5500) or write to the IRS in Cincinnati, OH at the address in General Instruction A. The IRS may not disclose portions of an exemption application relating to any trade secrets, etc. See the instructions for Schedule B (Form 990, 990-EZ, or 990-PF) that discuss the disclosure of that schedule. You can only request Forms 990 or 990-EZ for section 527 organizations for tax years beginning after June 30, 2000. You may inspect a return, report, notice, or exemption application at an IRS office free of charge. You may also obtain a copy of these items through the organization as discussed in the following section. Public inspection and distribution of returns and reports for a political organization.
Section 527 political organizations required to file Form 990, or Form 990-EZ, must, in general, make their Form 8871,
8872, 990, or 990-EZ
available for public inspection in the same manner as annual information returns of section 501(c) organizations and 4947(a)(1)
nonexempt charitable
trusts are made available. See the public inspection rules for “tax-exempt organizations” below. Generally, Form 8871 and Form 8872 are available
for inspection and printing from the Internet. The website address for both of these forms is http://eforms.irs.gov.
Note that a section 527 political organization (and an organization filing Form 990-PF) must disclose their Schedule
B (Form 990, 990-EZ, or
990-PF), Schedule of Contributors. See the instructions for
Schedule B. The penalties discussed in General Instruction K also apply to section 527 political organizations (Rev. Rul. 2000-49, 2000-44 I.R.B. 430). Public inspection and distribution of applications for tax exemption and annual information returns of tax-exempt organizations.
Under Regulations sections 301.6104(d)-1 through 301.6104(d)-3, a tax-exempt organization must:
Definitions.
Tax-exempt organization
is any organization that is described in section 501(c) or (d) and is exempt from taxation under section 501(a). The
term tax-exempt organization
also includes any section 4947(a)(1) nonexempt charitable trust or nonexempt private foundation that is subject to the reporting
requirements of
section 6033.
Application for tax exemption
includes (except as described later):
Annual information return
includes:
Regional or district offices.
A regional or district office is any office of a tax-exempt organization, other than its principal office, that has
paid employees, whether
part-time or full-time, whose aggregate number of paid hours a week are normally at least 120.
A site is not considered a regional or district office, however, if—
The only services provided at the site further exempt purposes (such as day care, health care or scientific or medical
research); and
The site does not serve as an office for management staff, other than managers who are involved solely in managing
the exempt function activities
at the site.
Special rules relating to public inspection. Permissible conditions on public inspection.
A tax-exempt organization—
• May have an employee present in the room during an inspection. • Must allow the individual conducting the inspection to take notes freely during the inspection. • Must allow the individual to photocopy the document at no charge, if the individual provides photocopying equipment at the place of inspection. Organizations that do not maintain permanent offices.
A tax-exempt organization with no permanent office—
• Must make its application for tax exemption and its annual information returns available for inspection at a reasonable location of its choice. • Must permit public inspection within a reasonable amount of time after receiving a request for inspection (normally not more than 2 weeks) and at a reasonable time of day. • May mail, within 2 weeks of receiving the request, a copy of its application for tax exemption and annual information returns to the requester instead of allowing an inspection. • May charge the requester for copying and actual postage costs only if the requester consents to the charge. An organization that has a permanent office, but has no office hours, or very limited hours during certain times of the year, must make its documents available during those periods when office hours are limited, or not available, as though it were an organization without a permanent office. Special rules relating to copies. Time and place for providing copies in response to requests made in-person.
A tax-exempt organization must:
Unusual circumstances.
In the case of an in-person request, where unusual circumstances exist so that fulfilling the request on the same
business day causes an
unreasonable burden to the tax-exempt organization, the organization must provide the copies no later than the next business
day following the day
that the unusual circumstances cease to exist, or the 5th business day after the date of the request, whichever occurs first.
Unusual circumstances include:
Agents for providing copies.
For rules relating to use of agents to provide copies, see Regulations sections 301.6104(d)-1(d)(1)
and (2). Request for copies in writing.
A tax-exempt organization must honor a written request for a copy of documents (or the requested part) required under
section 6104(d) if the
request:
Time and manner of fulfilling written requests.
Request for a copy of parts of a document.
A tax-exempt organization must fulfill a request for a copy of the organization's entire application for tax exemption
or annual information return
or any specific part or schedule of its application or return. A request for a copy of less than the entire application or
less than the entire return
must specifically identify the requested part or schedule.
Fees for copies.
A tax-exempt organization may charge a reasonable fee for providing copies.
Before the organization provides the documents, it may require that the individual requesting copies of the documents
pay the fee. If the
organization has provided an individual making a request with notice of the fee, and the individual does not pay the fee within
30 days, or if the
individual pays the fee by check and the check does not clear upon deposit, the organization may disregard the request.
Form of payment—(A) Request made in person. If a tax-exempt organization charges a fee for copying, it must accept payment by cash
and money order for requests made in person. The organization may accept other forms of payment, such as credit cards and
personal checks.
(B) Request made in writing. If a tax-exempt organization charges a fee for copying and postage, it must accept payment by certified
check, money order, and either personal check or credit card for requests made in writing. The organization may accept other
forms of payment.
Avoidance of unexpected fees. Where a tax-exempt organization does not require prepayment and a requester does not enclose payment with
a request, an organization must receive consent from a requester before providing copies for which the fee charged for copying
and postage exceeds
$20.
Documents to be provided by regional and district offices.
Except as otherwise provided, a regional or district office of a tax-exempt organization must satisfy the same rules
as the principal office with
respect to allowing public inspection and providing copies of its application for tax exemption and annual information returns.
A regional or district office is not required, however, to make its annual information return available for inspection
or to provide copies until
30 days after the date the return is required to be filed (including any extension of time that is granted for filing such
return) or is actually
filed, whichever is later.
Documents to be provided by local and subordinate organizations.
Applications for tax exemption. Except as otherwise provided, a tax-exempt organization that did not file its own application for tax exemption (because it is a local or subordinate organization covered by a group exemption letter) must, upon request, make available for public inspection, or provide copies of, the application submitted to the IRS by the central or parent organization to obtain the group exemption letter and those documents which were submitted by the central or parent organization to include the local or subordinate organization in the group exemption letter. However, if the central or parent organization submits to the IRS a list or directory of local or subordinate organizations covered by the group exemption letter, the local or subordinate organization is required to provide only the application for the group exemption ruling and the pages of the list or directory that specifically refer to it. The local or subordinate organization must permit public inspection, or comply with a request for copies made in person, within a reasonable amount of time (normally not more than 2 weeks) after receiving a request made in person for public inspection or copies and at a reasonable time of day. See Regulations section 301.6104(d)-1(f) for further information. Annual information returns. A local or subordinate organization that does not file its own annual information return (because it is affiliated with a central or parent organization that files a group return) must, upon request, make available for public inspection, or provide copies of, the group returns filed by the central or parent organization. However, if the group return includes separate schedules with respect to each local or subordinate organization included in the group return, the local or subordinate organization receiving the request may omit any schedules relating only to other organizations included in the group return. The local or subordinate organization must permit public inspection, or comply with a request for copies made in person, within a reasonable amount of time (normally not more than 2 weeks) after receiving a request made in person for public inspection or copies and at a reasonable time of day. In a case where the requester seeks inspection, the local or subordinate organization may mail a copy of the applicable documents to the requester within the same time period instead of allowing an inspection. In such a case, the organization may charge the requester for copying and actual postage costs only if the requester consents to the charge. If the local or subordinate organization receives a written request for a copy of its annual information return, it must fulfill the request by providing a copy of the group return in the time and manner specified in the paragraph above, Request for copies in writing. The requester has the option of requesting from the central or parent organization, at its principal office, inspection or copies of group returns filed by the central or parent organization. The central or parent organization must fulfill such requests in the time and manner specified in the paragraphs, Special rules relating to public inspection and Special rules relating to copies above. Failure to comply. If an organization fails to comply with the requirements specified in this paragraph, the penalty provisions of sections 6652(c)(1)(C), 6652(c)(1)(D), and 6685 apply. Making applications and returns widely available.
A tax-exempt organization is not required to comply with a request for a copy of its application for tax exemption
or an annual information return
if the organization has made the requested document widely available (see below).
An organization that makes its application for tax exemption and/or annual information return widely available must
nevertheless make the document
available for public inspection as required under Regulations section 301.6104(d)-1(a).
A tax-exempt organization makes its application for tax exemption and/or an annual information return widely available
if the organization complies
with the Internet posting requirements and the notice requirements given below.
Internet posting.
A tax-exempt organization can make its application for tax exemption and/or an annual information return widely available
by posting the document
on a World Wide Web page that the tax-exempt organization establishes and maintains or by having the document posted, as part
of a database of similar
documents of other tax-exempt organizations, on a World Wide Web page established and maintained by another entity. The document
will be considered
widely available only if—
(A) The World Wide Web page through which it is available clearly informs readers that the document is available and
provides instructions for
downloading it;
(B) The document is posted in a format that, when accessed, downloaded, viewed and printed in hard copy, exactly reproduces
the image of the
application for tax exemption or annual information return as it was originally filed with the IRS, except for any information
permitted by statute to
be withheld from public disclosure; and
(C) Any individual with access to the Internet can access, download, view and print the document without special computer
hardware or software
required for that format (other than software that is readily available to members of the public without payment of any fee)
and without payment of a
fee to the tax-exempt organization or to another entity maintaining the World Wide Web page.
Reliability and accuracy. In order for the document to be widely available through an Internet posting, the entity maintaining the World
Wide Web page must have procedures for ensuring the reliability and accuracy of the document that it posts on the page and
must take reasonable
precautions to prevent alteration, destruction or accidental loss of the document when posted on its page. In the event that
a posted document is
altered, destroyed or lost, the entity must correct or replace the document.
Notice requirement.
If a tax-exempt organization has made its application for tax exemption and/or an annual information return widely
available, it must notify any
individual requesting a copy where the documents are available (including the address on the World Wide Web, if applicable).
If the request is made in
person, the organization must provide such notice to the individual immediately. If the request is made in writing, the notice
must be provided within
7 days of receiving the request.
Tax-exempt organization subject to harassment campaign.
If the Director EO Examination (or designee) determines that the organization is being harassed, a tax-exempt organization
is not required to
comply with any request for copies that it reasonably believes is part of a harassment campaign.
Whether a group of requests constitutes a harassment campaign depends on the relevant facts and circumstances such
as:
A sudden increase in requests; an extraordinary number of requests by form letters or similarly worded correspondence;
hostile requests; evidence
showing bad faith or deterrence of the organization's exempt purpose; prior provision of the requested documents to the purported
harassing group; and
a demonstration that the organization routinely provides copies of its documents upon request.
A tax-exempt organization may disregard any request for copies of all or part of any document beyond the first two
received within any
30-day-period or the first four received within any 1-year-period from the same individual or the same address, regardless
of whether the Director EO
Examination (or designee) has determined that the organization is subject to a harassment campaign.
A tax-exempt organization may apply for a determination that it is the subject of a harassment campaign and that compliance
with requests that are
part of the campaign would not be in the public interest by submitting a signed application to the Director EO Examination
(or designee) for the area
where the organization's principal office is located.
In addition, the organization may suspend compliance with any request it reasonably believes to be part of the harassment
campaign until it
receives a response to its application for a harassment campaign determination. However, if the Director EO Examination (or
designee) determines that
the organization did not have a reasonable basis for requesting a determination that it was subject to a harassment campaign
or reasonable belief that
a request was part of the campaign, the officer, director, trustee, employee, or other responsible individual of the organization
remains liable for
any penalties for not providing the copies in a timely fashion. See Regulations section 301.6104(d)-3.
A section 501(c) organization that offers to sell or solicits money for specific information or a routine service for any individual that could be obtained by such individual from a Federal government agency free or for a nominal charge must disclose that fact conspicuously when making such offer or solicitation. Any organization that intentionally disregards this requirement will be subject to a penalty for each day on which the offers or solicitations are made. The penalty imposed for a particular day is the greater of $1,000 or 50% of the total cost of the offers and solicitations made on that day that lacked the required disclosure (sect | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||