US Internal Revenue Service: i990--1995

8/14/2019 US Internal Revenue Service: i990--1995

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Cat. No. 11283J

Contents Page Changes To Note 1

General Instructions 18

A Who Must File 1

B Exempt Organization ReferenceChart 2

C Organizations Not Required To File 2

D Forms and Publications To File or Use 3

E Use of Form 990 To Satisfy State

Reporting Requirements 4F Other Forms as Partial Substitutesfor Form 990 4

G Accounting Period Covered 5

H When and Where To File 5

I Extension of Time To File 5

J Amended Return/Final Return 5

K Penalties 5

L Public Inspection of CompletedExempt Organization Returns andApproved Exemption Applicat ions 5

M Solicitations of NondeductibleContributions 6

N Disclosures Regarding CertainInformation and Services Furnished 6

O Disclosures Regarding CertainTransactions and Relationships 6

P Erroneous Backup Withholding 6

Q Group Return 6

R Organizations in Foreign Countriesand U.S. Possessions 6

S Substantiation, Disclosure, andLobbying Rules 7

Specific Instructions 89

Contents PagePart IRevenue, Expenses, and

Changes in Net Assets orFund Balances 9

Part IIStatement of FunctionalExpenses 14

Part IIIStatement of ProgramService Accomplishments 17

Part IVBalance Sheets 17

Parts IV-A and IV-BReconciliation

Statements 19Part VList of Officers, Directors,

Trustees, and Key Employees 19

Part VIOther Information 20

Part VIIAnalysis of Income-Producing Activities 23

Part VIIIRelationship of Activitiesto the Accomplishment ofExempt Purposes 24

Part IXInformation RegardingTaxable Subsidiaries 24

Exclusion Codes 25

Changes To Note As the result of Financial Accounting

Standard Boards (FASB) Statements ofFinancial Accounting Standards (SFAS) Nos.116, Accounting for Contributions Receivedand Contributions Made, and 117, FinancialStatements of Not-for-Profit Organizations,the Net Assets section of the financialstatements was changed. Not-for-profitorganizations are to classify their net assetsinto three classes based on the existence orabsence of donor-imposed restrictions. Thesestandards are effective for fiscal yearsbeginning after December 15, 1994. Smallorganizations can delay implementing thesestandards for one year. Organizations thatcomply with these standards need not file

Form 3115, Application for Change inAccounting Method, unless the changeaffects taxable income.

SFAS 117 eliminated the deferred restrictedrevenue requirement of SOP (Statement ofPosition) 78-10. Use line 62 of Form 990 toreport deferred revenue only.

Reporting contributions received and grantsand allocations made (on lines 1 and 22), inaccordance with SFAS 116, is acceptable forForm 990 purposes, but not required by IRS.

An organization must use the reconciliationstatements in Parts IV-A and IV-B to reconcile

its audited financial statements with its Form990 if the audited financial statements wereprepared in accordance with SFAS 117.

Line 83b was added to Form 990 to inquirewhether the organization complied with thequid pro quo contribution disclosurerequirements.

The allocation of costs to lobbying activitiesand influencing legislation discussed inRegulations sections 1.162-28 and 1.162-29are covered In General Instruction S.

The instructions for line 85a, Section6033(e)(3) exception for nondeductible dues,were amended because of Rev. Proc. 95-35,1995-32 I.R.B. 51 and Rev. Proc. 95-35A,1995-40 I.R.B. 38.

General InstructionsNote: An organizations completed Form 990(except for the schedule of contributors) isavailable for public inspection as required bysection 6104.

Some members of the public rely on Form990 as the primary or sole source ofinformation about a particular organization.How the public perceives an organization insuch cases may be determined by theinformation presented on its return. Therefore,please make sure the return is complete andaccurate and fully describes theorganizations programs andaccomplishments.

Purpose of FormForm 990 is used by tax-exemptorganizations and nonexempt charitabletrusts to provide the IRS with the informationrequired by section 6033.

The Form 990 may also be used to transmitelections that are required to be submitted tothe IRS, such as the election to capitalizecosts under section 266.

A. Who Must File

Filing tests

If the organization does not meet any of theexceptions listed in General Instruction C andits annual gross receipts are normally morethan $25,000 (see the gross receipts

discussion in General Instruction C), it mustfile Form 990. If the organizations grossreceipts during the year are less than$100,000 and its total assets at the end ofthe year are less than $250,000, it may fileForm 990-EZ, Short Form Return ofOrganization Exempt From Income Tax,instead of Form 990. Even if the organizationmeets this test, it can still file Form 990.

Smaller organizations applying toparticipate in the Combined FederalCampaign may submit a completed Form990-EZ (instead of Form 990) to the Office ofPersonnel Management (OPM).

Instructions for Form 990Return of Organization Exempt From Income TaxUnder section 501(c) of the Internal Revenue Code (except black lungbenefit trust or private foundation) or section 4947(a)(1) nonexemptcharitable trust

Section references are to the Internal Revenue Code unless otherwise indicated.

Paperwork Reduction Act Notice.We ask for the information on this form to carry out theInternal Revenue laws of the United States. You are required to give us the information. Weneed it to ensure that you are complying with these laws.

The time needed to complete and file this form and related schedules will vary depending onindividual circumstances. The estimated average times are:

Copying,assembling, andsending the form

to the IRS

Preparingthe

form

Learning aboutthe law or the

formRecordkeepingForm

48 min.23 hr., 5 min.17 hr., 59 min.92 hr., 47 min.990

-0-10 hr., 28 min.9 hr., 14 min.49 hr., 59 min.Schedule A(Form 990)

If you have comments concerning the accuracy of these time estimates or suggestions formaking these forms simpler, we would be happy to hear from you. You can write to the TaxForms Committee, Western Area Distribution Center, Rancho Cordova, CA 95743-0001. DONOT send the form to this address. Instead, see When and Where To File.

Department of the TreasuryInternal Revenue Service


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However, these organizations must alsosubmit to OPM, attached to the Form990-EZ, pages 1 and 2 of Form 990 with thefollowing completed: Part I, lines 1a-1d and13-15; Part II, all lines. These organizationsshould not send this Form 990 attachment toIRS.

Section 501(a), (e), (f), and (k) organizations

Except for those types of organizations listedin General Instruction C, an annual return onForm 990 (or Form 990-EZ) is required fromevery organization exempt from tax undersection 501(a), including foreign organizations

and cooperative service organizationsdescribed in sections 501(e) and (f), and childcare organizations described in section501(k). Section 501(c)(3), 501(e), (f), and (k)organizations must also attach a completedSchedule A (Form 990), Organization ExemptUnder Section 501(c)(3), to their Form 990 (orForm 990-EZ).

Section 4947(a)(1) nonexempt charitabletrusts

Any nonexempt charitable trust (described insection 4947(a)(1)) not treated as a privatefoundation is also required to file Form 990(or Form 990-EZ), along with a completedSchedule A (Form 990). See the discussion inGeneral Instruction D for exceptions to filing

Form 1041, U.S. Income Tax Return forEstates and Trusts.

If an organizations exemption applicationis pending

If the organizations application for exemptionis pending, check the Application pendingbox in the heading of the return (item F) andcomplete the return.

If the organization received a Form 990Package

If the organization received a Form 990Package with a preaddressed label, we askthat the organization file a return even if it isnot required to do so. Attach the label to thename and address space on the return (seeSpecific Instructions). Check the box in

item K in the heading of the Form 990 toindicate that the organizations gross receiptsare normally not more than $25,000; sign thereturn; and send it to the service center forthe organizations area. The organization doesnot have to complete Parts I through IX of thereturn. Following this instruction will help usto update our records, and we will not haveto contact the organization later to ask whyno return was filed. If the organization files areturn this way, it will not be mailed a Form990 Package in later years and does not haveto file Form 990 (or Form 990-EZ) again untilits gross receipts are normally more than$25,000, or it terminates or undergoes asubstantial contraction as described in theinstructions for line 79.

Exempt organizations that filed Form 990but are no longer required to file becausethey meet a specific exemption (other thanexemption 12 in General Instruction C) shouldadvise their key District office so their filingstatus can be updated. Exempt organizationsthat are not sure of their key District officemay call the IRS toll-free number(1-800-829-1040). Exempt organizations thatstop filing Form 990 without notifying theirkey District office may receive service centercorrespondence inquiring about their returns.These organizations should refer to thespecific reason for having stopped filing whenresponding to these inquiries.

Failure to file and its effect oncontributions

Organizations that are eligible to receive taxdeductible contributions are listed inPublication 78, Cumulative List ofOrganizations described in Section 170(c) ofthe Internal Revenue Code of 1986. Anorganization may be removed from this listingif our records show that it is required to fileForm 990 (or Form 990-EZ), but it does notfile a return or advise us that it is no longerrequired to file. However, contributions tosuch an organization may continue to bedeductible by the general public until the IRSpublishes a notice to the contrary in theInternal Revenue Bulletin.

B. Exempt OrganizationReference Chart

Type ofOrganization I.R.C. section

Corporations Organized Under Act ofCongress 501(c)(1)

Title Holding Corporations 501(c)(2)

Charitable, Religious, Educational,Scientific, etc., Organizations 501(c)(3)

Civic Leagues and Soc ial WelfareOrganizations 501(c)(4)

Labor, Agricultural, and HorticulturalOrganizations 501(c)(5)

Business Leagues, etc. 501(c)(6)Social and Recreation Clubs 501(c)(7)

Fraternal Beneficiary and DomesticFraternal Societies and Associations 501(c)(8) & (10)

Voluntary Employees BeneficiaryAssociations 501(c)(9)

Teachers Retirement Fund Associations 501(c)(11)

Benevolent Life Insurance Associations,Mutual Ditch or Irrigation Companies,Mutual or Cooperative TelephoneCompanies, etc. 501(c)(12)

Cemetery Companies 501(c)(13)

State Chartered Credit Unions, MutualReserve Funds 501(c)(14)

Mutual Insurance Companies orAssociations 501(c)(15)

Cooperative Organizations To Finance CropOperations 501(c)(16)

Supplemental Unemployment BenefitTrusts 501(c)(17)

Employee Funded Pension Trusts (createdbefore 6/25/59) 501(c)(18)

Organizations of Past or PresentMembers of the Armed Forces 501(c)(19) & (23)

Black Lung Benefit Trusts 501(c)(21)

Withdrawal Liab ilit y Payment Funds 501(c)(22)

Tit le Ho ld ing Corporat ions or Trust s 501(c)(25)

Religious and Apostolic Associations 501(d)

Cooperative Hospital Service Organizations 501(e)

Cooperative Service Organizations ofOp erating Educational Organizations 501(f)

Child Care Organizations 501(k)

C. Organizations Not RequiredTo FileNote: Organizations not required to file this

form with the IRS may wish to use it to satisfystate reporting requirements. For details, seeGeneral Instruction E.

The following types of organizationsexempt from tax under section 501(a) do nothave to file Form 990 (or Form 990-EZ) withthe IRS:

1. A church, an interchurch organization oflocal units of a church, a convention orassociation of churches, an integratedauxiliary of a church (such as a mens orwomens organization, religious school,mission society, or youth group), or aninternally supported, church-controlled

organization described in Rev. Proc. 86-23,1986-1 C.B. 564.

2. A school below college level affiliatedwith a church or operated by a religiousorder.

3. A mission society sponsored by, oraffiliated with, one or more churches orchurch denominations, if more than half ofthe societys activities are conducted in, ordirected at persons in, foreign countries.

4. An exclusively religious activity of anyreligious order.

5. A state institution whose income is

excluded from gross income under section115.

6. An organization described in section501(c)(1). Section 501(c)(1) organizations arecorporations organized under an Act ofCongress that are:

Instrumentalities of the United States, and

Exempt from Federal income taxes.

7. A private foundation exempt undersection 501(c)(3) and described in section509(a). (Required to file Form 990-PF, Returnof Private Foundation.)

8. A black lung benefit trust described insection 501(c)(21). (Required to file Form990-BL, Information and Initial Excise TaxReturn for Black Lung Benefit Trusts and

Certain Related Persons.)9. A stock bonus, pension, or profit-sharing

trust that qualifies under section 401. (SeeForm 5500, Annual Return/Report ofEmployee Benefit Plan.)

10. A religious or apostolic organizationdescribed in section 501(d). (Required to fileForm 1065, U.S. Partnership Return ofIncome.)

11. A foreign organization whose annualgross receipts from sources within the U.S.are normally $25,000 or less (Rev. Proc.94-17, 1994-1 C.B. 579). See $25,000 grossreceipts test in 12c. See also GeneralInstruction A if the organization received aForm 990 Package.

12. An organization whose annual grossreceipts are normally $25,000 or less (but seeGeneral Instruction A if the organizationreceived a Form 990 Package).

a. Calculating gross receipts.Grossreceipts are the sum of lines 1d, 2, 3, 4, 5,6a, 7, 8a (both columns), 9a, 10a, and 11 ofPart I. The organizations gross receipts arethe total amount it received from all sourcesduring its annual accounting period, withoutsubtracting any costs or expenses.

b. Gross receipts when acting asagent.If a local chapter of a section501(c)(8) fraternal organization collectsinsurance premiums for its parent lodge andmerely sends those premiums to the parentwithout asserting any right to use the funds

or otherwise deriving any benefit fromcollecting them, the local chapter should notinclude the premiums in its gross receipts.The parent lodge should report them instead.The same treatment applies in othersituations in which one organization collectsfunds merely as an agent for another.

c. $25,000 gross receipts test.Anorganizations gross receipts are considerednormally to be $25,000 or less if theorganization is:

(1) Up to a year old and has received, ordonors have pledged to give, $37,500 or lessduring its first tax year;


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(2) Between 1 and 3 years old andaveraged $30,000 or less in gross receiptsduring each of its first 2 tax years; or

(3) Three (3) years old or more andaveraged $25,000 or less in gross receipts forthe immediately preceding 3 tax years(including the year for which the return wouldbe filed).

13. A governmental unit or affiliate of agovernmental unit described in Rev. Proc.95-48, 1995-47 I.R.B 13.

D. Forms and Publications To

File or UseThese forms and publications are available atmany IRS offices or by calling1-800-TAX-FORM (1-800-829-3676).

If you have a computer and a modem, youcan use them to get tax forms andpublications. If you subscribe to an on-lineservice, ask if IRS information is availableand, if so, how to access it. You can also getinformation through IRIS, the InternalRevenue Information Service, on FedWorld, agovernment bulletin board. Tax forms,instructions, publications, and other IRSinformation are available through IRIS.

IRIS is accessible directly by calling1-703-321-8020. On the Internet, you cantelnet to fedworld.gov or, for file transferprotocol services, connect toftp.fedworld.gov. If you are using theWorld Wide Web, connect tohttp://www.ustreas.gov.

FedWorlds help desk offers technicalassistance on accessing IRIS (not tax help)during regular business hours at1-703-487-4608. The IRIS menus offerinformation on available file formats andsoftware needed to read and print files. Youmust print the forms to use them; the formsare not designed to be filled out on-screen.

Tax forms, instructions, and publicationsare also available on CD-ROM, includingprior-year forms starting with the 1991 taxyear. For ordering information and softwarerequirements, contact the GovernmentPrinting Offices Superintendent ofDocuments (1-202-512-1800) or FederalBulletin Board (1-202-512-1387).

Schedule A (Form 990)

Organization Exempt Under Section 501(c)(3)(Except Private Foundation), 501(e), 501(f),501(k), or Section 4947(a)(1) NonexemptCharitable Trust. Filed with Form 990 (or Form990-EZ) for a section 501(c)(3) organizationthat is not a private foundation (and includingan organization described in section 501(e),501(f), or 501(k)). Also filed with Form 990 (orForm 990-EZ) for a section 4947(a)(1)nonexempt charitable trust that is not treatedas a private foundation. An organization is notrequired to file Schedule A (Form 990) if its

gross receipts are normally $25,000 or less(see the gross receipts discussion in GeneralInstruction C).

Forms W-2 and W-3

Wage and Tax Statement, and Transmittal ofIncome and Tax Statements.

Form 940

Employers Annual Federal Unemployment(FUTA) Tax Return.

Form 941

Employers Quarterly Federal Tax Return.Used to report social security, Medicare, and

income taxes withheld by an employer andsocial security and Medicare taxes paid by anemployer.

If certain excise, income, social security,and Medicare taxes that must be collected orwithheld are not collected or withheld, orthese taxes are not paid to the IRS, a trustfund recovery penalty may apply. The trustfund recovery penalty may be imposed on allpersons (including volunteers) who the IRSdetermines were responsible for collecting,accounting for, and paying over these taxes,and who acted willfully in not doing so. Thepenalty is equal to the unpaid trust fund tax.See the instructions for Pub. 15 (Circular E),Employers Tax Guide, for more details,including the definition of responsiblepersons.

Form 990-T

Exempt Organization Business Income TaxReturn. Filed separately for organizations withgross income of $1,000 or more frombusiness unrelated to the organizationsexempt purpose; also filed to pay the section6033(e)(2) proxy tax (see line 85 and itsinstructions).

Form 990-W

Estimated Tax on Unrelated Business TaxableIncome for Tax-Exempt Organizations.

Form 1041

U.S. Income Tax Return for Estates andTrusts. (Required of section 4947(a)(1)nonexempt charitable trusts that also fileForm 990 (or Form 990-EZ)). However, if sucha trust does not have any taxable incomeunder Subtitle A of the Code, it can file Form990 (or Form 990-EZ) and does not have tofile Form 1041 to meet its section 6012 filingrequirement. If this condition is met, completeForm 990 and do not file Form 1041. Asection 4947(a)(1) nonexempt charitable trustthat normally has gross receipts of not morethan $25,000 (see the gross receiptsdiscussion in General Instruction C) and hasno taxable income under Subtitle A mustcomplete only the following items in theheading of Form 990:

Item

A. Tax year (fiscal year or short period, ifapplicable)

B. Applicable check boxes

C. Name and address

D. Employer identification number

G. Section 4947(a)(1) nonexempt charitabletrust box. (Also, complete line 92 and thesignature block on page 6.)

Form 1096

Annual Summary and Transmittal of U.S.Information Returns.

Form 1099 SeriesInformation returns for reporting paymentssuch as dividends, interest, miscellaneousincome (including medical and health carepayments and nonemployee compensation),original issue discount, patronage dividends,real estate transactions, acquisition orabandonment of secured property, dischargeof indebtedness, and distributions fromannuities, pensions, and profit-sharing andretirement plans.

Form 1120-POL

U.S. Income Tax Return for Certain PoliticalOrganizations.

Form 1128

Application To Adopt, Change, or Retain aTax Year.

Form 2758

Application for Extension of Time To FileCertain Excise, Income, Information, andOther Returns.

Form 4506-A

Request for Public Inspection or Copy ofExempt Organization Tax Form.

Form 4720

Return of Certain Excise Taxes on Charitiesand Other Persons Under Chapters 41 and 42of the Internal Revenue Code. Section501(c)(3) organizations that file Form 990 (orForm 990-EZ), as well as the managers ofthese organizations, use this form to reporttheir tax on political expenditures and certainlobbying expenditures.

Form 5500, 5500-C/R

Employers who maintain pension,profit-sharing, or other funded deferredcompensation plans are generally required tofile one of the 5500 series forms specifiedbelow. This requirement applies whether ornot the plan is qualified under the InternalRevenue Code and whether or not adeduction is claimed for the current tax year.

Plans with 100 or more participants mustfile Form 5500, Annual Return/Report ofEmployee Benefit Plan.

Plans with fewer than 100 participants mustfile Form 5500-C/R, Return/Report ofEmployee Benefit Plan.

Form 5768

Election/Revocation of Election by an EligibleSection 501(c)(3) Organization To MakeExpenditures To Influence Legislation.

Form 8282

Donee Information Return. Required of thedonee of charitable deduction property whosells, exchanges, or otherwise disposes of theproperty within 2 years after receiving theproperty.

Also, the form is required of any successordonee who disposes of charitable deductionproperty within 2 years after the date that thedonor gave the property to the original donee.It does not matter who gave the property tothe successor donee. It may have been theoriginal donee or another successor donee.

Form 8300

Report of Cash Payments Over $10,000Received in a Trade or Business. Used toreport cash amounts in excess of $10,000that were received in a single transaction (orin two or more related transactions) in thecourse of a trade or business (as defined insection 162).

However, if the organization receives acharitable cash contribution in excess of$10,000, it is not subject to the reportingrequirement since the funds were notreceived in the course of a trade or business.


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Form 8822

Change of Address. Used to notify the IRS ofa change in mailing address that occurs afterthe return is filed.

Forms 8038, 8038-G, and 8038-GC

Information Return for Tax-Exempt PrivateActivity Bond Issues; Information Return forTax-Exempt Governmental Obligations; andInformation Return for Small Tax-ExemptGovernmental Bond Issues, Leases, andInstallment Sales, respectively.

Publication 525

Taxable and Nontaxable Income.

Publication 598

Tax on Unrelated Business Income of ExemptOrganizations.

Publication 910

Guide to Free Tax Services.

Publication 1391

Deductibility of Payments Made to CharitiesConducting Fund-Raising Events.

Publication 1771

Charitable ContributionsSubstantiation andDisclosure Requirements.

E. Use of Form 990 To SatisfyState Reporting RequirementsSome states and local government units willaccept a copy of Form 990 and Schedule A(Form 990) in place of all or part of their ownfinancial report forms. The substitutionapplies primarily to section 501(c)(3)organizations, but some of the other types ofsection 501(c) organizations are also affected.

If you use Form 990 to satisfy state or localfiling requirements, such as those under statecharitable solicitation acts, note the following:

Determine state filing requirements

You should consult the appropriate officials ofall states and other jurisdictions in which the

organization does business to determine theirspecific filing requirements. Doing businessin a jurisdiction may include any of thefollowing: (a) soliciting contributions or grantsby mail or otherwise from individuals,businesses, or other charitable organizations;(b) conducting programs; (c) havingemployees within that jurisdiction;(d) maintaining a checking account; or(e) owning or renting property there.

Monetary tests may differ

Some or all of the dollar limitations applicableto Form 990 when filed with the IRS may notapply when using Form 990 in place of stateor local report forms. Examples of the IRSdollar limitations that do not meet some state

requirements are the $25,000 gross receiptsminimum that creates an obligation to filewith the IRS (see the gross receiptsdiscussion in General Instruction C) and the$50,000 minimum for listing professional feesin Part II of Schedule A (Form 990).

Additional information may be required

State or local filing requirements may requireyou to attach to Form 990 one or more of thefollowing: (a) additional financial statements,such as a complete analysis of functionalexpenses or a statement of changes in netassets; (b) notes to financial statements; (c)additional financial schedules; (d) a report on

the financial statements by an independentaccountant; and (e) answers to additionalquestions and other information. Each

jurisdiction may require the additional materialto be presented on forms they provide. Theadditional information does not have to besubmitted with the Form 990 filed with theIRS.

Even if the Form 990 the organization fileswith the IRS is accepted by the IRS ascomplete, a copy of the same return filed witha state will not fully satisfy that states filingrequirement if required information is notprovided, including any of the additionalinformation discussed above, or if the statedetermines that the form was not completedby following the applicable Form 990instructions or supplemental stateinstructions. If so, the organization may beasked to provide the missing information or tosubmit an amended return.

Use of audit guides may be required

To ensure that all organizations report similartransactions uniformly, many states requirethat contributions, gifts, grants, etc., on lines1a through 1d in Part I and functionalexpenses on lines 13, 14, and 15, and inPart II, be reported according to the AICPAindustry audit guide, Audits of VoluntaryHealth and Welfare Organizations(New York,

NY, AICPA, 1988), as supplemented byStandards of Accounting and FinancialReporting for Voluntary Health and WelfareOrganizations(Washington, DC, NationalHealth Council, Inc., 1988, 3rd edition), andby Accounting and Financial ReportingAGuide for United Ways and Not-for-ProfitHuman Service Organizations(Alexandria, VA,United Way Institute, 1989).

Donated services and facilities

Even though reporting donated services andfacilities as items of revenue and expense iscalled for in certain circumstances by thethree publications named above, many statesand the IRS do not permit the inclusion ofthose amounts in Parts I and II of Form 990.The instructions for line 82 discuss theoptional reporting of donated services andfacilities in Parts III and VI.

Amended returns

If the organization submits supplementalinformation or files an amended Form 990with the IRS, it must also send a copy of theinformation or amended return to any statewith which it filed a copy of Form 990originally to meet that states filingrequirement.

If a state requires the organization to file anamended Form 990 to correct conflicts withForm 990 instructions, it must also file anamended return with the IRS.

Method of accounting

Most states require that all amounts bereported based on the accrual method ofaccounting. (See also Specific Instructions,item J.)

Time for filing may differ

The deadline for filing Form 990 with the IRSdiffers from the time for filing reports withsome states.

Public inspection

The Form 990 information made available forpublic inspection by the IRS may differ from

that made available by the states. See theCaution in the instructions for line 1d.

State registration number

Enter the applicable state or local jurisdictionregistration or identification number in item E(in the heading of the return) for each

jurisdiction in which the organization filesForm 990 in place of the state or local form. Iffiling in several jurisdictions, prepare as manycopies as needed with item E blank. Thenenter the applicable registration number onthe copy to be filed with each jurisdiction.

An organization need not put any state orlocal jurisdiction registration or identificationnumber on the Form 990 filed with the IRS.

F. Other Forms as PartialSubstitutes for Form 990Except as provided below, the InternalRevenue Service will not accept any form asa substitute for one or more parts of Form990.

Labor organizations (section 501(c)(5))

A labor organization that files Form LM-2,Labor Organization Annual Report, or theshorter Form LM-3, Labor OrganizationAnnual Report, with the U.S. Department ofLabor (DOL) can attach a copy of the

completed DOL form to Form 990 to providesome of the information required by Form990. This substitution is not permitted if theorganization files a DOL report thatconsolidates its financial statements withthose of one or more separate subsidiaryorganizations.

Employee benefit plans (section 501(c)(9),(17), or (18))

An employee benefit plan may be able tosubstitute Form 5500 or Form 5500-C/R forpart of Form 990. The substitution can bemade if the organization filing Form 990 andthe plan filing Form 5500 or 5500-C/R meetall the following tests:

1. The Form 990 filer is organized undersection 501(c)(9), (17), or (18);

2. The Form 990 filer and Form 5500 filerare identical for financial reporting purposesand have identical receipts, disbursements,assets, liabilities, and equity accounts;

3. The employee benefit plan does notinclude more than one section 501(c)organization, and the section 501(c)organization is not a part of more than oneemployee benefit plan; and

4. The organizations accounting year andthe employee plan year are the same. If theyare not, you may want to change theorganizations accounting year, as explainedin General Instruction G, so it will coincidewith the plan year.

Allowable substitution areas

Whether an organization files Form 990 for alabor organization or for an employee benefitplan, the areas of Form 990 for which otherforms can be substituted are the same. Theseareas are:

Lines 13 through 15 of Part I (but completelines 16 through 21);

Part II; and

Part IV (but complete lines 59, 66, and 74,columns (A) and (B)).

If an organization substitutes Form LM-2 orLM-3 for any of the Form 990 Parts or lineitems mentioned above, it must attach a


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reconciliation sheet to show the relationshipbetween the amounts on the DOL forms andthe amounts on Form 990. This is particularlytrue of the relationship of disbursementsshown on the DOL forms and the totalexpenses on line 17, Part I, of Form 990. Theorganization must make this reconciliationbecause the cash disbursements section ofthe DOL forms includes nonexpense items. Ifthe organization substitutes Form LM-2, besure to complete its separate schedule ofexpenses.

G. Accounting Period Covered

Use the 1995 Form 990 to report on the 1995calendar year accounting period. A calendaryear accounting period begins on January 1and ends on December 31.

If the organization has established a fiscalyear accounting period, use the 1995 Form990 to report on the organizations fiscal yearthat began in 1995 and ended 12 monthslater. A fiscal year accounting period shouldnormally coincide with the natural operatingcycle of the organization. Be certain toindicate in the heading of Form 990 (item A)the date the organizations fiscal year beganin 1995 and the date the fiscal year ended in1996.

When affiliated organizations authorize theircentral organization to file a group return forthem, the accounting period of the affiliatedorganizations and the central organizationmust be the same. See General Instruction Q.

Use the 1995 Form 990 to report on a shortaccounting period (less than 12 months) thatbegan in 1995 and ended November 30,1996, or earlier.

If the organization changes its accountingperiod, it must file a return on Form 990 forthe short period resulting from the change.Write Change of Accounting Period at thetop of this short-period return.

If the organization changed its accountingperiod within the 10-calendar-year period thatincludes the beginning of the short period,and it had a Form 990 filing requirement at

any time during that 10-year period, it mustalso attach a Form 1128 to the short-periodreturn. See Rev. Proc. 85-58, 1985-2C.B. 740.

H. When and Where To FileFile Form 990 by the 15th day of the 5thmonth after the organizations accountingperiod ends. If the regular due date falls on aSaturday, Sunday, or legal holiday, file on thenext business day. A business day is any daythat is not a Saturday, Sunday, or legalholiday.

If the organization is liquidated, dissolved,or terminated, file the return by the 15th dayof the 5th month after the liquidation,dissolution, or termination.

If the return is not filed by the due date(including any extension granted), attach astatement giving the reasons for not filing ontime.

If the principal officeis located in:

Send the return tothe Internal Revenue

Service Centerbelow:

Alabama, Arkansas, Florida,Georgia, Louisiana,Mississippi, North Carolina,South Carolina, Tennessee

Atlanta, GA39901-0027

Arizona, Colorado, Kansas,New Mexico, Oklahoma,Texas, Utah, Wyoming

Austin, TX73301-0027

Indiana, Kentucky, Michigan,Ohio, West Virginia

Cincinnati, OH45999-0027

Alaska, California, Hawaii,Idaho, Nevada, Oregon,Washington

Fresno, CA93888-0027

Connecticut, Maine,Massachusetts, NewHampshire, New York, RhodeIsland, Vermont

Holtsville, NY00501-0027

Illinois, Iowa, Minnesota,Missouri, Montana, Nebraska,North Dakota, South Dakota,Wisconsin

Kansas City, MO64999-0027

Delaware, Maryland, NewJersey, Pennsylvania, Virginia,District of Columbia, any U.S.possession, or foreign country

Philadelphia, PA19255-0027

I. Extension of Time To FileUse Form 2758 to request an extension oftime to file Form 990. Generally, the IRS willnot grant an extension of time for more than90 days unless sufficient need for anextended period is clearly shown. In no eventwill an extension of more than 6 months begranted to any domestic organization.

J. Amended Return/FinalReturnTo change the organizations return for anyyear, file a new return including any requiredattachments. Use the revision of Form 990applicable to the year being amended. Theamended return must provide all theinformation called for by the form and

instructions, not just the new or correctedinformation. Check the Amended Returnbox in the heading of the return (item B), or, ifthe version of the form being used does nothave such a box, write Amended Return atthe top of the return.

The organization may file an amendedreturn at any time to change or add to theinformation reported on a previously filedreturn for the same period. It must make theamended return available for public inspectionfor 3 years from the date of filing or 3 yearsfrom the date the original return was due,whichever is later.

The organization must also send a copy ofthe information or amended return to anystate with which it filed a copy of Form 990

originally to meet that states filingrequirement.

Use Form 4506-A to obtain a copy of apreviously filed return. You can obtain blankforms for prior years by calling1-800-TAX-FORM (1-800-829-3676).

If the return is a final return, see thespecific instructions for line 79, Part VI, OtherInformation.

K. Penalties

Against the Organization

Under section 6652(c), a penalty of $10 aday, not to exceed the smaller of $5,000 or5% of the gross receipts of the organizationfor the year, may be charged when a return isfiled late, unless the organization can showthat the late filing was due to reasonablecause. The penalty begins on the due datefor filing the Form 990. The penalty may alsobe charged if the organization files anincomplete return or furnishes incorrectinformation. To avoid having to supplymissing information later, be sure to completeall applicable line items; answer Yes, No,or N/A (not applicable) to each question onthe return; make an entry (including a zerowhen appropriate) on all total lines; and enterNone or N/A if an entire part does notapply.

Against Responsible Person(s)

If the organization does not file a completereturn or does not furnish correct information,the IRS will send the organization a letter thatincludes a fixed time to fulfill theserequirements. After that period expires, theperson failing to comply will be charged apenalty of $10 a day, not to exceed $5,000,unless he or she shows that not complying

was due to reasonable cause. If more thanone person is responsible, they are jointly andindividually liable for the penalty.

There are also penaltiesfines andimprisonmentfor willfully not filing returnsand for filing fraudulent returns andstatements with the IRS (sections 7203, 7206,and 7207). There are also penalties for failureto comply with public disclosure requirementsas discussed in General Instruction L. Statesmay impose additional penalties for failure tomeet their separate filing requirements.

L. Public Inspection ofCompleted ExemptOrganization Returns and

Approved ExemptionApplications

Through the IRS

Forms 990, 990-EZ, and certain othercompleted exempt organization returns areavailable for public inspection and copyingupon request. Approved applications forexemption from Federal income tax are alsoavailable. However, the IRS may not discloseportions of an application relating to anytrade secrets, etc., nor can the IRS disclosethe schedule of contributors required as anattachment for line 1 of Forms 990 and990-EZ (section 6104).

A request for inspection must be in writingand must include the name and address (city

and state) of the organization that filed thereturn or application. A request to inspect areturn should indicate the type (number) ofthe return and the year(s) involved. Therequest should be sent to the District Director(Attention: Disclosure Officer) of the district inwhich the requester desires to inspect thereturn or application. If inspection at the IRSNational Office is desired, the request shouldbe sent to the Commissioner of InternalRevenue, Attention: Freedom of InformationReading Room, 1111 Constitution Avenue,NW, Washington, DC 20224.


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Use Form 4506-A to request a copy or toinspect an exempt organization returnthrough the IRS. There is a fee forphotocopying.

Through the Organization

Annual return

An organization must, during the 3-yearperiod beginning with the due date (includingextensions, if any), of the Form 990 (or Form990-EZ), make its return available for publicinspection upon request. All parts of thereturn and all required schedules and

attachments, other than the schedule ofcontributors to the organization, must bemade available. Inspection must be permittedduring regular business hours at theorganizations principal office and at each ofits regional or district offices having three ormore employees.

This provision applies to any organizationthat files Form 990 (or Form 990-EZ),regardless of the size of the organization andwhether or not it has any paid employees.

If an organization furnishes additionalinformation to the IRS to be made part of itsreturn, as a result of an examination orcorrespondence from the service centerprocessing the return, it must also make thatinformation part of the return it provides for

public inspection.If the organization does not maintain a

permanent office, it must provide areasonable location for a requester to inspectthe organizations annual returns. Theorganization may mail the information to arequester. However, the organization cancharge for copying and postage only if therequester gives up the right to a freeinspection (Notice 88-120, 1988-2 C.B. 454).

Any person who does not comply with thepublic inspection requirement will beassessed a penalty of $10 for each day thatinspection was not permitted, up to amaximum of $5,000 for each return. Nopenalty will be imposed if the failure is due toreasonable cause. Any person who willfully

fails to comply will be subject to an additionalpenalty of $1,000 (sections 6652(c) and6685).

Exemption application

Any section 501(c) organization thatsubmitted an application for recognition ofexemption to the Internal Revenue Serviceafter July 15, 1987, must make available forpublic inspection a copy of its application(together with a copy of any paperssubmitted in support of its application) andany letter or other document issued by theInternal Revenue Service in response to theapplication. An organization that submitted itsexemption application on or before July 15,1987, must also comply with this requirementif it had a copy of its application on July 15,1987. As in the case of annual returns, thecopy of the application and relateddocuments must be made available forinspection during regular business hours atthe organizations principal office and at eachof its regional or district offices having atleast three employees.

If the organization does not have apermanent office, it must provide areasonable location for the inspection of bothits annual returns and exemption application.The information may be mailed. See thereference to Notice 88-120 above underAnnual return. The organization need not

disclose any portion of an application relatingto trade secrets, etc., that would not also bedisclosable by the IRS.

The penalties for failure to comply with thisprovision are the same as those underAnnual return above, except that the $5,000limitation does not apply.

M. Solicitations ofNondeductible ContributionsAny fundraising solicitation by or on behalf ofany section 501(c) organization that is noteligible to receive contributions deductible as

charitable contributions for Federal incometax purposes must include an explicitstatement that contributions or gifts to it arenot deductible as charitable contributions.The statement must be in an easilyrecognizable format whether the solicitation ismade in written or printed form, by televisionor radio, or by telephone. This provisionapplies only to those organizations whoseannual gross receipts are normally more than$100,000 (section 6113).

Failure to disclose that contributions arenot deductible could result in a penalty of$1,000 for each day on which a failureoccurs. The maximum penalty for failures byany organization, during any calendar year,shall not exceed $10,000. In cases where the

failure to make the disclosure is due tointentional disregard of the law, the $10,000limitation does not apply and more severepenalties apply. No penalty will be imposed ifthe failure is due to reasonable cause.

N. Disclosures RegardingCertain Information andServices FurnishedA section 501(c) organization that offers tosell or solicits money for specific informationor a routine service for any individual thatcould be obtained by such individual from aFederal government agency free or for anominal charge must disclose that factconspicuously when making such offer orsolicitation. Any organization that intentionally

disregards this requirement will be subject toa penalty for each day on which the offers orsolicitations are made. The penalty imposedfor a particular day is the greater of $1,000 or50% of the total cost of the offers andsolicitations made on that day which lackedthe required disclosure.

O. Disclosures RegardingCertain Transactions andRelationshipsIn their annual returns on Schedule A (Form990), section 501(c)(3) organizations mustdisclose information regarding their direct orindirect transfers to, and other direct orindirect relationships with, other section

501(c) organizations (except other section501(c)(3) organizations) or section 527political organizations. This provision helpsprevent the diversion or expenditure of asection 501(c)(3) organizations funds forpurposes not intended by section 501(c)(3).All section 501(c)(3) organizations mustmaintain records regarding all such transfers,transactions, and relationships. See alsoGeneral Instruction K regarding penalties.

P. Erroneous BackupWithholdingRecipients of dividend or interest paymentsgenerally must certify their correct taxpayeridentification number to the bank or otherpayer on Form W-9, Request for TaxpayerIdentification Number and Certification. If thepayer does not get this information, it mustwithhold part of the payments as backupwithholding. If the organization was subjectto erroneous backup withholding because thepayer did not realize it was an exemptorganization and not subject to this

withholding, it can claim credit on Form 990-Tfor the amount withheld. See the Instructionsfor Form 990-T. Claims for refund must befiled within 3 years after the date the originalreturn was due; 3 years after the date theorganization filed it; or 2 years after the datethe tax was paid, whichever is later.

Q. Group ReturnA central, parent, or like organization canfile a group return on Form 990 for two ormore local organizations that are:

1. Affiliated with the central organization atthe time its annual accounting period ends,

2. Subject to the central organizationsgeneral supervision or control,

3. Exempt from tax under a groupexemption letter that is still in effect, and

4. Have the same accounting period as thecentral organization.

If the parent organization is required to filea return for itself, it must file a separate returnand may not be included in the group return.See General Instruction C for a list oforganizations not required to file.

Every year, each local organization mustauthorize the central organization in writing toinclude it in the group return and mustdeclare, under penalty of perjury, that theauthorization and the information it submits tobe included in the group return are true andcomplete.

If the central organization prepares a groupreturn for its affiliated organizations, checkthe Yes box in item H(a), in the heading ofForm 990, and indicate the number oforganizations for which the group return isfiled in item H(b). Attach either (1) a scheduleshowing the name, address, and employeridentification number (EIN) of each affiliatedorganization included, or (2) a statementindicating that the group return includes allaffiliated organizations covered by the groupruling. In item I, indicate the group exemptionnumber (GEN). When preparing the return, besure not to confuse the four-digit groupexemption number (GEN) in item I with thenine-digit employer identification number initem D of the forms heading.

An affiliated organization covered by agroup ruling may file a separate return insteadof being included in the group return. In suchcase, check the Yes box in item H(c), in theheading of Form 990, and enter the groupexemption number in item I.

Parts IV-A and IV-B do not have to becompleted on group returns.

R. Organizations in ForeignCountries and U.S.PossessionsRefer to General Instruction C for filingexemption for foreign organizations with


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$25,000 or less in gross receipts from U.S.sources.

Report amounts in U.S. dollars and statewhat conversion rate you use. Combineamounts from within and outside the UnitedStates and report the total for each item. Allinformation must be written in English.

S. Substantiation, Disclosure,and Lobbying Rules1. Substantiation requirements for certaincontributions.A donor that makes acharitable contribution of $250 or more will

not be allowed a Federal income taxdeduction under section 170 unless the donorobtains, contemporaneously with giving thecharitable contribution, a writtenacknowledgment (receipt) from the doneeorganization (section 170(f)(8)). Taxpayers(donors) may not rely solely on a cancelledcheck as substantiation for a donation of$250 or more to a donee organization. Anacknowledgment is considered to becontemporaneous with a donorscontribution if it is obtained by the earlier ofthe date on which the donor files a tax returnfor the tax year in which the contribution wasmade or the due date, including extensions,for filing that return.

The acknowledgment the donee gives to

the donor does not have to be in anyparticular form but it must show (a) theamount of cash contributed and (b) adescription (but not value) of any propertycontributed, other than cash. Further, theacknowledgment must (c) describe and showthe value, estimated in good faith by thedonee, of any goods or services the doneegave in return for the contribution. A falsesubstantiation acknowledgment may subjectthe donee organization to section 6701penalties for aiding and abetting anunderstatement of tax liability.

If the donor did not receive any goods orservices from the donee organization in returnfor its contribution, the donees writtenacknowledgment must state that fact. If the

donor received only goods and services ofinsubstantial value in return for itscontribution, the donees writtenacknowledgment need not state a value forsuch good and services. See Rev. Procs.90-12, 1990-1 C.B. 471, and 94-72, 1994-2C.B. 811 (and any successor documents),and Line 1In General instructions for adiscussion of benefits of nominal value.

If the donee organization provided goods orservices consisting solely of intangiblereligious benefits, the donee must make astatement to that effect instead of providingan estimated valuation. An intangiblereligious benefit must be (a) provided by anorganization organized exclusively forreligious purposes and (b) not generally soldin a commercial transaction.

The donee organization may either provideseparate statements for each contribution of$250 or more from a donor, or furnishperiodic statements substantiatingcontributions of $250 or more.

Separate payments are regarded asindependent contributions and are notaggregated for purposes of measuring the$250 threshold. If donations are madethrough payroll deductions, the deductionfrom each paycheck is regarded as aseparate payment.

If the donation is made by means ofwithholding from a taxpayers wages and

payment by the taxpayers employer to adonee organization, it may be substantiatedby both

1. A pay stub, Form W-2, or otherdocument furnished by the employer that setsforth the amount withheld by the employer forthe purpose of payment to a doneeorganization; and

2. A pledge card or other documentprepared by or at the direction of the doneeorganization that includes a statement to theeffect that the organization does not providegoods or services in whole or partial

consideration for any contributions made tothe organization by payroll deduction.

An organization described in section 170(c),or an organization that is a PrincipalCombined Fund Organization for purposes ofthe Combined Federal Campaign and actingin that capacity, that receives a paymentmade as a contribution is treated as thedonee organization for purposes of section170(f)(8), even if the organization distributesthe amount received to one or moreorganizations described in section 170(c).

See also Publication 1771 and Regulationssection 1.170A-13 that discuss the provisionsof the law.

It is the responsibility of the donor toobtain, and keep as part of its records, a

written acknowledgment substantiating itscontribution. However, future regulations willprovide guidance to organizations on howthey can provide substantiation informationdirectly to the IRS. If the donee organizationsdo so, donors will not have to substantiatetheir contributions separately.

Donors must continue to file Form 8283,Noncash Charitable Contributions, if theirdeduction for all noncash gifts is more than$500.

2. Disclosure requirements for quid proquo contributions.If a charitableorganization solicits or receives a contributionof more than $75 for which the organizationgives the donor something in return (a quidpro quo contribution) the organization must

inform the donor, by written statement, thatthe amount of the contribution deductible forFederal income tax purposes is limited to theexcess over the value of the goods orservices received by the donor.

The written statement must also providethe donor with a good-faith estimate of goodsor services given in return for thecontribution. A written statement is notrequired if an organization gave the donorgoods or services of insubstantial value. (Seethe line 1 In General instructions thatdiscuss benefits of nominal value.)

A quid pro quo contribution is a paymentthat is given both as a contribution and as apayment for goods or services provided bythe donee organization. A quid pro quo

contribution does not include any payment toan organization, organized exclusively forreligious purposes, solely for intangiblereligious benefits not generally sold in acommercial transaction (section 6115).

An organization that fails to make therequired disclosure for each quid pro quocontribution will incur a penalty of $10 foreach such failure, not to exceed $5,000 for aparticular fundraising event or mailing, unlessit can show reasonable cause for notproviding such disclosure (section 6714).

3. Special rules relating to lobbying andpolitical activities.Certain organizations

exempt under sections 501(c)(4), (5), and (6),must report their total lobbying, politicalexpenses, and membership dues, or similaramounts, on their Form 990. At the time ofassessment or payment of these dues, etc.,these organizations generally must give theirmembers a written estimate showing theallocation of membership dues, etc., to theorganizations lobbying and politicalexpenses.

The term dues means the amount theorganization requires a member to pay inorder to be recognized by the organization asa member. Payments that are similar to duesinclude members voluntary payments,assessments made by the organization tocover basic operating costs, and specialassessments imposed by the organization toconduct lobbying and political activities. If theamount of lobbying and political expensesexceed the amount of dues, etc., for the year,the full amount of dues, etc., is consideredallocable to the lobbying and politicalexpenses. Any excess lobbying and politicalexpenses are carried forward to the next taxyear.

Members of an organization cannot takeeither a section 170 charitable deduction or asection 162 business expense deduction forthe portion of their dues payment, etc., that isshown on the written estimate given to them

as being allocable to the organizationslobbying and political expenses. See theinstructions for allocating costs to lobbyingactivities and influencing legislation in item 4on the following page.

Disclosing the portion of dues, etc.,allocable to lobbying and political expenses isnot required for an organization that (a) incursonly de minimis amounts of in-house lobbyingexpenses (not more than $2,000) and noother nondeductible lobbying or politicalexpenses (such as political campaign orgrassroots lobbying expenses); or (b) elects,instead of giving its members a written noticeof allocation of lobbying and politicalexpenses, to pay a proxy tax on thoselobbying and political expenses incurred

during the tax year; or (c) establishes thatsubstantially all of its dues or similar amountsare not deductible by the persons payingthem in computing their taxable income.

If the organization elects not to give itsmembers an estimate of anticipatednondeductible lobbying and political expensesallocable to dues, etc., then the organizationis subject to a proxy tax on its actuallobbying and political expenses allocable todues for that year. The proxy tax is equal tothe amount subject to the tax, multiplied bythe highest corporate rate in effect for the taxyear. The tax is reported on Form 990-T.

If the organizations actual nondeductiblelobbying and political expenses allocable todues for the year exceed its estimate of the

allocable amount of such expenses in timelynotices of dues disallowance to members, theorganization must pay a proxy tax on theexcess. The IRS may permit a waiver of thistax if the organization made a reasonableestimate and agrees to adjust its notice oflobbying and political expenses to membersin the following year.

If an organization elects to pay the proxytax rather than to provide its members withan estimate of dues allocable to lobbying andpolitical expenses, all of the members duesremain eligible for deduction to the extentotherwise deductible. See sections 162(e) and6033(e).


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As stated above, section 501(c)(3)organizations are not subject to the lobbyingand political expense disclosurerequirements. However, a contributor to acharity that engages in lobbying and politicalactivities cannot take a section 170 or 162deduction for a contribution if (a) the charityslobbying and political activities are on mattersof direct financial interest to the contributorstrade or business and (b) a principal purposeof the contribution is to avoid the generaldisallowance rule that would apply if thecontributor conducted such lobbying andpolitical activities directly (section 170(f)(9)).

For more details, see Rev. Proc. 95-35,1995-32 I.R.B. 51, as amended by Rev. Proc.95-35A, 1995-40 I.R.B. 38.

4. Allocation of costs to lobbying activitiesand influencing legislation.The rulesbelow, contained in Regulations sections1.162-28 and 1.162-29 are effective foramounts paid or incurred on or after July 21,1995. Organizations must adopt a reasonableinterpretation of sections 162(e)(1)(A) and (D)for amounts paid or incurred before this date.

An organization subject to the lobbyingdisclosure rules of section 6033(e) must use areasonable allocation method to determinewhat portion of its total costs were made fortwo types of nondeductible lobbyingactivitiesinfluencing legislation andinfluencing the actions of a covered executivebranch official through direct communication(sections 162(e)(1)(A) and (D)). Allocation ofcosts to these types of lobbying activities isnot applicable to expenditures for de minimisin-house lobbying or for grassroots lobbyingand political activities. These allocation rulesdo not apply to section 501(c)(3)organizations.

Reasonable methods of allocating costs tolobbying activities include, but are not limitedto: (a) the ratio method, (b) the gross-up andalternative gross-up methods, and (c) amethod applying the principles of section263A. A method is not reasonable unless it isapplied consistently, allocates a properamount of costs to lobbying activities, and is

consistent with certain special rules ofRegulations sections 1.162-28 and 1.162-29.Tax-exempt organizations can use the ratiomethod and gross-up method even if some oftheir activities are conducted by volunteers.Labor hours and costs of personnel whoseactivities involve significant judgment withrespect to lobbying activities (lobbyingpersonnel) are included in all methods. Laborhours and costs of clerical or supportpersonnel (personnel other than lobbyingpersonnel) are disregarded under thealternative gross-up method and may bedisregarded under the ratio method.Third-party costs are those paid to outsideparties for conducting lobbying activities,dues paid another membership organization

that were declared to be nondeductiblelobbying expenses, and travel andentertainment costs for lobbying activities.

Special rules and definitions.(If less than5% of a persons time is spent on lobbyingactivities, an organization may treat thatpersons time spent on lobbying activities aszerobut not if there is direct contactlobbying (de minimis rule).) An organizationmust treat all hours spent by a person on, orin connection with, direct contact lobbying aslabor hours allocable to lobbying activities.

An activity is direct contact lobbying if itis a meeting, telephone conversation, letter,or similar means of communication with a

legislator (other than a local legislator) orcovered executive branch official andotherwise qualifies as a lobbying activity. Aperson who engages in research, preparation,and other background activities related todirect contact lobbying, but who does notmake direct contact with a legislator orcovered executive branch official, is notengaged in direct contact lobbying.

Influencing legislation means (a) anyattempt to influence legislation through alobbying communication; and (b) all activities,such as research, preparation, planning, andcoordination, including deciding whether tomake a lobbying communication, engaged infor a purpose of making or supporting alobbying communication, even if not yetmade.

A lobbying communication is anycommunication with any member oremployee of a legislative body, or any othergovernment official or employee who mayparticipate in the formulation of the legislationthat (a) refers to specific legislation andreflects a view on that legislation; or (b)clarifies, amplifies, modifies, or providessupport for views reflected in a prior lobbyingcommunication.

Legislation includes any action withrespect to Acts, bills, resolutions, or othersimilar items by a legislative body. Specificlegislation includes a specific legislativeproposal that has not been introduced in alegislative body.

Legislative bodies are Congress, statelegislatures, and other similar governingbodies, excluding local councils (and similargoverning bodies), and executive, judicial, oradministrative bodies.

Purpose for engaging in an activity isbased on all the facts and circumstances. Ifan organizations lobbying communicationwas for a lobbying and a nonlobbyingpurpose, the organization must make areasonable allocation of costs to influencinglegislation.

If in a prior year, an organization treated

costs incurred for a future lobbyingcommunication as a lobbying cost toinfluence legislation, but after the organizationfiled a timely return it appears the lobbyingcommunication will not be made under anyforeseeable circumstance, the organizationmay apply these costs to reduce its currentyears lobbying costs, but not below zero.The organization may carry forward anyamount of the costs not used to reduce itscurrent years lobbying costs to subsequentyears.

Example. Ratio method.X Organizationsthree employees spent 3,000 hours inlobbying activities. The organizations totallabor hours for all activities were 6,000. Theorganization had no third-party lobbying

costs. Its total operational costs, excludingany third-party costs, were $300,000. XOrganization allocated its lobbying costs asfollows:

Lobbyinglabor hrs.

3,000 $300,000 + 0 = $150,0006,000

Total Total costs Allocable Costs allocablelabor hrs. of operat ions third-party to lobbying

costs activities

Examples. Gross-up method andAlternative gross-up method.A and B areemployees of Y Organization. As activities

involve significant judgment with respect tolobbying activities. B performs clerical andsupport activities for A. As basic lobbyinglabor costs (excluding employee benefits) are$50,000 and Bs labor costs (excludingemployee benefits) in support of As activitiesare $15,000. Allocable third-party costs are$100,000. Using the gross-up method toallocate its lobbying costs, Y Organizationmultiplies 175% times its basic labor costs(excluding employee benefits) for all of thelobbying of its personnel and adds itsthird-party lobbying costs as follows:

175% $65,000 + $100,000 = $213,750

Basic lobbying labor Allocable third- Costs allocablecosts of A + B party costs to lobbying

activities

If Y Organization uses the alternativegross-up method to allocate its lobbyingcosts, Y multiplies 225% times its basic laborcosts (excluding employee benefits) for all ofthe lobbying hours of its lobbying personneland adds its third-party lobbying costs asfollows:

225% $50,000 + $100,000 = $212,500

Basic lobbying labor Allocable third- Costs allocablecosts of A party costs to lobbying

activities

The examples that demonstrate the section263A cost allocation method are found inRegulations section 1.162-28(f). For thispurpose, lobbying activities are considered aservice department or function.

Specific InstructionsCompleting the Heading of Form 990

The instructions that follow are keyed toitems in the heading for Form 990.

Item AAccounting period

Use the 1995 Form 990 to report on acalendar year accounting period beginningJanuary 1, 1995, and ending December 31,1995.

Also, use the 1995 Form 990 to report onan accounting period other than a calendaryear (either a fiscal year that began in 1995 ora short period (less than 12 months) thatbegan in 1995). You must show the monthand day in 1995 that your fiscal year beganor the short period began. You must alsoshow the day, month, and year your fiscalyear or short period ended. See GeneralInstruction G.

Item BCheckboxes:

Change of address.If the organizationchanged its address since it filed its previousreturn, check this box.

Initial return.If this is the organizationsinitial return, check this box.

Final return.If this is a final return, checkthis box. See also the instructions for line 79,Part VI, Other Information.

Amended return.If this is an amendedreturn, check this box. See GeneralInstruction J for more details on amending areturn.

Item CName and address

If we mailed the organization a Form 990Package with a preaddressed mailing label,please attach the label in the name andaddress space on the return. Using the labelhelps us avoid errors in processing the return.


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If any information on the label is wrong, drawa line through that part and correct it.

Include the suite, room, or other unitnumber after the street address. If the PostOffice does not deliver mail to the streetaddress and the organization has a P.O. box,show the box number instead of the streetaddress.

Item DEmployer identification number

The organization should have only oneFederal employer identification number. If ithas more than one and has not been advisedwhich to use, notify the service center for theorganizations area (from the list in GeneralInstruction H). State what numbers theorganization has, the name and address towhich each number was assigned, and theaddress of its principal office. The IRS willadvise the organization which number to use.

Section 501(c)(9) voluntary employeesbeneficiary associations must use their ownemployer identification number and not thenumber of their sponsor.

Item EState registration number

See General Instruction E.

Item FApplication pending

If the organizations application for exemptionis pending, check this box and complete thereturn.

Item GType of organization

If the organization is exempt under section501(c), check the applicable box and insert,within the parentheses, the number thatidentifies the type of section 501(c)organization the filer is. See the chart inGeneral Instruction B. If the organization is asection 4947(a)(1) nonexempt charitable t rust,check the applicable box and note thediscussion regarding Schedule A (Form 990)and Form 1041 in General Instruction D andthe instructions to line 92 of Form 990.

Item HGroup return, etc.

See General Instruction Q.

Item IGroup exemption number

Enter the four-digit group exemption number(GEN) if you checked a Yes box in item H.Contact the central/parent organization if youare unsure of the GEN assigned.

Item JAccounting method

Indicate the method of accounting used inpreparing this return. Unless instructedotherwise, the organization should generallyuse the same accounting method on thereturn to figure revenue and expenses that itregularly uses to keep its books and records.To be acceptable for Form 990 reportingpurposes, however, the method of accountingused must clearly reflect income.

Any not-for-profit organization described insection 501(c) that changes its method ofaccounting to comply with SFAS 116 and 117does not need to file Form 3115, Applicationfor Change in Accounting Method, unless thechange affects taxable income.

If the organization prepares Form 990 forstate reporting purposes, it may file anidentical return with the IRS even though thereturn does not agree with the books ofaccount, unless the way one or more itemsare reported on the state return conflicts withthe instructions for preparing Form 990 forfiling with the IRS.

Example 1. The organization maintains itsbooks on the cash receipts anddisbursements method of accounting butprepares a state return based on the accrualmethod. It could use that return for reportingto the IRS.

Example 2. A state reporting requirementrequires the organization to report certainrevenue, expense, or balance sheet itemsdifferently from the way it normally accountsfor them on its books. A Form 990 preparedfor that state is acceptable for the IRSreporting purposes if the state reportingrequirement does not conflict with the Form990 instructions.

An organization should keep areconciliation of any differences between itsbooks of account and the Form 990 that isfiled.

Most states that accept Form 990 in placeof their own forms require that all amounts bereported based on the accrual method ofaccounting. See General Instruction E.

Item KGross receipts of $25,000 or less

Check this box if the organizations grossreceipts are normally not more than $25,000.However, see General Instruction A, if youreceived a Form 990 Package, and note thediscussion on gross receipts in GeneralInstruction C.

Public Inspection

All information the organization reports on orwith its Form 990, including attachments, willbe available for public inspection, except theschedule of contributors required for line 1d,Part I. Please make sure the forms andattachments are clear enough to photocopylegibly.

Signature

To make the return complete, an officer ofthe organization authorized to sign it mustsign in the space provided. (For acorporation, or association, this officer maybe the president, vice president, treasurer,assistant treasurer, chief accounting officer,or other corporate, or association officer,such as a tax officer. A receiver, trustee, orassignee must sign any return he or she filesfor a corporation or association. For a trust,the authorized trustee(s) must sign.)

Generally, anyone who is paid to preparethe return must sign it in the Paid PreparersUse Only area.

The paid preparer must:

Sign the return, by hand, in the spaceprovided for the preparers signature(signature stamps and labels are notacceptable).

Enter the preparers social security numberor employer identification number only if theForm 990 is for a section 4947(a)(1)

nonexempt charitable trust that is not filingForm 1041.

Complete the required preparer information.

Give a copy of the return to theorganization.

Leave the paid preparers space blank ifthe return was prepared by a regularemployee of the filing organization.

Recordkeeping

The organizations records should be kept foras long as they may be needed for theadministration of any provision of the InternalRevenue Code. Usually, records that support

an item of income, deduction, or credit mustbe kept for 3 years from the date the return isdue or filed, whichever is later. Keep recordsthat verify the organizations basis in propertyfor as long as they are needed to figure thebasis of the original or replacement property.

The organization should also keep copiesof any returns it has filed. They help inpreparing future returns and in makingcomputations when filing an amended return.

Rounding Off to Whole Dollars

You may show money items as whole-dollaramounts. Drop any amount less than 50cents and increase any amount from 50through 99 cents to the next higher dollar.

Completing All Lines

Unless the organization is permitted to usecertain DOL forms or Form 5500 seriesreturns as partial substitutes for Form 990(see General Instruction F), do not leave anyapplicable lines blank or attach any otherforms or schedules instead of entering therequired information on the appropriate lineon Form 990.

Assembling Form 990

Before filing the Form 990, assemble thepackage of forms and attachments in thefollowing order:

Form 990

Schedule A (Form 990). (The requirement toattach Schedule A (Form 990) applies to ALLsection 501(c)(3) organizations and ALLsection 4947(a)(1) nonexempt charitable t ruststhat file Form 990.)

Attachments to Form 990

Attachments to Schedule A (Form 990)

Attachments

Use the schedules on the official form unlessyou need more space. If you useattachments, they must:

1. Show the form number and tax year;

2. Show the organizations name and

employer identification number;3. Identify clearly the Part or line(s) to which

the attachments relate;

4. Include the information required by theform and use the same format as the form;

5. Follow the same Part and line sequenceas the form; and

6. Be on the same size paper as the form.

Part IRevenue, Expenses,and Changes in Net Assets orFund BalancesAll organizations filing Form 990 with the IRSor any state must complete Part I. Somestates that accept Form 990 in place of their

own forms require additional information.Line 1In General

Contributions, gifts, grants, and similaramounts received

Reporting for line 1, in accordance with SFAS116, is acceptable for Form 990 purposes,but not required by IRS. However, seeGeneral Instruction E.

An organization that receives a grant to bepaid in future years should, according toSFAS 116, Accounting for ContributionsReceived and Contributions Made, report thegrants present value on line 1. Accruals of


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present value increments to the unpaid grantshould also be reported on line 1 in futureyears.

On lines 1a through 1c, report amountsreceived as voluntary contributions; that is,payments, or the part of any payment, forwhich the payer (donor) does not receive fullretail value (fair market value) from therecipient (donee) organization. (For grants,see Grants that are equivalent tocontributions, below.) Report all expenses ofraising contributions in Fundraising, column(D), Part II, and on line 15 of Part I.

Contributions can arise from specialevents when an excess payment isreceived for items offered

Special fundraising activities such as dinners,door-to-door sales of merchandise, carnivals,and bingo games can produce bothcontributions and revenue. If a buyer, at suchan event, pays more for goods or servicesthan their retail value, report, as acontribution, both on line 1a and on line 9a(within the parentheses), any amount paid inexcess of the retail value. This situationusually occurs when organizations seekpublic support through solicitation programsthat are both special events or activities andsolicitations for contributions.

Example. An organization announces that

anyone who contributes at least $40 to theorganization can choose to receive a bookworth $16 retail value. A person who gives$40, and who chooses the book, is reallypurchasing the book for $16 and also makinga contribution of $24. The contribution of $24,which is the difference between the buyerspayment and the $16 retail value of the book,would be reported on line 1a and again onthe description line of 9a (within theparentheses). The revenue received ($16 retailvalue of the book) would be reported in theamount column on line 9a.

If a contributor gives more than $40, thatperson would be making a larger contribution,the difference between the books retail valueof $16 and the amount actually given. Rev.

Rul. 67-246, 1967-2 C.B. 104, explains thisprinciple in detail. See also the line 9instructions and Publication 1391.

The expenses directly relating to the sale ofthe book would be reported on line 9b.However, the expenses of raisingcontributions (that were entered within theparentheses of line 9a and on line 1a) wouldbe reported in Fundraising, column (D), PartII, and on line 15 of Part I.

Note: At the time of any solicitation orpayment, organizations that are eligible toreceive tax-deductible contributions shouldadvise patrons of the amount deductible forFederal tax purposes. See GeneralInstruction S.

Contributions can arise from specialevents when items of only nominal valueare given or offered

If an organization offers goods or services ofonly nominal value through a special event ordistributes free, unordered, low-cost items topatrons, report the entire amount received forsuch benefits as a contribution on line 1a(direct public support). Report all relatedexpenses in Fundraising, column (D), Part II.Benefits have a nominal value when:

a. The benefits fair market value is notmore than 2% of the payment, or $66,whichever is less; or

b. The payment is $33 or more; the onlybenefits received are token items bearing theorganizations name or symbol; and theorganizations cost (as opposed to fair marketvalue) is $6.60 or less for all benefits receivedby a donor during the calendar year. Theseamounts are adjusted annually for inflation.See Rev. Proc. 94-72 cited also in GeneralInstruction S.

Section 501(c)(3) organizations

Correctly dividing gross receipts from specialevents into revenue and contributions isespecially important for a section 501(c)(3)

organization that claims public support asdescribed in section 170(b)(1)(A)(vi) or section509(a)(2). In the public support computationsof these Code sections, the revenue portionof gross receipts may be (a) excludedentirely, (b) treated as public support, or (c) ifthe revenue represents unrelated trade orbusiness income, treated as nonpublicsupport.

Section 501(c)(3) organizations mustseparate gross receipts from special eventsinto revenue and contributions whenpreparing the Support Schedule in Part IV-Aof Schedule A (Form 990).

Section 501(c)(9), (17), and (18)organizations

These organizations provide participants withlife, sickness, accident, welfare, andunemployment insurance, pensions, or similarbenefits, or a combination of these benefits.When such an organization receivespayments from participants or their employersto provide these benefits, report thepayments on line 2 as program servicerevenue, rather than on line 1 ascontributions.

Donations of services are not contributions

In Part I, do not include the value of servicesdonated to the organization, or items such asthe free use of materials, equipment, orfacilities as contributions on line 1. See theinstructions for Part III and for Part VI, line 82,for the optional reporting of such amounts inParts III and VI.

Grants that are equivalent to contributions

Grants that encourage an organizationreceiving the grant to carry on programs oractivities that further its exempt purposes aregrants that are equivalent to contributions.Report them on line 1. The grantor mayrequire that the programs of the grantrecipient (grantee) conform to the grantorsown policies and may specify the use of thegrant, such as use for the restoration of ahistoric building or a voter registration drive.

A grant is still equivalent to a contribution ifthe grant recipient provides a service ormakes a product that benefits the grantorincidentally. (See examples in the line 1cinstructions.) However, a grant is a paymentfor services, and not a contribution, if thegrant requires the grant recipient to providethat grantor with a specific service, facility, orproduct rather than to give a direct benefitprimarily to the general public or to that partof the public served by the organization. Ingeneral, do not report as contributions anypayments for a service, facility, or productthat primarily give some economic or physicalbenefit to the payer (grantor).

Example. A public interest organizationdescribed in section 501(c)(4) makes a grantto another organization to conduct a

nationwide survey to determine voterattitudes on issues of interest to the grantor.The grantor plans to use the results of thesurvey to plan its own program for the next 3years. Under these circumstances, since thesurvey serves the grantors direct needs andbenefits the grantor more than incidentally,the grant to the organization making thesurvey is not a contribution. The grantrecipient should not report the grant as acontribution but should report it on line 2 asprogram service revenue.

Treat research to develop products for thepayers use or benefit as directly serving thepayer. However, generally, basic research orstudies in the physical or social sciencesshould not be treated as serving the payersneeds.

See Regulations sect ion 1.509(a)3(g) todetermine if a grant is a contributionreportable on line 1 or a revenue itemreportable elsewhere on Form 990.

Noncash contributions

To report contributions received in a formother than cash, use the market value as ofthe date of the contribution. For marketablesecurities registered and listed on arecognized securities exchange, measuremarket value by the average of the highestand lowest quoted selling prices (or the

average between the bona fide bid and askedprices) on the contribution date. See section20.2031-2 of the Estate Tax Regulations forrules to determine the value of contributedstocks and bonds. When market value cannotbe readily determined, use an appraised orestimated value.

To determine the amount of any noncashcontribution that is subject to an outstandingdebt, subtract the debt from the propertysfair market value. Record the asset at its fullvalue and record the debt as a liability in thebooks of account. See the Note in theinstructions for line 1d.

Line 1aDirect public support

Contributions, gifts, grants, and similar

amounts received.Enter the grossamounts of contributions, gifts, grants, andbequests that the organization receiveddirectly from the public. Include amountsreceived from individuals, trusts, corporations,estates, and foundations. Also includecontributions and grants from public charitiesand other exempt organizations that areneither fundraising organizations nor affiliatesof the filing organization. See the instructionsfor line 1b.

Membership dues.Report on line 1amembership dues and assessments thatrepresent contributions from the public ratherthan payments for benefits received orpayments from affiliated organizations. Seethe instructions for line 3.

Government contributions (grants).Reportgovernment grants on line 1c if they representcontributions, or on line 2 (and on line 93(g)of Part VII), if they represent fees for services.See the instructions in the paragraphs entitledGrants that are equivalent to contributionsunder Line 1In General, and theinstructions for line 1c.

Commercial co-venture.Report amountscontributed by a commercial co-venture online 1a as a contribution received directlyfrom the public. These are amounts receivedby an organization (donee) for allowing anoutside organization (donor) to use the


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donees name in a sales promotion campaign.In such a campaign, the donor advertises thatit will contribute a certain dollar amount to thedonee organization for each unit of aparticular product or service sold or for eachoccurrence of a specific type.

Contributions received through specialevents.Report contributions receivedthrough special events on line 1a. See thepreceding line 1 instructions and theinstructions for line 9.

Line 1bIndirect public support

Enter the total contributions receivedindirectly from the public through solicitationcampaigns conducted by federatedfundraising agencies and similar fundraisingorganizations (such as a United Wayorganization and certain sectarianfederations). These organizations normallyconduct fundraising campaigns within asingle metropolitan area or some part of aparticular state and allocate part of the netproceeds to each participating organizationon the basis of the donors individualdesignations and other factors.

Include on line 1b amounts contributed byother organizations closely associated withthe reporting organization. This includescontributions received from a parentorganization, subordinate, or another

organization with the same parent. Nationalorganizations that share in fundraisingcampaigns conducted by their local affiliatesshould report the amount they receive on line1b.

Line 1cGovernment contributions (grants)

The general line 1 instructions, under theheading, Grants that are equivalent tocontributions, apply to this item in particular.A grant or other payment from agovernmental unit is treated as a contributionif its primary purpose is to enable the doneeto provide a service to, or maintain a facilityfor, the direct benefit of the public rather thanto serve the direct and immediate needs ofthe grantor even if the public pays part of the

expense of providing the service or facility.The following are examples of

governmental grants and other payments thatare treated as contributions:

1. Payments by a governmental unit for theconstruction or maintenance of library orhospital facilities open to the public,

2. Payments under government programsto nursing homes or homes for the aged inorder to provide health care or other servicesto their residents,

3. Payments to child placement or childguidance organizations under governmentprograms serving children in the community.The general public gets the primary anddirect benefit from these payments and anybenefit to the governmental unit itself wouldbe indirect and insubstantial as compared tothe public benefit.

Line 1dTotal contributions, etc.

Enter the total of amounts reported on lines1a through 1c. In the entry spaces in thedescription column for line 1d, enter theseparate totals for cash and noncashcontributions, gifts, grants, and similaramounts received. The total of the twoamounts must equal the total on line 1d.

Report as cash contributions, etc., onlycontributions, etc., received in the form ofcash, checks, money orders, credit card

charges, wire transfers and other transfersand deposits to a cash account of theorganization. If your organization recordspledges as contributions, etc., at the time thepledges are made (rather than when thepledges are collected), include as cashcontributions, etc., only those pledgesactually collected in cash during the year andpledges uncollected at the end of the yearthat are reasonably expected to be paid incash in a later year. Report all othercontributions, etc., as nonca

US Internal Revenue Service: i990--1995

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Transcript of US Internal Revenue Service: i990--1995