Instructions for Schedule A (Form 990 or 990-EZ)

Transcription

1 2005 Instructions for Schedule A (Form 990 or 990-EZ) Section references are to the Internal Revenue Code unless otherwise noted. Department of the Treasury Internal Revenue Service Contents Page These organizations must use of the Instructions for Form 990 and Form Part I. Compensation of the Five Schedule A (Form 990 or 990-EZ) to 990-EZ for details on this and other Highest Paid Employees Other furnish additional information not required penalties. Than Officers, Directors, and of other types of organizations that file To avoid having to respond to requests Trustees... 1 Form 990, Return of Organization Exempt for missing information, please be sure to: Part II-A. Compensation of the From Income Tax, or Form 990-EZ, Short Complete all applicable line items; Five Highest Paid Independent Form Return of Organization Exempt Answer Yes or No to each question Contractors for Professional From Income Tax. on the return; Services... 2 Section 6033(b) and Rev. Proc , Make an entry (including a zero when Part II-B. Compensation of the C.B. 587 require this additional appropriate) on all total lines; and Five Highest Paid Independent information. Enter None or N/A if an entire part Contractors for Other Services Note. For purposes of these instructions, does not apply. Part III. Statements About the term section 501(c)(3) includes Activities... 2 organizations exempt under sections: Part IV. Reason for Non-Private 501(e), Cooperative Hospital Service Specific Instructions Foundation Status... 3 Organizations, Attach separate sheets on which you Part IV-A. Support Schedule (f), Cooperative Service follow the same format and sequence as Part V. Private School Organizations of Operating Educational on the printed form, if you need more Questionnaire... 7 Organizations, space for any part or line item. Part VI-A. Lobbying 501(k), Child Care Organizations, and Show totals on the printed form. Expenditures by Electing 501(n), Charitable Risk Pools. Put the organization s name and Public Charities... 9 employer identification number (EIN) on Part VI-B. Lobbying Activity by Who Must File the attached separate sheets and identify Nonelecting Public Charities the part or line that the attachments An organization described in section Part VII. Information Regarding support. 501(c)(3) or a nonexempt charitable trust Transfers To and Transactions You may round off cents to whole described in section 4947(a)(1) must and Relationships With dollars on your return and schedules. If complete and attach Schedule A (Form Noncharitable Exempt you do round to whole dollars, you must 990 or 990-EZ) to its Form 990 or Form Organizations round all amounts. To round, drop 990-EZ. Index amounts under 50 cents and increase If an organization is not required to file amounts from 50 to 99 cents to the next Form 990, or Form 990-EZ, it is not dollar. For example, $1.39 becomes $1 required to file Schedule A (Form 990 or and $2.50 becomes $ EZ). What s New If you have to add two or more Do not use Schedule A (Form 990 or amounts to figure the amount to enter on We added Part II-B. This part asks for 990-EZ) if an organization is a private a line, include cents when adding the information about the compensation of foundation. Instead, file Form 990-PF, amounts and round off only the total. the five highest paid independent Return of Private Foundation. contractors for other services. Part I. Compensation of We added a new question to line 3c in Period Covered Part III that asks about the receipt of The organization s Schedule A (Form 990 the Five Highest Paid qualified real property interests for or 990-EZ) should cover the same period organizations that received a qualified Employees Other Than as the Form 990, or Form 990-EZ, with conservation contribution. which it is filed. Officers, Directors, and Line 13 in Part IV has been revised. Organizations that check the box for line Penalties Trustees 13 must also check the box that describes Complete Part I for the five non-key the type of supporting organization. Schedule A (Form 990 or 990-EZ) is employees with the highest annual considered a part of Form 990, or Form compensation over $50,000. At the 990-EZ, for section 501(c)(3) bottom of the table, enter the number of organizations and section 4947(a)(1) other employees with annual General Instructions nonexempt charitable trusts that are compensation over $50,000 who are not required to file either form. Therefore, any individually listed in Part I. such organization that does not submit a Purpose of Form completed Schedule A (Form 990 or Do not include employees listed in Schedule A (Form 990 or 990-EZ) is used 990-EZ) with its Form 990, or Form Part V-A of Form 990 or in Part IV by: 990-EZ, does not satisfy its filing CAUTION of Form 990-EZ (List of Officers, Section 501(c)(3) organizations, and requirement and may be charged a $20 a Directors, Trustees, and Key Employees). Section 4947(a)(1) nonexempt day penalty ($100 a day for large Also do not include key employees in charitable trusts. organizations). See General Instruction K table one. Cat. No Q!

2 In columns (c) through (e), show all See Pub. 525, Taxable and include the additional information cash and noncash forms of compensation Nontaxable Income, for more information. discussed under those Parts; otherwise, for each listed employee whether paid the return may be considered incomplete. currently or deferred. The organization Part II-A. Compensation of Enter the total expenses paid or may also provide an attachment to the Five Highest Paid incurred in connection with the lobbying explain the entire year 2005 activities described on line 1. The amount compensation package for any person Independent Contractors of expenses you enter must equal the listed in Part I. amounts on line 38, Part VI-A, or line i, for Professional Services Column (c) Part VI-B. If columns (a) and (b) of line 38 Complete Part II-A for the five highest are both completed, enter both amounts Enter salary, fees, bonuses, and paid independent contractors (whether separately on line 1. severance payments received by each individuals or firms) who performed listed employee. Include current year Substantial part test. In general, a personal services of a professional nature payments of amounts reported or section 501(c)(3) organization may not for the organization and, in return, reportable as deferred compensation in devote a substantial part of its activities to received over $50,000 for the year from any prior year. attempts to influence legislation. Under the organization. the substantial part test, if such an Column (d) Also show the number of other organization engages in substantial Include in column (d) all forms of deferred independent contractors who received lobbying activities, the organization will compensation and future severance more than $50,000 for the year for lose both its tax-exempt status and its payments (whether or not funded, performing professional services but who ability to receive tax-deductible charitable whether or not vested, and whether or not are not individually listed in Part II-A. contributions. Except for churches, certain the deferred compensation plan is a Independent contractors are persons church affiliated organizations, and qualified plan under section 401(a)). who are not treated as employees for private foundations, an organization that Include in this column payments to employment tax purposes. Independent loses its section 501(c)(3) status because welfare benefit plans on behalf of the contractors may be individuals or firms. it did not meet the substantial part test will employee. Such plans provide benefits Professional independent contractors owe an excise tax under section 4912 on such as medical, dental, life insurance, would generally include attorneys, all of its lobbying expenditures. Managers severance pay, disability, etc. accountants, auditors, health care of the organization may also be jointly Reasonable estimates may be used if professionals, investment advisors, and and severally liable for this tax. precise cost figures are not readily professional fundraisers. Expenditure test. As an alternative available. The organization may, at its discretion, to the substantial part test, eligible public Unless the amounts are reported in provide an attachment to explain the charities may elect the expenditure test of column (c), report as deferred entire year 2005 compensation package section 501(h). The expenditure test compensation in column (d), salaries and for any person listed in Part II-A. generally permits higher limits for other compensation earned during the lobbying expenditures than allowed under Fundraising fees exceeding $50,000 period covered by the return, but not yet the substantial part test. Electing public should be reported in Part II-A, but not paid by the date the organization files its charities are subject to the lobbying reimbursements for amounts paid by the return. expenditure definitions of section 4911, fundraiser to others for printing, paper, which are generally more liberal than the Column (e) envelopes, postage, mailing list rental, definitions under the substantial part test. etc. Part II-A is intended for the fee Enter in column (e) both taxable and Section 4911 applies only to public portion of payments to contractors, not for nontaxable fringe benefits (other than de charities that made a valid section 501(h) any expense reimbursements. minimis fringe benefits described in election by filing Form 5768, Election/ section 132(e)). Include expense Revocation of Election by an Eligible Part II-B. Compensation of allowances or reimbursements that the Section 501(c)(3) Organization To Make recipients must report as income on their the Five Highest Paid Expenditures To Influence Legislation. separate income tax returns. Examples Electing public charities. If the include: Independent Contractors organization is an electing public charity, Amounts for which the recipient did not for Other Services you must complete Part VI-A of this form. account to the organization, Complete Part II-B for the five highest Nonelecting public charities. If the Allowances that were more than the paid independent contractors (whether organization checked Yes but is not an payee spent on serving the organization, individuals or firms) who performed electing public charity, you must complete and services, that were other than services of Part VI-B and attach a statement giving a Payments made in connection with a professional nature for the organization detailed description of the organization s indemnification arrangements, the value and, in return, received over $50,000 for lobbying activities. of the personal use of housing, the year from the organization. For a automobiles, or other assets owned or All charities, both electing and definition of independent contractor, see leased by the organization (or provided nonelecting, are absolutely Part II-A, above.! CAUTION for the organization s use without charge), prohibited from intervening in a as well as any other taxable and Also show the number of other political campaign for or against any nontaxable fringe benefits. independent contractors who received candidate for an elective public office. If a Example. S is not a key employee. S more than $50,000 for the year for charity does intervene in a political receives a salary of $35,000 and a $3,000 performing such services but who are not campaign, it will lose both its tax-exempt bonus. S also receives company-paid individually listed in Part II-B. status and its eligibility to receive medical, dental, and life insurance The organization may include an tax-deductible charitable contributions. benefits for his family of $12,000. During attachment that explains the 2005 Both the organization and its managers the year, S received family educational compensation package for any person are subject to the tax on political benefits of $5,000. Enter in column (c) listed in Part II-B. expenditures under section $38,000; enter in column (d) $12,000; Line 2. See Part IV, Definitions, for the enter in column (e) $5,000. Total Part III. Statements About meaning of the term family member. compensation of S is $55,000, even Lines 2a through 2e. These lines apply Activities though his salary and bonus are only to both sides of a listed transaction. $38,000. S should be listed in Part I as Line 1. If you checked Yes on this line, Reporting is required, for example, one of the highest paid employees. you must complete Part VI-A or VI-B and whether the exempt organization is a -2- Instructions for Schedule A (Form 990 or 990-EZ)

3 payer or payee, buyer or seller, lender or Acting as an escrow agent for debtors; Part IV-A borrower. or Support does not include.. line Line 2d. Compensation or repayment. Participating in creditor Fair Share If the only compensation or repayment Contributions of services for which a arrangements. relates to amounts the organization deduction is not allowable. reported in Part V-A of Form 990, or Part IV of Form 990-EZ, check Yes and write *Note. For organizations that checked the box on SeePart V-A, Form 990, or See Part IV Part IV. Reason for line 12, the amounts on line 17 of the Support of Form 990-EZ, on the dotted line to the Schedule are included in support. left of the entry space. Non-Private Foundation Support from a governmental unit, Line 3a. Scholarships, etc. The term Status with certain exceptions described below, qualify in line 3a means that organizations includes: or individuals will use the funds the Definitions Any amounts received from a organization provides for charitable The following terms are used in more governmental unit, including donations or purposes described in sections 170(c)(1) than one item in Part IV. The definitions contributions and amounts received in and 170(c)(2). given below generally apply. connection with a contract entered into The term qualify also means that with a governmental unit for the individual recipients belong to a charitable performance of services or in connection class and the payments are to aid them. Support (for lines 10, 11, and 12 of with a government research grant, Examples include: Part IV), with certain qualified exceptions provided these amounts are not excluded Helping the aged poor; described below, means all forms of from the term support as amounts Training teachers and social workers support including (but not limited to): received from exercising or performing from underdeveloped countries; and the organization s charitable purpose or Awarding scholarships to individuals. Part IV-A function. Support includes... line An amount paid by a governmental Line 3b. Section 403(b) annuity plan. unit to an organization is not treated as Indicate whether you have a section Gifts, grants, contributions, received from exercising or performing its 403(b) annuity plan available for your membership fees and 16 charitable, etc., purpose or function if the employees. payment is to enable the organization to Line 3c. Qualified real property Any amounts an organization receives provide a service to, or maintain a facility interest. Answer Yes if the organization from the exercise or performance of its for, the direct benefit of the public, as for received a qualified conservation charitable, educational, or other example, to maintain library facilities that contribution of a qualified real property purpose or function constituting the are open to the public. interest under section 170(h). A qualified basis for its exemption* Tax revenues levied for the real property interest means any of the organization s benefit and either paid to or following interests in real property. Net income from unrelated expended on its behalf. The entire interest of the donor (other business activities, whether or The value of services or facilities than qualified mineral interest), not such activities are carried on (exclusive of services or facilities A remainder interest, or regularly as a trade or business 18 and 19 generally furnished, without charge, to the A restriction (granted in perpetuity) on public) furnished by a governmental unit the use of the real property (a Gross investment income, such as to the organization without charge. For conservation easement). interest, dividends, rents, and royalties 18 example, a city pays the salaries of For additional information on personnel to guard a museum, art gallery, contributions of conservation easements, Tax revenues levied for the benefit of etc., or provides the use of a building rent see section 170(h) and Notice an organization and either paid to or free. However, the term does not include expended on behalf of such Line 4a. Check Yes to line 4a if the the value of any exemption from federal, organization; and organization maintained separate state, or local tax or any similar benefit. accounts for any participating donor Indirect contributions from the general during the tax year even though the donor The value of services or facilities public. Indirect contributions are what did not make a contribution for that year (exclusive of those generally furnished the organization receives from other or the donor has not exercised his or her to the public without charge) furnished organizations that receive a substantial right to make a suggestion on the by a governmental unit referred to in part of their support from general public charitable use of funds in the account or Code section 170(c)(1) to an contributions. An example is the its distribution for charity. organization without charge organization s share of the proceeds from an annual community chest drive (such Community foundations may maintain *Note.The amounts on line 17 are included as as the United Way or United Fund). separate accounts for participating donors support only for those organizations that checked These are included on line 15. within the meaning of this question. the box on line 12. Otherwise, the amounts on line 17 are not included in support. Disqualified person. A disqualified Line 4b. Answer Yes to this question if person is: the organization provides any of the following types of credit counseling and/or Part IV-A 1. A substantial contributor, who is debt management activities: Support does not include.. line a. Any person who gave an aggregate Educating and/or counseling amount of more than $5,000, if that consumers, in person, in writing, or using Any amounts an organization receives amount is more than 2% of the total electronic means; from the exercise or performance of its contributions the foundation or Helping consumers consolidate debts; charitable, educational, or other organization received from its inception Negotiating with creditors on behalf of purpose or function constituting the through the end of the year in which that consumers to lower interest rates, waive basis for its exemption* person s contributions were received. fees, adjust balances, or restore b. The creator of a trust (without acceptable credit ratings; Any gain upon the sale or exchange of regard to the amount of contributions Offering, selling, or managing debt and/ property which would be considered under received by the trust from the creator and or loan consolidation services and any section of the Code as gain from the other persons). programs or down payment assistance sale or exchange of a capital asset. Any person who is a substantial services; contributor at any time generally remains Instructions for Schedule A (Form 990 or 990-EZ) -3-

4 a substantial contributor for all future Line 7. Hospital or Cooperative one or more states or their political periods even if later contributions by Hospital Service Organization. Check subdivisions. The school must be as others push that person s contributions the box on line 7 for an organization described in the first paragraph of the below the 2% figure discussed above. whose main purpose is to provide hospital instructions for line 6. Gifts from the contributor s spouse or medical care. A rehabilitation institution are treated as gifts from the contributor. or an outpatient clinic may qualify as a Expending funds to benefit a college or Gifts are generally valued at fair hospital, but the term does not include university includes acquiring and market value as of the date the medical schools, medical research maintaining the campus, its buildings, and organization received them. organizations, convalescent homes, its equipment, granting scholarships and 2. An officer, director, or trustee of homes for the aged, or vocational training student loans, and making any other the organization or any individual having institutions for the handicapped. payments in connection with the normal powers or responsibilities similar to those Check the box on line 7 also for a functions of colleges and universities. of officers, directors, or trustees. cooperative hospital service organization 3. An owner of more than 20% of the described in section 501(e). The organization must meet voting power of a corporation, profits essentially the same public support test Line 9. Hospital Medical Research interest of a partnership, or beneficial described below for line 11. See Rev. Rul. Organization. Check the box on line 9 interest of a trust or an unincorporated , C.B for a medical research organization enterprise that is a substantial contributor operated in connection with or in Line 11. Organization Meeting the to the organization. conjunction with a hospital. The hospital Section 509(a)(1) Public Support Test. 4. A family member of an individual in must be described in section 501(c)(3) or Check either box (but not both) on line the first three categories. A family operated by the Federal government, a 11a or 11b and complete the Support member includes only a person s spouse, state or its political subdivision, a U.S. Schedule to determine whether the ancestors, children, grandchildren, great possession or its political subdivision, or organization meets the section 509(a)(1)/ grandchildren, and the spouses of the District of Columbia. 170(b)(1)(A)(vi) public support test children, grandchildren, and great Medical research means studies and described below. grandchildren. experiments done to increase or verify 5. A corporation, partnership, trust, or information about physical or mental The Support Schedule is completed for estate in which persons described in 1 diseases and disabilities and their an organization that normally (see Part through 4 above own more than 35% of causes, diagnosis, prevention, treatment, IV, Definitions) receives at least 33 1 /3% of the voting power, profits interest, or or control. The organization must conduct its support (excluding income received in beneficial interest. See section the research directly and continuously. If exercising its charitable, etc., function) 4946(a)(1). it primarily gives funds to other from: organizations (or grants and scholarships Direct or indirect contributions from the Normally to satisfy public support test. to individuals) for them to do the general public; An organization is considered normally to research, the organization is not a satisfy the public support test (for lines Other publicly supported (section medical research organization. 10, 11, and 12 of the Support Schedule) 170(b)(1)(A)(vi)) organizations; or The organization is not required to be for its current tax year and the tax year A governmental unit. an affiliate of the hospital, but there must immediately following its current tax year, be an understanding that there will be if the organization satisfies the applicable To determine whether the section close and continuous cooperation in any support test for the 4 tax years 509(a)(1)/170(b)(1)(A)(vi) test is met, joint-effort medical research. immediately before the current tax year. donor contributions are considered Assets test/expenditure test. An support from direct or indirect If the organization has a material organization qualifies as a medical contributions from the general public only change (other than from unusual grants research organization if its principal to the extent that the total amount see instructions for line 28) in its sources purpose is medical research, and it received from any one donor during the of support during the current tax year, the devotes more than half its assets, or 4-tax-year period is 2% or less of the data ordinarily required in the Support spends at least 3.5% of the fair market organization s total support for those 4 tax Schedule covering the years 2001 value of its endowment, in conducting years as described below. through 2004 must be submitted for the medical research directly. Any contribution by one individual will years 2001 through Prepare and Either test may be met based on a be included in full in the total support attach a 5-year schedule using the same computation period consisting of the denominator of the fraction determining format as provided in the Support immediately preceding tax year or the the 33 1 /3%-of-support or the Schedule for lines 15 through 28. immediately preceding 4 tax years. 10%-of-support limitation. Lines 5 through 14. Reason for If an organization does not satisfy Only the portion of each donor s Non-Private Foundation Status. Check either the assets test or the expenditure contribution that is 2% or less of the total one of the boxes on these lines to test, it may still qualify as a medical support denominator will be included in indicate the reason the organization is not research organization, based on the the numerator. a private foundation. The organization s circumstances involved. In applying the 2% limitation, all exemption letter states this reason, or the These tests are discussed in contributions by any person(s) related to local IRS office can tell you. Regulations sections 1.170A-9(c)(2)(v) the donor as described in section and (vi). Value the organization s assets 4946(a)(1)(C) through (G) (and related Line 6. School. Check the box on line 6 as of any day in its tax year but use the regulations) will be treated as if made by for a school whose primary function is the same day every year. Value the the donor. presentation of formal instruction, and endowment at fair market value, using which regularly has a faculty, a The 2% limitation does not apply to commonly accepted valuation methods. curriculum, an enrolled body of students, support from governmental units referred (See Regulations section ) and a place where educational activities to in section 170(c)(1), or to contributions are regularly conducted. Line 10. Organization Operated for the from publicly supported organizations Benefit of a Governmental Unit. Check (section 170(b)(1)(A)(vi)), that check the A private school, in addition, must the box on line 10 and complete the box on their line 11a or 11b. have a racially nondiscriminatory policy Support Schedule if the organization toward its students. For details about receives and manages property for and Example. X organization reported the these requirements, see the instructions expends funds to benefit a college or following amounts in its Support Schedule for Part V. university that is owned or operated by for the 4-year period 2001 through 2004: -4- Instructions for Schedule A (Form 990 or 990-EZ)

5 Line (e) Total support from the general public. If you organization, if the distribution normally 15 Gifts, grants & contributions.. $300,000 believe your organization is publicly comprises at least 5% of the distributee supported according to applicable organization s adjusted net income. 17 Gross receipts from regulations, attach a detailed statement of admissions, etc ,000 If an organization receives an amount the facts upon which you base your from a split-interest trust described in 18 Dividends & interest ,000 conclusion. section 4947(a)(2) that is required to 24 Line 23 minus line ,000 Line 12. Organization Meeting the distribute, or normally distributes, at least Section 509(a)(2) Public Support Tests. 25% of its adjusted net income to 26a 2% of line 24 (2% limitation).. 12,000 Check the box on line 12 and complete asection 509(a)(2) organization, and the b Total of contributions the Support Schedule to determine distribution normally comprises at least exceeding the 2% limitation.. 98,000 whether an organization meets both of 5% of the distributee organization s the following section 509(a)(2) support adjusted net income, the amount retains The X organization determined tests: the character of gross investment income whether or not it met the section 1. The organization normally receives if it would be characterized as gross 509(a)(1)/170(b)(1)(A)(vi) public support more than one-third of its support for each investment income attributable to test as follows: tax year from: transfers in trust after May 26, 1969, if the Persons other than disqualified trust were a private foundation. Total support (line 24):... $600,000 persons (see Part IV, Definitions) with All income characterized under the Direct Contributions: respect to the organization, rules above as gross investment income Total direct contributions from Governmental units (described in in the possession of the distributing persons who contributed less than section 170(c)(1)), or organization is considered to be 2% of total support... 50,000 Organizations described in section distributed first by the organization and Total direct contributions from six 170(b)(1)(A) (other than in clauses (vii) keeps its character as such in the donors, each of whom gave more and (viii)), and possession of the recipient. than 2% ($12,000) of total support 170,000 Such support is received by the For more details, see Regulations organization from any combination of: Indirect contributions from the section 1.509(a)-5 that covers special Gifts, grants, contributions, or general public: rules of attribution. membership fees, and United Fund... 40,000 Gross receipts from admissions, If the organization received any sales of merchandise, performance of amounts from either kind of organization Grant from Y City... 40,000 services, or furnishing of facilities, in an above, attach a statement. Show the Total gifts, grants & contributions.. $300,000 activity that is not an unrelated trade or amounts received from each organization, business (within the meaning of section including amounts, such as gifts, that are Total direct contributions from six donors, each of 513). not investment income. whom gave more than 2% Gross receipts, in any tax year, do not Example. T organization reported the of total support...$170,000 include receipts from any person, bureau, following amounts in its Support Schedule or similar agency of a government unit 2% limitation for six for the 4-year period 2001 through 2004: (described in section 170(c)(1)) to the donors: extent such receipts exceed the greater of (2% $600,000 6)... 72,000 Line (e) Total $5,000 or 1% of the organization s Less: Direct contributions in excess support in such tax year. 15 Gifts, grants & contributions.. $45,000 of 2% of total support... 98, The organization normally receives 16 Membership fees... 50,000 Total public support ,000 not more than one-third of its support 17 Gross receipts from each tax year from the sum of: Section 509(a)(1)/170(b)(1)(A)(vi) admissions, merchandise, etc. 25,000 Gross investment income (as computation: defined in section 509(e)), and 18 Gross income from interest, Line 26c Total support... $600,000 The excess (if any) of the amount of dividends, etc ,000 the unrelated business taxable income Line 26d Less total of lines: 23 Total of lines 15 through 22.. $200,000 (as defined in section 512) over the 18...$300,000 amount of the tax imposed by section 27a Gifts from disqualified persons $25, b Excess gross receipts from 26b... 98,000 $398,000 nondisqualified persons... $20,000 Gross investment income. When Line 26e Total public support... $202,000 determining whether an organization T organization determined whether or Line 26f Public support meets the gross investment income test not it met the one-third tests of section percentage (line 26e of section 509(a)(2)(B), amounts received 509(a)(2) in the following computation: divided by line 26c from the following organizations retain the $202,000/ $600,000) % character of gross investment income Section 509(a)(2) computation: (rather than gifts or contributions) to the Line Since X organization received more extent that these organizations 27c Add: Amounts from column (e), than 33 1 /3% of its total support for the characterize the amounts as gross lines 15, 16, 17, 20, and $120,000 period from public sources, it qualifies as investment income: a section 509(a)(1)/170(b)(1)(A)(vi) An organization that claims to be 27d Total of line 27a... $25,000 publicly supported organization. Note that described in section 509(a)(3) because it Total of line 27b... 20,000 45,000 if an organization fails the public support supports a section 509(a)(2) organization; test for 2 consecutive years, it loses its 27e Public support (line 27c minus or public charity status and becomes a line 27d total)... $75,000 A charitable trust, corporation, fund, or private foundation. 27f Total support (line 23, association described in section 501(c)(3) column (e))...$200,000 Facts and circumstances Public (including a nonexempt charitable trust 27g Public support percentage (line support test. An organization that does described in section 4947(a)(1)), that is 27e divided by line 27f not qualify as publicly supported under required to distribute, or normally $75,000/$200,000) % the test described above may be publicly distributes, at least 25% of its adjusted 27h Investment income percentage supported on the basis of the facts in its net income (within the meaning of section (line 18 divided by line 27f case if it receives at least 10% of its 4942(f)) to a section 509(a)(2) $80,000/$200,000) % Instructions for Schedule A (Form 990 or 990-EZ) -5-

6 T organization received 37.50% of its amounts payable under the grant are If the organization has not existed total support from the public and thus met received by the grantee. during the whole period the Support the more-than-one-third test of public Schedule covers, fill in the information for support to total support. T organization s If the organization uses the accrual the years that apply. If the organization s investment income percentage was method of accounting, a worksheet such status is based on years not shown in the 40.00%. Therefore, it did not meet the as the one that follows may be used to Support Schedule, attach an additional second part of the section 509(a)(2) convert any revenue account from an schedule for the other years. test the not-more-than-one-third of total accrual basis to a cash basis. support from gross investment income Lines 15, 16, 17, 26, and 27. See Part and net unrelated business taxable Worksheet to convert a revenue IV, Definitions. See also Regulations income. account from the accrual to the cash section 1.509(a)-3 for the: Since T organization did not satisfy basis 1. Distinction between gross receipts both of the one-third tests of section from gifts and contributions, grants, and 509(a)(2), it failed the section 509(a)(2) gross investment income, and 1. Revenue per books public support test for this year. An 2. Definition of membership fees and (accrual basis)... organization that fails the public support a bureau or similar agency of a 2. Add: governmental unit. test for 2 consecutive years loses its public charity status and becomes a a. Beginning-of-year entry private foundation. (if any) reversing accrual of Note. Organizations completing line 26 income at the end of the should note the instructions and Line 13. Supporting Organization. prior year; and... examples for lines 10 or 11 regarding the Check the box at the beginning of line 13 public support test applicable to their type that describes the organization type and b. Any amounts collected of organization. complete columns (a) and (b) for a during the year that were supporting organization operated only for not credited to the revenue Organizations completing line 27 the benefit of and in connection with account in the current year should note the instructions and organizations listed in lines 5 through 12, 3. Subtotal... examples for line 12 for guidance in or with organizations described in section computing their public support test. 501(c)(4), (5), or (6) that meet the tests of 4. Less: Line 17. Gross Receipts From section 509(a)(2) (described in line 12). Income accrued during the Activities Related to Organization s General principles governing supporting current year but not Charitable, etc., Purpose. Include organizations are described in collected as of the end of income generated by the organization s Regulations section 1.509(a)-4. the year... exempt function activities (charitable, For column (b), identify the 5. Revenue on a cash basis educational, etc.) and by its nontaxable organization supported if it is included in fundraising events (excluding any lines 5 through 12. For example, if your organization supported a hospital, enter Line 26b Example 7 in column (b). Organization Type. The information below, describes a Type 1, Type 2, or a Amount on line 26a of 2005 Schedule A (2% limitation)... $12,000 Type 3, supporting organization. Contributors whose total gifts from 2001 through 2004 were in excess of the Type 1 supporting organization is 2% limitation operated, supervised, or controlled by one or more supported organizations. (a) (b) (c) (d) (e) (f) (g) Type 2 supporting organization is Name Total Excess supervised or controlled in connection contri- with the supported organization. butions Type 3 supporting organization is (col. (f) less operated in connection with one or more the publicly supported organizations. 2% See Schedule D (Form 1023) and its limitation) instructions and Regulations section 1.509(a)-4 for more information. XYZ Foundation $59,000 $ 3,000 $62,000 $50,000 Line 14. Organization Operated to Test for Public Safety. Check the box on line 14 only if the organization has received a Apple Office ruling from the IRS that it is organized Supply $12,000 3,000 15,000 3,000 and operated primarily to test for public safety. Plum 15,000 15,000 30,000 18,000 Corporation Part IV-A. Support Schedule Complete the Support Schedule if a box on line 10, 11, or 12 was checked. John Smith 5,000 $5,000 5,000 1,000 16,000 4,000 Sue Adams 10,000 10,000 20,000 8,000 Note. The Support Schedule must be completed on the cash method of accounting. Apple Trade For example, if a grantor makes a Assoc. 20,000 7,000 27,000 15,000 grant to an organization payable over a term of years, such grant will be includible Total (Carry the total of column (g) to line 26(b) of the 2005 Schedule in the support fraction of the grantee A (Form 990 or 990-EZ)). $98,000 organization only when and to the extent -6- Instructions for Schedule A (Form 990 or 990-EZ)

7 contributions received, which are reported 2. $5,000. Line 28 Example on line 15). After computing the difference between Examples include income from: the amount received and the larger Year 2004 Description 1. Ticket sales to performances by a amount described in 1 or 2, enter the sum symphony orchestra, of these differences (the excess amounts) Name Mr. Disinterested Undeveloped 2. Raffles, bingo, or for each year. An example of such a list Donor land 3. Fundraising events, income from for line 27b is given below for the year (Volume which is not taxable as unrelated 2004 entry line. Prepare similar lists to Date of Grant January 15, 578, page business income because: 2004 xxx, Dept. of determine excess amounts for the other Substantially all the work is performed Land entry lines of 27b. (Do not file these lists without compensation, or Records, with your return.) Carried on by the organization Jefferson primarily for the convenience of its County, Line 27b Example Ohio) members, or Amount of Grant $6,000 Consists of the selling of Year 2004 merchandise, substantially all of which has been received by the organization as (a) (b) (c) (d) (e) Name Amount Amount Enter Year Part V. Private School gifts or contributions (section 513(a)(1), received on the (2004) (2), or (3)). in line 25 larger Excess Questionnaire (2004) for of (column All schools that checked the box on line 6, Line 26b. Contributions in Excess of (2004) column (b) less Part IV, must complete Part V. Relevant the 2% Limitation. Prepare a list for your (c) or column parts of Rev. Proc , C.B. files to show the name of and amount $5000 (d)) 587 are given below. The revenue contributed by each person (other than a procedure gives guidelines and governmental unit or publicly supported Word recordkeeping requirements for organization) whose total gifts for 2001 Processing, determining whether private schools that through 2004 exceeded the amount Inc. $25,000 $2,000 $5,000 $20,000 are recognized as exempt from tax have shown in line 26a. (Do not file this list with racially nondiscriminatory policies toward your return.) Enter the total of all these Enter the total for column (e) on line their students. excess amounts on line 26b. An example of such a list for line 26b is given below. 27b for the year (2004) entry space.. $20, Organizational requirements. A school must include a statement in its Line 27a. Contributions, Membership charter, bylaws, or other governing Fees, and Gross Receipts From Line 28. Unusual Grants. Unusual instrument, or in a resolution of its Disqualified Persons. For amounts grants generally are substantial governing body, that it has a racially included in lines 15, 16, and 17 that were contributions and bequests from nondiscriminatory policy as to students received from a disqualified person, disinterested persons and are: and therefore does not discriminate prepare a list for your records to show the 1. Attracted because of the against applicants and students on the name of, and total amounts received in organization s publicly supported nature, basis of race, color, and national or ethnic each year from each disqualified person. 2. Unusual and unexpected because origin. (Do not file this list with your return.) Enter the sum of such amounts for each year. of the amount, and 4.02 Statement of policy. Every An example of such a list for line 27a is 3. Large enough to endanger the school must include a statement of its given below. organization s status as normally meeting racially nondiscriminatory policy as to the support test described in the students in all its brochures and Line 27a Example catalogues dealing with student instructions for lines 10, 11, and 12. admissions, programs, and scholarships. (a) (b) (c) (d) (e) (f) A statement substantially similar to the Name Total A grant that meets these terms may be Notice described in paragraph (a) of treated as an unusual grant (that is subsection 1 of section 4.03, infra, will be disregarded entirely in the public support David $7,000 $6,000 $13,000 acceptable for this purpose. Further, Smith computation) even if the organization every school must include a reference to receives the funds over a period of years. its racially nondiscriminatory policy in In the list of unusual grants, show only other written advertising that it uses as a Anne $5,000 $7,000 $12,000 what the organization received during the means of informing prospective students Parker year. of its programs. The following references will be acceptable: Total $7,000 $6,000 $5,000 $7,000 $25,000 Do not treat gross investment income The (name) school admits students of items as unusual grants. Instead, include Enter the total for each year of columns (b) any race, color, and national or ethnic all investment income in support. through (e) on line 27a, 2005 Schedule A (Form origin. 990 or 990-EZ). See Rev. Rul , C.B Publicity. The school must make Enter the total of column (f) on the line 27a and Regulations sections its racially nondiscriminatory policy known entry space for line 27d, 2005 Schedule A 1.170A-9(e)(6)(ii) and 1.509(a)-3(c)(3) to all segments of the general community (Form 990 or 990-EZ). and (4) for details about unusual grants. served by the school. 1. The school must use one of the Line 27b. Gross Receipts From Other For an organization described in lines following two methods to satisfy this Than Disqualified Persons. For any 10, 11, or 12 that received any unusual requirement: amount included in line 17 that was grants during 2001 through 2004, prepare (a) The school may publish a notice of received from each person (other than a list for your records to show, for each its racially nondiscriminatory policy in a disqualified persons) prepare a list for year, the name of the contributor, the date newspaper of general circulation that your records to show the name of, and and amount of the grant, and a brief serves all racial segments of the amount received for each year, that was description of the grant. (Do not file this community. This publication must be more than the larger of: list with your return.) Do not include these repeated at least once annually during the 1. The amount on line 25 for grants in line 15. An example for such a period of the school s solicitation for the year, or list for line 28 is given below. students or, in the absence of a Instructions for Schedule A (Form 990 or 990-EZ) -7-

8 solicitation program, during the school s 2. The requirements of subsection 1 of school. The Service recognizes that the registration period. Where more than one this section will not apply when one of the failure by a school drawing its students community is served by a school, the following paragraphs applies: from local communities to enroll racial school may publish its notice in those (a) If for the preceding 3 years the minority group students may not newspapers that are reasonably likely to enrollment of a parochial or other necessarily indicate the absence of a be read by all racial segments of the church-related school consists of students racially nondiscriminatory policy as to communities that it serves. The notice at least 75% of whom are members of the students when there are relatively few or must appear in a section of the sponsoring religious denomination or unit, no such students in these communities. newspaper likely to be read by the school may make known its racially Actual enrollment is, however, a prospective students and their families nondiscriminatory policy in whatever meaningful indication of a racially and it must occupy at least three column newspapers or circulars the religious nondiscriminatory policy in a community inches. It must be captioned in at least 12 denomination or unit utilizes in the in which a public school or schools point boldface type as a notice of communities from which the students are became subject to a desegregation order nondiscriminatory policy as to students, drawn. These newspapers and circulars of a Federal court or otherwise expressly and its text must be printed in at least 8 may be those distributed by a particular became obligated to implement a point type. The following notice will be religious denomination or unit or by an desegregation plan under the terms of acceptable: association that represents a number of any written contract or other commitment religious organizations of the same to which any Federal agency was a party. denomination. If, however, the school The Service encourages schools to Notice Of Nondiscriminatory Policy advertises in newspapers of general satisfy the publicity requirement by the As To Students circulation in the community or methods described in subsection 1 of this communities from which its students are section, regardless of whether a school The (name) school admits drawn and paragraphs (b) and (c) of this considers itself within subsection 2, students of any race, color, subsection are not applicable to it, then it because it believes these methods to be national and ethnic origin to all must comply with paragraph (a) of the most effective to make known a the rights, privileges, programs, subsection 1 of this section. school s racially nondiscriminatory policy. and activities generally accorded (b) If a school customarily draws a In this regard it is each school s or made available to students at substantial percentage of its students responsibility to determine whether the school. It does not nationwide or worldwide or from a large paragraph (a), (b), or (c) of subsection 2 discriminate on the basis of race, geographic section or sections of the applies to it. On audit, a school must be color, national and ethnic origin in United States and follows a racially prepared to demonstrate that the failure administration of its educational nondiscriminatory policy as to students, to publish its racially nondiscriminatory policies, admissions policies, the publicity requirement may be satisfied policy in accordance with subsection 1 of scholarship and loan programs, by complying with section 4.02, supra. this section was justified by the and athletic and other Such a school may demonstrate that it application to it of paragraph (a), (b), or school-administered programs. follows a racially nondiscriminatory policy (c) of subsection 2. Further, a school within the meaning of the preceding must be prepared to demonstrate that it sentence either by showing that it has publicly disavowed or repudiated any currently enrolls students of racial statements purported to have been made (b) The school may use the broadcast minority groups in meaningful numbers on its behalf (after November 6, 1975) media to publicize its racially or, when minority students are not that are contrary to its publicity of a nondiscriminatory policy if this use makes enrolled in meaningful numbers, that its racially nondiscriminatory policy as to such nondiscriminatory policy known to all promotional activities and recruiting students, to the extent that the school or segments of the general community the efforts in each geographic area were its principal official were aware of such school serves. If this method is chosen, reasonably designed to inform students of statements. the school must provide documentation that the means by which this policy was all racial segments in the general 4.04 Facilities and programs. A communicated to all segments of the communities within the area of the school must be able to show that all of its general community was reasonably availability of the school. The question programs and facilities are operated in a expected to be effective. In this case, whether a school satisfies the preceding racially nondiscriminatory manner. appropriate documentation would include sentence will be determined on the basis 4.05 Scholarship and loan copies of the tapes or script used and of the facts and circumstances of each programs. As a general rule, all records showing that there was an case. scholarship or other comparable benefits adequate number of announcements, that (c) If a school customarily draws its procurable for use at any given school they were made during hours when the students from local communities and must be offered on a racially announcements were likely to be follows a racially nondiscriminatory policy nondiscriminatory basis. Their availability communicated to all segments of the as to students, the publicity requirement on this basis must be known throughout general community, that they were of may be satisfied by complying with the general community being served by sufficient duration to convey the message section 4.02, supra. Such a school may the school and should be referred to in clearly, and that they were broadcast on demonstrate that it follows a racially the publicity required by this section in radio or television stations likely to be nondiscriminatory policy within the order for that school to be considered listened to by substantial numbers of meaning of the preceding sentence by racially nondiscriminatory as to students.. members of all racial segments of the showing that it currently enrolls students.. [S]cholarships and loans that are made general community. Announcements of racial minority groups in meaningful pursuant to financial assistance programs must be made during the period of the numbers. The question whether a school favoring members of one or more racial school s solicitation for students or, in the satisfies the preceding sentence will be minority groups that are designed to absence of a solicitation program, during determined on the basis of the facts and promote a school s racially the school s registration period. circumstances of each case. One of the nondiscriminatory policy will not adversely facts and circumstances that the Service affect the school s exempt status. Communication of a racially will consider is whether the school s Financial assistance programs favoring nondiscriminatory policy as to students by promotional activities and recruiting members of one or more racial groups a school to leaders of racial groups as the efforts in each area were reasonably that do not significantly derogate from the sole means of publicity generally will not designed to inform students of all racial school s racially nondiscriminatory policy be considered effective to make the policy segments in the general communities similarly will not adversely affect the known to all segments of the community. within the area of the availability of the school s exempt status. -8- Instructions for Schedule A (Form 990 or 990-EZ)