| Title: |
Form 990: A Practical Guide |
| Prerequisite: |
None |
| Advance Preparation: |
None |
| Knowledge Level: |
Basic |
| Subject Matter Area: |
Taxes |
| Date of Publication: |
January 2010 |
| Copyright © |
2010 by Bisk Education, Inc. All rights reserved. |
| Recommended CPE Credits: |
9 QAS/Registry (50-minute hour) |
| Expiration Date: |
One year from date of receipt to complete program and submit quizzer to obtain credit |
| Passing Grade for Quizzer: |
70 percent or higher |
Tax-exempt organizations (TEOs) have federal tax and legal rules largely different from those that apply to for-profit organizations. These rules can be complex and somewhat esoteric. From a federal tax perspective, charities are divided into two major classes: public charities and private foundations (PFs). Each class has its own special tax rules, governance provisions, and tax reporting obligations. Generally, when reference is made to TEOs in these materials, it will be to public charities rather than PFs, unless specific mention is made of PFs.
The tax reporting rules relating to TEOs are complicated by unique governance rules relating to how charities are organized, conduct their activities, and interact with major donors and others with substantial influence over the organization. Because governance issues are so important, Congress has mandated that charities are the only tax reporting organization that must publicly disclose their Form 990.
Most information TEOs provide on Form 990 pertains to organizational governance and organizational compliance with various statutory requirements relating to how the organization and its founders, contributors, and board members deal with one another. As such, Form 990 is unlike other tax returns in that it does not focus on the calculation of the entity's taxable income. Form 990 does not even contain space for calculating the organization's tax liability when it has one. (This is calculated on a separate form—Form 990-T.) Although TEOs can have an income tax liability, relatively few TEOs actually incur an income tax liability.
Use of Materials
Audio or DVD
The user should begin by watching the DVD segment or listening to the audio CD for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. It may be helpful to highlight important material and/or to make additional notes. Next, the user should complete the study questions at the end of the chapter and review the answers. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the DVD or listening to the audio CDs and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or DVD or audio CDs that were difficult. When the user is ready, s/he should complete the quizzer. Reviewing notes periodically will increase retention of the material.
Online
The user should begin by watching the streamed video segment, if any, or listening to the streamed audio segment, if any, for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. After the user has studied each chapter, s/he should click on the link at the left to complete the interactive study questions. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the streamed video, if any, or listening to the streamed audio, if any, and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or video/audio, if any, that were difficult. When the user is ready, s/he should click on the link to the left to complete the quizzer. The user's CPE certificate will be provided immediately upon successful completion of the quizzer.
Software
The user should begin by reviewing the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. As the user studies each chapter, s/he should complete the interactive study questions that appear in the lower panel of the screen. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text that were difficult. When the user is ready, s/he should click on the link at the far left to complete the quizzer. The user should email her/his quizzer statistics using the quizzer submission link in the software and the user's CPE certificate will be mailed to her/him.
This program is divided into five (5) chapters and an appendix.
Chapter 1 explains how organizations attain tax-exempt status and provides detail on the steps necessary to prepare Form 1023.
Chapter 2 discusses unrelated business taxable income. It delves into the proper tax treatment of UBTI and lists deductions available to offset UBTI.
Chapter 3 examines the items that appear on Form 990, explaining many of the lines that are displayed on the form.
Chapter 4 focuses on the various schedules that accompany the Form 990.
Chapter 5 explores Form 990-T and the circumstances that require charities to file this form.
The Appendix explains how to obtain forms and schedules that may be used for the 2009 tax year.
Helpful Guidance
Throughout this program, the user will find explanations and discussions regarding some of the issues that often face practitioners. In order to enhance the user's comprehension of the material and highlight important practical considerations, this program includes the following designation:
A Biskpoint presents analysis or commentary that attempts to explain or clarify statutory or regulatory authority or decision by the judiciary.
Michael J. Tucker, LLM, CPA, is a consultant with the accounting firm of T.M. Byxbee Company, P.C., in Hamden, Connecticut. In his practice, Mr. Tucker handles a wide variety of client transactions, including mergers and acquisitions, entity formations and dissolutions, and distributions to owners/shareholders/partners. He is also a Professor of Accounting at Quinnipiac University in Hamden, Connecticut. Author of over 100 articles and books dealing with various tax topics, Mr. Tucker is a frequent lecturer at conferences and seminars throughout the country. Recently, Mr. Tucker has expanded his practice and lecturing to include topics related to the workplace, including sexual harassment and employer/employee relations. He holds an LLM in Taxation from Georgetown University Law Center, a Juris Doctorate from New York University School of Law, a PhD in Accounting from University of Houston, and an MBA from New York University. (Author/Speaker)
Ian J. Redpath, JD, LLM, is a nationally recognized tax attorney and consultant from Buffalo, New York. He is a principal in the Redpath Law Offices in Buffalo and New York City where he specializes in tax litigation matters. Mr. Redpath has published numerous articles on contemporary tax issues and co-authored several books. He has extensive national and international experience in developing, writing, and presenting professional CPE programs. Mr. Redpath holds a Bachelor's degree from Hillsdale College, a JD from the University of Detroit, and an LLM (tax emphasis) from the University of Wisconsin. In addition to his active tax practice, he serves as an Associate Professor of Taxation at Canisius College in Buffalo. (Author/Speaker)