If the organization does not meet any of the exceptions listed in General Instruction B, and its annual gross receipts are normally more than $25,000, it must file Form 990 or Form 990-EZ. See the gross receipts discussion in General Instruction B.

If the organization's gross receipts during the year are less than $100,000 and its total assets at the end of the year are less than $250,000, it may file Form 990-EZ instead of Form 990. Even if the organization meets this test, it can still file Form 990.

Organizations required to file Schedule A (Form 990 or 990-EZ), Organization Exempt Under Section 501(c)(3), that do not meet the support tests discussed in the instructions for Part IV of that schedule should contact the Service at the following address to re-evaluate their determination-of-filing requirements.

Except for those types of organizations listed in General Instruction B, an annual return on Form 990, or Form 990-EZ, is required from every organization exempt from tax under section 501(a), including foreign organizations and cooperative service organizations described in sections 501(e) and (f); child care organizations described in section 501(k); and charitable risk pools described in section 501(n).

Section 501(c)(3), 501(e), (f), (k), and (n) organizations must also attach a completed Schedule A (Form 990 or 990-EZ) to their Form 990 or Form 990-EZ.

For purposes of these instructions, the term “section 501(c)(3)” includes organizations exempt under sections 501(e), (f), (k), and (n).

In general, tax-exempt political organizations that have gross receipts of $25,000 or more for the tax year must file Form 990 or Form 990-EZ. However, see General Instruction B for a list of tax-exempt political organizations that are excepted from filing Form 990 or Form 990-EZ. A qualified state or local political organization (defined below) must file Form 990 (not Form 990-EZ) only if it has gross receipts of $100,000 or more.

A qualified state or local political organization is a political organization that meets all of the following requirements:

For additional information, including the prohibition of involvement in the organization of a Federal candidate or office holder, see section 527(e)(5).

A disregarded entity, as described in Regulations sections 301.7701-1 through 301.7701-3, is treated as a branch or division of its parent organization for Federal tax purposes. Therefore, financial and other information applicable to a disregarded entity must be reported as the parent organization's information.

Any nonexempt charitable trust (described in section 4947(a)(1)) not treated as a private foundation is also required to file Form 990, or Form 990-EZ, along with a completed Schedule A (Form 990 or 990-EZ). See the discussion in General Instruction D for exceptions to filing Form 1041, U.S. Income Tax Return for Estates and Trusts.

If the organization's application for exemption is pending, check the “application pending” box in the heading of the return and complete the return.

If the organization received a Form 990 Package with a preaddressed label, we ask that the organization file a return even if it is not required to do so.

Following the above instructions will help us to update our records, and we will not have to contact the organization later to ask why no return was filed.

If the organization files a return this way, it will not be mailed a Form 990 Package in later years and does not have to file Form 990, or Form 990-EZ, again until its gross receipts are normally more than $25,000. If the organization terminates or undergoes a substantial contraction, see the instructions for line 79 of Form 990, or line 36 of Form 990-EZ.

Exempt organizations that filed Form 990, or Form 990-EZ, but are no longer required to file because they meet a specific exemption (other than exemption 15 in General Instruction B) should advise their area office so their filing status can be updated.

Exempt organizations that are not sure of their area office may call the IRS at the Phone Help line, 1-877-829-5500. Exempt organizations that stop filing Form 990, or Form 990-EZ, without notifying their area office may receive service center correspondence inquiring about their returns. When responding to these inquiries, these organizations should give the specific reason for not filing.

Organizations that are eligible to receive tax deductible contributions are listed in Publication 78, Cumulative List of Organizations described in Section 170(c) of the Internal Revenue Code of 1986. An organization may be removed from this listing if our records show that it is required to file Form 990, or Form 990-EZ, but it does not file a return or advise us that it is no longer required to file. However, contributions to such an organization may continue to be deductible by the general public until the IRS publishes a notice to the contrary in the Internal Revenue Bulletin.

You should consult the appropriate officials of all states and other jurisdictions in which the organization does business to determine their specific filing requirements. “Doing business” in a jurisdiction may include any of the following: (a) soliciting contributions or grants by mail or otherwise from individuals, businesses, or other charitable organizations; (b) conducting programs; (c) having employees within that jurisdiction; (d) maintaining a checking account; or (e) owning or renting property there.

Some or all of the dollar limitations applicable to Form 990, or Form 990-EZ, when filed with the IRS may not apply when using Form 990, or Form 990-EZ, in place of state or local report forms. Examples of the IRS dollar limitations that do not meet some state requirements are the $25,000 gross receipts minimum that creates an obligation to file with the IRS (see the gross receipts discussion in General Instruction B) and the $50,000 minimum for listing professional fees in Part II of Schedule A (Form 990 or 990-EZ).

State or local filing requirements may require you to attach to Form 990, or Form 990-EZ, one or more of the following: (a) additional financial statements, such as a complete analysis of functional expenses or a statement of changes in net assets; (b) notes to financial statements; (c) additional financial schedules; (d) a report on the financial statements by an independent accountant; and (e) answers to additional questions and other information. Each jurisdiction may require the additional material to be presented on forms they provide. The additional information does not have to be submitted with the Form 990, or Form 990-EZ, filed with the IRS.

Even if the Form 990, or Form 990-EZ, that the organization files with the IRS is accepted by the IRS as complete, a copy of the same return filed with a state will not fully satisfy that state's filing requirement if required information is not provided, including any of the additional information discussed above, or if the state determines that the form was not completed by following the applicable Form 990, or Form 990-EZ, instructions or supplemental state instructions. If so, the organization may be asked to provide the missing information or to submit an amended return.

To ensure that all organizations report similar transactions uniformly, many states require that contributions, gifts, grants, etc., and functional expenses be reported according to the AICPA industry audit and accounting guide, Not-for-Profit Organizations (New York, NY, AICPA, 2003), supplemented by Standards of Accounting and Financial Reporting for Voluntary Health and Welfare Organizations (Washington, DC, National Health Council, Inc., 1998, 4th edition).

Even though reporting donated services and facilities as items of revenue and expense is called for in certain circumstances by the two publications named above, many states and the IRS do not permit the inclusion of those amounts in Parts I and II of Form 990 or Part I of Form 990-EZ. The optional reporting of donated services and facilities is discussed in the instructions for Part III for both Form 990 and Form 990-EZ.

If the organization submits supplemental information or files an amended Form 990, or Form 990-EZ, with the IRS, it must also send a copy of the information or amended return to any state with which it filed a copy of Form 990, or Form 990-EZ, originally to meet that state's filing requirement.

If a state requires the organization to file an amended Form 990, or Form 990-EZ, to correct conflicts with Form 990, or Form 990-EZ, instructions, it must also file an amended return with the IRS.

Most states require that all amounts be reported based on the accrual method of accounting. See also General Instruction G.

The deadline for filing Form 990, or Form 990-EZ, with the IRS differs from the time for filing reports with some states.

The Form 990, or Form 990-EZ, information made available for public inspection by the IRS may differ from that made available by the states. See the discussion for the required schedule of contributors (Schedule B (Form 990, 990-EZ, or 990-PF)) in General
Instruction L.

A labor organization that files Form LM-2, Labor Organization Annual Report, or the shorter Form LM-3, Labor Organization Annual Report, with the U.S. Department of Labor (DOL) can attach a copy of the completed DOL form to Form 990, or Form 990-EZ, to provide some of the information required by Form 990 or Form 990-EZ. This substitution is not permitted if the organization files a DOL report that consolidates its financial statements with those of one or more separate subsidiary organizations.

An employee benefit plan may be able to substitute Form 5500 for part of Form 990 or Form 990-EZ. The substitution can be made if the organization filing Form 990, or Form 990-EZ, and the plan filing Form 5500, meet all the following tests:

Whether an organization files Form 990, or Form 990-EZ, for a labor organization or for an employee benefit plan, the areas of Form 990, or Form 990-EZ, for which other forms can be substituted are the same. These areas are:

If an organization substitutes Form LM-2 or LM-3 for any of the Form 990, or Form 990-EZ, Parts or line items mentioned above, it must attach a reconciliation sheet to show the relationship between the amounts on the DOL forms and the amounts on Form 990 or Form 990-EZ. This is particularly true of the relationship of disbursements shown on the DOL forms and the total expenses on line 17, Part I, of both Form 990 and Form 990-EZ. The organization must make this reconciliation because the cash disbursements section of the DOL forms includes nonexpense items. If the organization substitutes Form LM-2, be sure to complete its separate schedule of expenses.

Unless instructed otherwise, the organization should generally use the same accounting method on the return to figure revenue and expenses as it regularly uses to keep its books and records. To be acceptable for Form 990, or Form 990-EZ, reporting purposes, however, the method of accounting used must clearly reflect income.

Generally, the organization must file Form 3115 to change its accounting method. Notice 96-30, 1996-1 C.B. 378, provides relief from filing Form 3115 to section 501(c) organizations that change their methods of accounting to comply with the provisions of SFAS 116, Accounting for Contributions Received and Contributions Made. In SFAS 116, the Financial Accounting Standards Board revised certain generally accepted accounting principles relating to contributions received and contributions awarded by not-for-profit organizations.

A not-for-profit organization that changes its method of accounting for Federal income tax purposes to conform to the method provided in SFAS 116 should report any adjustment required by section 481(a) on line 20 of Form 990, or Form 990-EZ, as a net asset adjustment made during the year the change is made. The adjustment should be identified as the effect of changing to the method provided in SFAS 116. The beginning of year statement of financial position (balance sheet) should not be restated to reflect any prior period adjustments.

Under section 6652(c)(1)(A), a penalty of $20 a day, not to exceed the smaller of $10,000 or 5% of the gross receipts of the organization for the year, may be charged when a return is filed late, unless the organization can show that the late filing was due to reasonable cause. Organizations with annual gross receipts exceeding $1 million are subject to a penalty of $100 for each day the failure continues (with a maximum penalty with respect to any one return of $50,000). The penalty begins on the due date for filing the Form 990 or Form 990-EZ.

The penalty may also be charged if the organization files an incomplete return. To avoid having to supply missing information later, be sure to complete all applicable line items; answer “Yes,” “No,” or “N/A” (not applicable) to each question on the return; make an entry (including a zero when appropriate) on all total lines; and enter “None” or “N/A” if an entire part does not apply.

Also, this penalty may be imposed if the organization's return contains incorrect information. For example, an organization that reports contributions net of related fundraising expenses may be subject to this penalty.

Use of a paid preparer does not relieve the organization of its responsibility to file a complete and accurate return.

If the organization does not file a complete return or does not furnish correct information, the IRS will send the organization a letter that includes a fixed time to fulfill these requirements. After that period expires, the person failing to comply will be charged a penalty of $10 a day. The maximum penalty on all persons for failures with respect to any one return shall not exceed $5,000 (section 6652(c)(1)(B)(ii)).

Any person who does not comply with the public inspection requirements, as discussed in General Instruction M, will be assessed a penalty of $20 for each day that inspection was not permitted, up to a maximum of $10,000 for each return. The penalties for failure to comply with the public inspection requirements for applications is the same as those for annual returns, except that the $10,000 limitation does not apply (sections 6652(c)(1)(C) and (D)). Any person who willfully fails to comply with the public inspection requirements for annual returns or exemption applications will be subject to an additional penalty of $5,000 (section 6685).

There are also penalties—fines and imprisonment—for willfully not filing returns and for filing fraudulent returns and statements with the IRS (sections 7203, 7206, and 7207). States may impose additional penalties for failure to meet their separate filing requirements. See also the discussion of the Trust Fund Recovery Penalty, General Instruction D.

Schedule B (Form 990, 990-EZ, or 990-PF) is a required attachment for the Form 990, 990-EZ, or 990-PF, and is used to report on tax-deductible and non-tax-deductible contributions. See the instructions for Schedule B for the public inspection rules applicable to that form. See also the Specific Instructions for both Form 990 and Form 990-EZ, under Completing the Heading . . .where the instructions are keyed to items in the heading of Form 990 or Form 990-EZ.

Any fundraising solicitation by or on behalf of any section 501(c) or 527 organization that is not eligible to receive contributions deductible as charitable contributions for Federal income tax purposes must include an explicit statement that contributions or gifts to it are not deductible as charitable contributions. The statement must be in an easily recognizable format whether the solicitation is made in written or printed form, by television or radio, or by telephone. This provision applies only to those organizations whose annual gross receipts are normally more than $100,000 (section 6113 and Notice 88-120, 1988-2 C.B. 454).

Failure to disclose that contributions are not deductible could result in a penalty of $1,000 for each day on which a failure occurs. The maximum penalty for failures by any organization, during any calendar year, shall not exceed $10,000. In cases where the failure to make the disclosure is due to intentional disregard of the law, more severe penalties apply. No penalty will be imposed if the failure is due to reasonable cause (section 6710).

Section 501(c) organizations that are eligible to receive tax-deductible contributions under section 170(c) of the Code must keep sample copies of their fundraising materials, such as:

For each fundraising event, organizations must keep records to show that portion of any payment received from patrons that is not deductible; that is, the retail value of the goods or services received by the patrons. See “Disclosure statement for quid pro quo contributions” below.

See the instructions for Schedule B (Form 990, 990-EZ, or 990-PF).

If the organization received a partially completed Form 8283 from a donor, complete it and return it so the donor can get a charitable contribution deduction. Keep a copy for your records. See also the reference to Form 8282 in General Instruction D.

Use Form 4506-A to request:

The IRS can provide copies of exempt organization returns on a compact disk (CD-ROM). Requesters can order the complete set (all Forms 990 and 990-EZ or all Forms 990-PF filed for a year) or a partial set by state or by month. For more information on the cost and how to order CD-ROMs, call the toll-free Phone-Help number (1-877-829-5500) or write to the IRS in Cincinnati, OH at the address in General Instruction A.

The IRS may not disclose portions of an exemption application relating to any trade secrets, etc. See the instructions for Schedule B (Form 990, 990-EZ, or 990-PF) that discuss the disclosure of that schedule.

You can only request Forms 990 or 990-EZ for section 527 organizations for tax years beginning after June 30, 2000.

You may inspect a return, report, notice, or exemption application at an IRS office free of charge. You may also obtain a copy of these items through the organization as discussed in the following section.

These rules only apply to certain "applicable" section 501(c)(3) and 501(c)(4) organizations. An applicable tax-exempt organization is a section 501(c)(3) or a section 501(c)(4) organization that is tax-exempt under section 501(a), or was such an organization at any time during a 5-year period ending on the day of the excess benefit transaction.

An applicable tax-exempt organization does not include:

An organization is not treated as a section 501(c)(3) or 501(c)(4) organization for any period covered by a final determination that the organization was not tax-exempt under section 501(a), but only if the determination was not based on private inurement or one or more excess benefit transactions.

The vast majority of section 501(c)(3) or 501(c)(4) organization employees and contractors will not be affected by these rules. Only the few influential persons within these organizations are covered by these rules when they receive benefits, such as compensation, fringe benefits, or contract payments. The IRS calls this class of covered individuals "disqualified persons." A disqualified person, regarding any transaction, is any person who was in a position to exercise substantial influence over the affairs of the applicable tax-exempt organization at any time during a 5-year period ending on the date of the transaction. Persons who hold certain powers, responsibilities, or interests are among those who are in a position to exercise substantial influence over the affairs of the organization. This would include, for example, voting members of the governing body, and persons holding the power of:

A disqualified person also includes certain family members of a disqualified person, and 35% controlled entities of a disqualified person.

An excess benefit transaction is a transaction in which an economic benefit is provided by an applicable tax-exempt organization, directly or indirectly, to or for the use of any disqualified person, and the value of the economic benefit provided by the organization exceeds the value of the consideration (including the performance of services) received for providing such benefit.

To determine whether an excess benefit transaction has occurred, all consideration and benefits exchanged between a disqualified person and the applicable tax-exempt organization, and all entities it controls, are taken into account. For purposes of determining the value of economic benefits, the value of property, including the right to use property, is the fair market value. Fair market value is the price at which property, or the right to use property, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy, sell or transfer property or the right to use property, and both having reasonable knowledge of relevant facts.

An excess benefit can occur in an exchange of compensation and other compensatory benefits in return for the services of a disqualified person, or in an exchange of property between a disqualified person and the exempt organization.

Payments under a compensation arrangement are presumed to be reasonable and the transfer of property (or right to use property) is presumed to be at fair market value, if the following three conditions are met.

A disqualified person corrects an excess benefit transaction by undoing the excess benefit to the extent possible, and by taking any additional measures necessary to place the organization in a financial position not worse than that in which it would be if the disqualified person were dealing under the highest fiduciary standards. The organization is not required to rescind the underlying agreement; however, the parties may need to modify an ongoing contract with respect to future payments.

A disqualified person corrects an excess benefit by making a payment in cash or cash equivalents equal to the correction amount to the applicable tax-exempt organization. The correction amount equals the excess benefit plus the interest on the excess benefit; the interest rate may be no lower than the applicable Federal rate. There is an anti-abuse rule to prevent the disqualified person from effectively transferring property other than cash or cash equivalents.

The regulations make it clear that the IRS will apply the procedures of section 7611 when initiating and conducting any inquiry or examination into whether an excess benefit transaction has occurred between a church and a disqualified person.

Proposed intermediate sanction regulations were issued in 1998. The proposed regulations had special provisions covering "any transaction in which the amount of any economic benefit provided to or for the use of a disqualified person is determined in whole or in part by the revenues of one or more activities of the organization. . ."—so-called "revenue-sharing transactions." Rather than setting forth additional rules on revenue-sharing transactions, the final regulations reserve this section. Consequently, until the Service issues new regulations for this reserved section on revenue-sharing transactions, these transactions will be evaluated under the general rules (i.e., the fair market value standards) that apply to all contractual arrangements between applicable tax-exempt organizations and their disqualified persons.

Section 4958 does not affect the substantive standards for tax exemption under section 501(c)(3) or section 501(c)(4), including the requirements that the organization be organized and operated exclusively for exempt purposes, and that no part of its net earnings inure to the benefit of any private shareholder or individual. The legislative history indicates that in most instances, the imposition of this intermediate sanction will be in lieu of revocation. IRS has indicated that the following four factors will be considered in determining whether to revoke an applicable tax-exempt organization's exemption status where an excess benefit transaction has occurred:

Use the 2003 Form 990 to report on a calendar year accounting period beginning January 1, 2003, and ending December 31, 2003.

Use the 2003 Form 990 also to report on an accounting period other than a calendar year (either a fiscal year that began in 2003 or a short period (less than 12 months) that began in 2003). You must show the month and day in 2003 that your fiscal year began, or the short period began. You must also show the day, month, and year your fiscal year, or short period, ended. See General Instruction G.

If we mailed the organization a Form 990 Package with a preaddressed mailing label, please attach the label in the name and address space on the return. Using the label helps us avoid errors in processing the return. If any information on the label is wrong, draw a line through that part and correct it.

If the organization operates under a name different from its legal name, give the legal name of the organization but identify its alternate name, after the legal name, by writing "aka" (also known as) and the alternate name of the organization. However, if the organization has changed its name, follow the instructions for Name change in Item B—Checkboxes.

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

For foreign addresses, enter information in the following order: City, province or state, and the name of the country. Follow the foreign country's practice in placing the postal code in the address. Please do not abbreviate the country name.

If a change in address occurs after the return is filed, use Form 8822 to notify the IRS of the new address.

The organization should have only one Federal employer identification number (EIN). If it has more than one and has not been advised which to use, notify the Internal Revenue Service Center, Ogden, UT 84201-0027. State what numbers the organization has, the name and address to which each number was assigned, and the address of its principal office. The IRS will advise the organization which number to use.

Enter a telephone number of the organization that members of the public and government regulators may use during normal business hours to obtain information about the organization's finances and activities. If the organization does not have a telephone number, enter the telephone number of an organization official who can provide such information.

An organization must indicate the method of accounting used in preparing this return. See General Instruction G.

Show the organization's website address if a website is available. Otherwise, write "N/A" (not applicable). Consider adding your email address to your website.

See General Instruction R. Attach the required list, if applicable, or you will be contacted later for the missing information.

The group exemption number (GEN) is a number assigned by the IRS to the central/parent organization of a group that has a group ruling.

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

If the organization is exempt under section 501(c), check the applicable box and insert, within the parentheses, the number that identifies the type of section 501(c) organization the filer is. See the chart in General Instruction C. The term “section 501(c)(3)” includes organizations exempt under sections 501(e), (f), (k), and (n). Check the applicable box if the organization is a section 527 political organization. See General Instruction U.

If the organization is a section 4947(a)(1) nonexempt charitable trust, check the applicable box. Note also the discussion regarding Schedule A (Form 990 or 990-EZ) and Form 1041 in General Instruction D and the instructions to line 92 of Form 990.

Check this box if the organization's gross receipts are normally not more than $25,000. However, see General Instruction A, if you received a Form 990 Package, and note the discussion on gross receipts in General Instruction B.

The organization's gross receipts are the total amount it received from all sources during its annual accounting period, without subtracting any costs or expenses. See the gross receipts discussion in General Instruction B.

Whether or not the organization enters any amount on line 1d of Form 990, the organization must either check the box in item M or attach Schedule B (Form 990, 990-EZ, or 990-PF). Your return will be incomplete if you do not either check the box in item M or file Schedule B (Form 990, 990-EZ, or 990-PF). See the instructions for Schedule B (Form 990, 990-EZ, or 990-PF), Schedule of Contributors, for more information.

Reporting for line 1, in accordance with SFAS 116, is acceptable for Form 990 purposes, but not required by IRS. However, see General Instruction E.

An organization that receives a grant to be paid in future years should, according to SFAS 116, report the grant's present value on line 1. Accruals of present value increments to the unpaid grant should also be reported on line 1 in future years.

Fundraising activities relate to soliciting and receiving contributions. However, special fundraising activities such as dinners, door-to-door sales of merchandise, carnivals, and bingo games can produce both contributions and revenue.

If a buyer at such a “special event,” pays more for goods or services than their retail value, report, as a contribution, both on line 1a and on line 9a (within the parentheses), any amount paid in excess of the retail value. This situation usually occurs when organizations seek public support through solicitation programs that are in part special events or activities and are in part solicitations for contributions. The primary purpose of such solicitations is to receive contributions and not to sell the merchandise at its retail value even though this might produce a profit.

If a contributor gives more than $40, that person would be making a larger contribution, the difference between the book's retail value of $16 and the amount actually given. Rev. Rul. 67-246, 1967-2 C.B. 104, explains this principle in detail. See also the line 9 instructions and Pub. 526.

Report the expenses that relate directly to the sale of the book on line 9b. Report the expenses of raising contributions (shown within the parentheses on line 9a and again on line 1a) in Fundraising, column (D), Part II, and on line 15 of Part I.

If an organization offers goods or services of only nominal value through a special event or distributes free, unordered, low-cost items to patrons, report the entire amount received for such benefits as a contribution on line 1a (direct public support). Report all related expenses in Fundraising, column (D), Part II. See General Instruction L for a definition of benefits that have a nominal or insubstantial value.

Correctly dividing gross receipts from special events into revenue and contributions is especially important for a section 501(c)(3) organization that claims public support as described in section 509(a)(1)/170(b)(1)(A)(vi) or section 509(a)(2). In the public support computations of these Code sections, the revenue portion of gross receipts may be (a) excluded entirely, (b) treated as public support, or (c) if the revenue represents unrelated trade or business income, treated as nonpublic support.

Section 501(c)(3) organizations must separate gross receipts from special events into revenue and contributions when preparing the Support Schedule in Part IV-A of Schedule A (Form 990 or 990-EZ).

These organizations provide participants with life, sickness, accident, welfare, and unemployment insurance, pensions, or similar benefits, or a combination of these benefits. When such an organization receives payments from participants or their employers to provide these benefits, report the payments on line 2 as program service revenue, rather than on line 1 as contributions.

In Part I, do not include as contributions on line 1 the value of services donated to the organization, or items such as the free use of materials, equipment, or facilities. See the instructions for Part III and for Part VI, line 82, for the optional reporting of such amounts in Parts III and VI.

Any unreimbursed expenses of officers, employees, or volunteers do not belong on the Form 990 or Form 990-EZ. See the instructions for charitable contributions and employee business expenses in Pub. 526 and Pub. 463, respectively.

Grants that encourage an organization receiving the grant to carry on programs or activities that further its exempt purposes are grants that are equivalent to contributions. Report them on line 1. The grantor may require that the programs of the grant recipient (grantee) conform to the grantor's own policies and may specify the use of the grant, such as use for the restoration of a historic building or a voter registration drive.

A grant is still equivalent to a contribution if the grant recipient provides a service or makes a product that benefits the grantor incidentally. See examples in the line 1c instructions. However, a grant is a payment for services, and not a contribution, if the grant requires the grant recipient to provide that grantor with a specific service, facility, or product rather than to give a direct benefit primarily to the general public or to that part of the public served by the organization. In general, do not report as contributions any payments for a service, facility, or product that primarily give some economic or physical benefit to the payer (grantor).

Treat research to develop products for the payer's use or benefit as directly serving the payer. However, generally, basic research or studies in the physical or social sciences should not be treated as serving the payer's needs.

See Regulations section 1.509(a)-3(g) to determine if a grant is a contribution reportable on line 1, or a revenue item reportable elsewhere on Form 990.

Enter the total contributions received indirectly from the public through solicitation campaigns conducted by federated fundraising agencies and similar fundraising organizations (such as a United Way organization and certain sectarian federations). These organizations normally conduct fundraising campaigns within a single metropolitan area or some part of a particular state and allocate part of the net proceeds to each participating organization on the basis of the donors' individual designations and other factors.

Include on line 1b amounts contributed by other organizations closely associated with the reporting organization. This includes contributions received from a parent organization, subordinate, or another organization with the same parent. National organizations that share in fundraising campaigns conducted by their local affiliates should report the amount they receive on line 1b.

The general line 1 instructions, under the heading, Grants that are equivalent to contributions, above apply to this item in particular. A grant or other payment from a governmental unit is treated as a contribution if its primary purpose is to enable the donee to provide a service to, or maintain a facility for, the direct benefit of the public rather than to serve the direct and immediate needs of the 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 that are treated as contributions:

Enter the total of amounts reported on lines 1a through 1c. In the entry spaces in the description column for line 1d, enter the separate totals for cash and noncash contributions, gifts, grants, and similar amounts received. The total of the two amounts must equal the total on line 1d.

Report as cash contributions, etc., only contributions, etc., received in the form of cash, checks, money orders, credit card charges, wire transfers, and other transfers and deposits to a cash account of the organization. If your organization records pledges as contributions, etc., at the time the pledges are made (rather than when the pledges are collected), include as cash contributions, etc., only those pledges actually collected in cash during the year and pledges uncollected at the end of the year that are reasonably expected to be paid in cash in a later year. Report all other contributions, etc., as noncash contributions, etc., in the space provided. Be sure to include as a noncash contribution donated items like cars and clothing valued as of the time of their receipt even if these items were made available for sale immediately after they were received. See General Instruction L and Schedule B (Form 990, 990-EZ, or 990-PF), and lines 1 and 1a for a discussion of noncash contributions. Noncash contributions do not include donated services, which may be reported on line 82 and in the narrative section of Part III.

Enter the total of program service revenue (exempt function income) as reported in Part VII, lines 93(a) through (g), columns (B), (D), and (E). Program services are primarily those that form the basis of an organization's exemption from tax. For a more detailed description of program services, refer to the instructions for Part II, column (B), Program services.

Program service revenue includes income earned by the organization for providing a government agency with a service, facility, or product that benefited that government agency directly rather than benefiting the public as a whole. See the line 1c instructions for reporting guidelines when payments are received from a government agency for providing a service, facility, or product for the primary benefit of the general public.

Program service revenue also includes: tuition received by a school; revenue from admissions to a concert or other performing arts event or to a museum; royalties received as author of an educational publication distributed by a commercial publisher; interest income on loans a credit union makes to its members; payments received by a section 501(c)(9) organization from participants, or employers of participants, for health and welfare benefits coverage; insurance premiums received by a fraternal beneficiary society; and registration fees received in connection with a meeting or convention.

Enter members' and affiliates' dues and assessments that are not contributions.

Enter the amount of interest income from savings and temporary cash investments reportable on line 46. So-called dividends or earnings received from mutual savings banks, money market funds, etc., are actually interest and should be entered on line 4.

Enter the amount of dividend and interest income from equity and debt securities (stocks and bonds) of the type reportable on line 54. Include amounts received from payments on securities loans, as defined in section 512(a)(5). Do not include any capital gains dividends that are reportable on line 8. See the instructions for line 2 for reporting income from program-related investments.

Enter on line 6a the rental income received for the year from investment property reportable on line 55. Do not include on line 6a rental income related to the reporting organization's exempt function (program service). Report such income on line 2. For example, an exempt organization whose exempt purpose is to provide low-rental housing to persons with low income would report that rental income as program service revenue on line 2. Rental income received from an unaffiliated exempt organization is generally considered as unrelated to the reporting organization's exempt purpose and reportable on line 6a. However, note an exception given in the instructions for line 2 when the reporting organization aids an unaffiliated organization with its exempt function.

Only for purposes of completing this return, the reporting organization must report any rental income received from an affiliated exempt organization as program service revenue on line 2.

Enter the expenses paid or incurred for the income reported on line 6a. Include interest related to rental property and depreciation if it is recorded in the organization's books and records. Report in column (B) of Part II (Program services) any rental expenses allocable to rental income reportable as program service revenue on line 2.

Subtract line 6b from line 6a. Show any loss in parentheses.

Enter the amount of investment income not reportable on lines 4 through 6 and describe the type of income in the space provided or in an attachment. The income should be the gross amount derived from investments reportable on line 56. Include, for example, royalty income from mineral interests owned by the organization. However, do not include income from program-related investments. See the instructions for line 2. Also, do not include unrealized gains and losses on investments carried at market value. See the instructions for line 20.

Report, on lines 8a through 8c, all sales of securities in column (A). Use column (B) to report sales of all other types of investments (such as real estate, royalty interests, or partnership interests) and all other noninventory assets (such as program-related investments and fixed assets used by the organization in its related and unrelated activities).

On line 8a, for each column, enter the total gross sales price of all such assets. Total the cost or other basis (less depreciation) and selling expenses and enter the result on line 8b. On line 8c, enter the net gain or loss.

On lines 8a and 8c, also report capital gains dividends, the organization's share of capital gains and losses from a partnership, and capital gains distributions from trusts. Indicate the source on the schedule described below.

Combine the gain and/or loss figures reported on line 8c, columns (A) and (B) and report that total on line 8d. Do not include any unrealized gains or losses on securities carried at market value in the books of account. See the instructions for line 20.

For reporting sales of securities on Form 990, you may use the more convenient average cost basis method to figure the organization's gain or loss. When a security is sold, compare its sales price with the average cost basis of the particular security to determine gain or loss. However, generally, for reporting sales of securities on Form 990-T, do not use the average cost basis to determine gain or loss.

On the appropriate line, enter the gross revenue, expenses, and net income (or loss) from all special events and activities, such as dinners, dances, carnivals, raffles, bingo games, other gaming activities, and door-to-door sales of merchandise.

These activities only incidentally accomplish an exempt purpose. Their sole or primary purpose is to raise funds that are other than contributions to finance the organization's exempt activities. This is done by offering goods or services that have more than a nominal value (compared to the price charged) for a payment that is more than the direct cost of those goods or services.

The gross revenue from gaming activities and other special events must be reported in the right-hand column on line 9a without reduction for cash or noncash prizes, cost of goods sold, compensation, fees, or other expenses. Check the box for gaming if the organization conducted directly, or through a promoter, any amount of gaming during the year.

Gaming includes (but is not limited to): bingo, pull tabs, instant bingo, raffles, scratch-offs, charitable gaming tickets, break-opens, hard cards, banded tickets, jar tickets, pickle cards, Lucky Seven cards, Nevada Club tickets, casino nights, “Las Vegas” nights, and coin-operated gambling devices. Coin-operated gambling devices include slot machines, electronic video slot or line games, video poker, video blackjack, video keno, video bingo, video pull tab games, etc.

Characterizing any required payment as a “donation” or “contribution” on tickets or on advertising or solicitation materials does not affect how such payments should be reported on Form 990 or Form 990-EZ. As discussed in the instructions for line 1, the amount of the contribution is the excess of the amount paid over the retail value of the goods or services received by the payer. See also Pub. 526.

Enter the gross sales (less returns and allowances), cost of goods sold, and gross profit or (loss) from the sale of inventory items. These sales do not include items sold at special events that are reportable on line 9. Sales of inventory items reportable on line 10 are sales of those items the organization makes to sell to others or buys for resale. Sales of investments on which the organization expected to profit by appreciation and sale are not reported here. Report sales of investments on line 8.

On line 10a, report gross sales revenue from sales of inventory items, whether the sales activity is an exempt function of the organization or an unrelated trade or business.

On line 10b, report the cost of goods sold related to the sales of such inventory. The usual items included in cost of goods sold are direct and indirect labor, materials and supplies consumed, freight-in, and a proportion of overhead expenses. Marketing and distribution costs are not included in cost of goods sold but are reported in Part II, column (B), Program services.

Enter the total amount from Part VII, lines 103(a) through (e) (Other revenue), columns (B), (D), and (E). This figure represents the total income from all sources not covered by lines 1 through 10 of Part I. Examples of income includible on line 11 are interest on notes receivable not held as investments or as program-related investments (defined in the line 2 instructions); interest on loans to officers, directors, trustees, key employees, and other employees; and royalties that are not investment income or program service revenue.

This expense classification is used to report certain types of payments to organizations “affiliated with” (closely related to) a reporting agency.

Organizations using only column (A) of Part II should enter the total of line 16 and line 44 of column (A), Part II, on line 17. Other organizations should enter the total of lines 13 through 16. Organizations using Form 5500 or an approved DOL form as a partial substitute for Form 990 should enter the total expense figure from Form 5500, or from the required reconciliation schedule if Form LM-2 or LM-3 is used. See General Instruction F.

Enter the difference between lines 12 and 17. If line 17 is more than line 12, enter the difference in parentheses.

Enter the balance at the beginning of the year as reported in column (A) of line 73 (or from Form 5500 or an approved DOL form if General Instruction F applies). The balance at the beginning of the year for line 19 was the end of the year balance for line 21 and 73 as reported on the organization's prior year return.

Attach a schedule explaining any changes in net assets or fund balances between the beginning and end of the year that are not accounted for by the amount on line 18. Amounts to report here include adjustments of earlier years' activity; unrealized gains and losses on investments carried at market value; and any difference between fair market value and book value of property given as an award or grant. See General Instruction G regarding the reporting of a section 481(a) adjustment to conform to SFAS 116.

Enter the total of lines 18, 19, and 20. This total figure must equal the amount reported for the end of the year in column (B) of line 73.

All organizations must complete column (A) unless they are using an approved DOL form or Form 5500 as a partial substitute for Form 990. See General Instruction F.

These columns are optional for all organizations except section 4947(a)(1) nonexempt charitable trusts and section 501(c)(3) and (4) organizations. Section 4947(a)(1) nonexempt charitable trusts and section 501(c)(3) and (4) organizations must complete columns (B), (C), and (D).

In Part II, the organization's expenses are designated by object classification (e.g., salaries, legal fees, supplies, etc.) and allocated into three functions: program services (column (B)); management and general (column (C)); and fundraising (column (D)). These functions are explained below in the instructions for the columns. Do not include in Part II any expense items you must report on lines 6b, 8b, 9b, 10b, or 16 in Part I.

For reporting to the IRS only, use the organization's normal accounting method to report total expenses in column (A) and to segregate them into functions under columns (B), (C), and (D). However, for state reporting requirements, see General Instructions E and G. If the accounting system does not provide for this type of segregation, a reasonable method of allocation may be used. The amounts reported should be accurate and the method of allocation documented in the organization's records.

Report, in the appropriate column, expenses that are directly attributable to a particular functional category. In general, allocate expenses that relate to more than one functional category. For example, allocate employees' salaries on the basis of each employee's time. For some shared expenses such as occupancy, supplies, and depreciation of office equipment, use an appropriate basis for each kind of cost. However, you should report some other shared expenses in column (C) only. The column instructions below discuss allocating expenses.

For column (A), total each line item of columns (B), (C), and (D) in Part II. Except for expenses you report on lines 6b, 8b, 9b, 10b, or 16 of Part I, you should use column (A) to report all expenses the organization paid or incurred.

Program services are mainly those activities that the reporting organization was created to conduct and which, along with any activities commenced subsequently, form the basis of the organization's current exemption from tax. They may be self-funded or funded out of contributions, accumulated income, investment income, or any other source. Fundraising expenses should not be reported as program related expenses even though one of the functions of the organization is to solicit contributions for other organizations.

Program services can also include the organization's unrelated trade or business activities. For example, publishing a magazine is a program service even though the magazine contains both editorials and articles that further the organization's exempt purpose and advertising, the income from which is taxable as unrelated business income.

If an organization receives a grant to do research, produce an item, or perform a service, either to meet the grantor's specific needs or to benefit the public directly, the costs incurred represent program service expenses. Do not treat these costs as fundraising expenses, even if you report the grant on line 1 as a contribution.

Use column (C) to report the organization's expenses for overall function and management, rather than for its direct conduct of fundraising activities or program services. Overall management usually includes the salaries and expenses of the chief officer of the organization and that officer's staff. If part of their time is spent directly supervising program services and fundraising activities, their salaries and expenses should be allocated among those functions.

Other expenses to report in column (C) include those for meetings of the board of directors or similar group; committee and staff meetings (unless held in connection with specific program services or fundraising activities); general legal services; accounting (including patient accounting and billing); general liability insurance; office management; auditing, personnel, and other centralized services; preparation, publication, and distribution of an annual report; and investment expenses (however, report rental income expenses on line 6b and program-related income expenses in column (B)).

You should report only general expenses in column (C). Do not use this column to report costs of special meetings or other activities that relate to fundraising or specific program services.

Fundraising expenses are the total expenses incurred in soliciting contributions, gifts, grants, etc. Report as fundraising expenses all expenses, including allocable overhead costs, incurred in: (a) publicizing and conducting fundraising campaigns; (b) soliciting bequests and grants from foundations or other organizations, or government grants reportable on line 1c; (c) participating in federated fundraising campaigns; (d) preparing and distributing fundraising manuals, instructions, and other materials; and (e) conducting special events that generate contributions reportable on line 1a, in addition to revenue reportable in the right-hand column on line 9a. However, report any expenses that are directly attributable to revenue shown on line 9a (i.e., the direct expenses incurred in furnishing the goods or services sold) on line 9b.

Colleges, universities, hospitals, and other organizations that accumulate indirect expenses in various cost centers (such as the expenses of operating and maintaining the physical plant) that are reallocated to the program services and other functional areas of the organization in single or multiple steps may find it easier to report these expenses in the following optional manner:

The above is an example of a one-step allocation that shows how to report the allocation in Part II. This reporting method would actually be needed more for multiple step allocations involving two or more cost centers. The total expenses of the first would be allocated to the other functions, including an allocation of part of these expenses to the second cost center. The expenses of the second cost center would then be allocated to other functions and any remaining cost centers to be allocated, and so on. The greater the number of these cost centers that are allocated out, the more difficult it is to preserve the object classification identity of the expenses of each cost center (e.g., salaries, interest, supplies, etc.). Using the reporting method described above avoids this problem.

Enter the amount of awards and grants to individuals and organizations selected by the filing organization. United Way and similar fundraising organizations should include allocations to member agencies.

Report voluntary awards and grants to affiliated organizations for specific (restricted) purposes or projects also on line 22, but not required payments to affiliates reportable on line 16.

Report scholarship, fellowship, and research grants to individuals on line 22. Certain other payments to, or for the benefit of, individuals may be reportable on line 23 instead. See the instructions for line 23 for details.

Report only the amount of actual grants and awards on line 22. Report expenses incurred in selecting recipients, or monitoring compliance with the terms of a grant or award, on lines 25 through 43.

In the spaces provided, give separate totals for cash and noncash grants and allocations made. Cash grants include only grants and allocations paid by cash, checks, money orders, wire transfers, and other charges against funds on deposit at a financial institution.

Reporting for line 22, in accordance with SFAS 116, is acceptable for Form 990 purposes, but not required by IRS. However, see General Instruction E.

An organization that makes a grant to be paid in future years should, according to SFAS 116, report the grant's present value on line 22. Accruals of present value increments to the unpaid grant should also be reported on line 22 in future years.

Enter the amount of payments to, or for the benefit of, particular clients or patients, including assistance rendered by others at the expense of the filing organization. Do not include grants to other organizations that select the person(s) to receive the assistance available through the use of the grant funds. For example, report a payment to a hospital to cover the medical expenses of a particular individual on line 23, but do not report a contribution to a hospital to provide some service to the general public or to unspecified charity patients on this line. Also, do not include scholarship, fellowship, or research grants to individuals even though selected by the grantor organization. Report these grants on line 22 instead.

For an organization that provides benefits to members or dependents (such as organizations exempt under section 501(c)(8), (9), or (17)), attach a schedule. Show amounts of: (a) death, sickness, hospitalization, or disability benefits; (b) unemployment compensation benefits; and (c) other benefits (state their nature). Do not report the cost of employment-related benefits the organization provides its officers and employees on this line. Report those expenses on lines 27 and 28.

Enter the total compensation paid to officers, directors, trustees, and key employees for the year. In Part V, give the name and compensation (if any) of each officer, director, trustee, and key employee, along with the other information requested. If no compensation was paid, enter zero. See the Part V instructions for a definition of “key employee.”

Form 941 must be filed to report income tax withholding and social security and Medicare taxes. The organization must also file Form 940 to report Federal unemployment taxes unless the organization is not subject to these taxes. See Pub.15 (Circular E) for details. See also the discussion of the Trust Fund Recovery Penalty given in General Instruction D.

Enter the total of employees' salaries not reported on line 25.

Enter the employer's share of contributions to qualified and nonqualified pension plans for the year. Complete Form 5500 for the organization's plan and file as a separate return. If the organization has more than one plan, complete a form for each plan. File the form by the last day of the 7th month after the plan year ends. See General Instruction D for a discussion of Form 5500.

Enter the organization's contributions to employee benefit programs (such as insurance, health, and welfare programs) that are not an incidental part of a pension plan included on line 27. Report expenses for employee events such as a picnic or holiday party on line 28.

Enter the amount of Federal, state, and local payroll taxes for the year but only those taxes that are imposed on the organization as an employer. This includes the employer's share of social security and Medicare taxes, the Federal unemployment tax (FUTA), state unemployment compensation taxes, and other state and local payroll taxes. Do not include taxes withheld from employees' salaries and paid to the various governmental units such as Federal and state income taxes and the employees' shares of social security and Medicare taxes.

Enter the organization's fees to outside fundraisers who are paid primarily for solicitation campaigns they conducted or for consultation services connected with a solicitation of contributions by the organization itself.

Enter the total accounting and auditing fees charged by outside firms and individuals who are not employees of the reporting organization.

Enter the total legal fees charged by outside firms and individuals who are not employees of the reporting organization. Do not include any penalties, fines, or judgments imposed against the organization as a result of legal proceedings. Report those expenses on line 43, Other expenses.

Enter the total for office, classroom, medical, and other supplies used during the year, as determined by the organization's normal method of accounting for supplies.

Enter the total telephone, telegram, and similar expenses for the year.

Enter the total amount of postage, parcel delivery, trucking, and other delivery expenses, including the cost of shipping materials. Include the costs of outside mailing services on this line.

Enter the total amount paid or incurred for the use of office space or other facilities, heat, light, power, and other utilities (other than telephone expenses reported on line 34), outside janitorial services, mortgage interest, property insurance, real estate taxes, and similar expenses.

Occupancy expenses paid or incurred for program-related income, reportable on line 2, are included on line 36. Do not subtract rental income received from renting or subletting rented space from the amount reported for occupancy expense on line 36. If the activities of the organization's tenant are related to the reporting organization's exempt purpose, report rental income as program-service revenue and allocable occupancy expenses on line 36. However, if the tenant's activities are not program related, report such rental income on line 6a and related rental expenses on
line 6b.

Do not include, as an occupancy expense, depreciation (reportable on line 42) or any salaries of the reporting organization's own employees (reportable on line 26).

Enter the cost of renting and maintaining office equipment and other equipment, except for automobile and truck expenses reportable on lines 35 and 39.

Enter the printing and related costs of producing the reporting organization's own newsletters, leaflets, films, and other informational materials on this line. Also include the cost of any purchased publications. However, do not include any expenses, such as salaries or postage, for which a separate line is provided in Part II.

Enter the total travel expenses, including transportation costs (fares, mileage allowances, and automobile expenses), meals and lodging, and per diem payments.

Enter the total expenses incurred by the organization in conducting meetings related to its activities. Include such expenses as the rental of facilities, speakers' fees and expenses, and printed materials. Include the registration fees (but not travel expenses) paid for sending any of the organization's staff to conferences, meetings, or conventions conducted by other organizations. However, do not include on this line the salaries and travel expenses of the reporting organization's own officers, directors, trustees, and employees who participate.

Enter the total interest expense for the year. Do not include any interest attributable to rental property (reportable on line 6b) or any mortgage interest treated as occupancy expense on line 36.

If the organization records depreciation, depletion, and similar expenses, enter the total for the year. Include any depreciation (amortization) of leasehold improvements. The organization is not required to use the Modified Accelerated Cost Recovery System (MACRS) to compute the depreciation reported on Form 990 or Form 990-EZ. If the organization records depreciation using MACRS, attach Form 4562, or a schedule showing the same information required by Form 4562. If the organization does not use MACRS, attach a schedule showing how depreciation was computed.

For an explanation of acceptable methods for computing depreciation, see Pub. 946.

If the organization claims a deduction for depletion, attach a schedule explaining the deduction.

Show the type and amount of each significant expense for which a separate line is not provided. Report all other miscellaneous expenses as a single total. Expenses that might be reported here include investment counseling and other professional fees, but not professional fundraising fees, accounting fees, or legal fees. These are reportable on lines 30 through 32.

Other expenses includible on line 43 are: penalties, fines, and judgments; unrelated business income taxes; insurance and real estate taxes not attributable to rental property or reported as occupancy expenses; and any marketing and distribution costs not included on other lines of Part II. Attach a schedule if more space is needed.

Add lines 22 through 43 and enter the totals on line 44 in columns (A), (B), (C), and (D). Report the total amounts for columns (B), (C), and (D) in Part I, lines 13 through 15.

Organizations that included in program service expenses (column (B) of Part II) any joint costs from a combined educational campaign and fundraising solicitation must disclose how the total joint costs of all such combined activities were reported in Part II. Organizations answering “Yes” to the joint-cost question following line 44 must furnish the relevant financial data in the spaces provided.

An organization conducts a combined educational campaign and fundraising solicitation when it solicits contributions (by mail, telephone, broadcast media, or any other means) and includes, with the solicitation, educational material or other information that furthers a bona fide nonfundraising exempt purpose of the organization.

Expenses attributable to providing information regarding the organization itself, its use of past contributions, or its planned use of contributions received are not program service expenses and should not be included in column (B). This is true whether or not the organization accounts for joint costs in accordance with the AICPA's Statement of Position 98-2, Accounting for Costs of Materials and Activities of Not-for-Profit Organizations and State and Local Government Entities that Include Fund Raising. Any method of allocating joint costs to program service expenses must be reasonable under the facts and circumstances of each case. Most states with reporting requirements for charitable and other organizations that solicit contributions either require or allow the reporting of joint costs according to Statement of Position 98-2 standards.

Enter the total of non-interest-bearing checking accounts, deposits in transit, change funds, petty cash funds, or any other non-interest-bearing account. Do not include advances to employees or officers or refundable deposits paid to suppliers or others.

Enter the total of interest-bearing checking accounts, savings and temporary cash investments, such as money market funds, commercial paper, certificates of deposit, and U.S. Treasury bills or other governmental obligations that mature in less than 1 year. Report the income from these investments on line 4.

Enter the total accounts receivable (reduced by the allowance for doubtful accounts) from the sale of goods and/or the performance of services. Report claims against vendors or refundable deposits with suppliers or others here, if not significant in amount. Otherwise, report them on line 58, Other assets. Report any receivables due from officers, directors, trustees, or key employees on line 50. Report receivables (including loans and advances) due from other employees on line 58.

Enter the total pledges receivable recorded as of the beginning and end of the year. Do not include the amount of pledges estimated to be uncollectible.

Enter the total grants receivable from governmental agencies, foundations, and other organizations as of the beginning and end of the year. Organizations that follow SFAS 116 may report the present value of the grants receivable as of each balance sheet date.

Report all receivables due from officers, directors, trustees, and key employees, and all secured and unsecured loans to such persons, on line 50 and in an attached schedule discussed below. Report interest from such receivables on line 11. For a definition of “key employee,” see the instructions in Part V.

Enter the combined total of notes receivable and net loans receivable. For notes and loans that represent program-related investments (defined in the line 2 instructions), report the interest income on line 2. For all other notes and loans receivable included on line 51, report the income on line 11.

Enter the amount of materials, goods, and supplies purchased, manufactured by the organization, or donated and held for future sale or use.

Enter the amount of short-term and long-term prepayments of expenses attributable to one or more future accounting periods. Examples include prepayments of rent, insurance, and pension costs, and expenses incurred for a solicitation campaign of a future accounting period.

Enter the book value, which may be market value, of securities held as investments. Check the appropriate box to indicate whether the securities are reported at cost or fair market value. When valuing securities at fair market value, use commonly accepted valuation methods. (See Regulations section 20.2031-2.) Attach a schedule that lists the securities held at the end of the year. Indicate whether the securities are listed at cost (including the value recorded at the time of receipt in the case of donated securities) or end-of-year market value. Debt securities of the U.S., state, and municipal governments, corporate stocks and bonds, and other publicly traded securities (defined in the instructions for line 8) do not have to be listed individually, except for stock holdings that represent 5% or more of the outstanding shares of stock of the same class. However, show separate totals for each type of security (U.S. Government obligations, corporate stocks, etc.). Do not include amounts reported on line 46. Report dividends and interest from these securities on line 5.

Enter the book value (cost or other basis less accumulated depreciation) of all land, buildings, and equipment held for investment purposes, such as rental properties. Attach a schedule listing these fixed assets held as investments at the end of the year. Show for each item or category listed, the cost or other basis, accumulated depreciation, and book value. Report the income from these assets on line 6a.

Enter the amount of all other investment holdings not reported on line 54 or 55. Attach a schedule listing and describing each of these investments held at the end of the year. Show the book value for each and indicate whether the investment is listed at cost or end-of-year market value. Report the income from these assets on line 7. Do not include program-related investments. See the instructions for line 58.

Enter the book value (cost or other basis less accumulated depreciation) of all land, buildings, and equipment owned by the organization and not held for investment. This includes any property, plant, and equipment owned and used by the organization in conducting its exempt activities. Attach a schedule listing these fixed assets held at the end of the year and showing, for each item or category listed, the cost or other basis, accumulated depreciation, and book value.

List and show the book value of each category of assets not reportable on lines 45 through 57. Attach a separate schedule if more space is needed.

One type of asset reportable on line 58 is program-related investments. These are investments made primarily to accomplish an exempt purpose of the filing organization rather than to produce income.

Enter the total of lines 45 through 58. The amounts on line 59 must equal the amounts on line 74 for both the beginning and end of the year.

Enter the total of accounts payable to suppliers and others and accrued expenses, such as salaries payable, accrued payroll taxes, and interest payable.

Enter the unpaid portion of grants and awards that the organization has made a commitment to pay other organizations or individuals, whether or not the commitments have been communicated to the grantees.

Include revenue that the organization has received but not yet earned as of the balance sheet date under its method of accounting.

Enter the unpaid balance of loans received from officers, directors, trustees, and key employees. See the instructions for Part V for the definition of “key employee.” For loans outstanding at the end of the year, attach a schedule that shows, for each loan, the name and title of the lender and the information specified in items 2 through 10 of the instructions for line 50.

Enter the amount of tax-exempt bonds (or other obligations) issued by the organization on behalf of a state or local governmental unit, or by a state or local governmental unit on behalf of the organization, and for which the organization has a direct or indirect liability. Tax-exempt bonds include state or local bonds and any obligations, including direct borrowing from a lender, or certificates of participation, the interest on which is excluded from the income of the recipient for Federal income tax purposes under section 103.

For all such bonds and obligations outstanding at any time during the year, attach a schedule showing for each separate issue: (a) the purpose of the issue; (b) the amount of the issue outstanding; and (c) the unexpended bond proceeds, if any. Also indicate whether any portion of any bond-financed facility was used by a third party (other than a governmental unit or section 501(c)(3) organization), and, if so, state the percentage of space used by the third party.

If the tax-exempt bond or obligation is in the form of a mortgage, include the amount of the mortgage on line 64a, and not on line 64b. For such mortgage, include in the above listing, the maturity date of the debt, repayment terms, interest rate, and any security provided by the organization.

Line 64a does not, however, refer to situations where the organization only has a contingent liability, as it would if it were a guarantor of tax-exempt bonds issued by a related entity. Contingent liabilities, such as those that arise from guarantees, should be included as an entry in the separately attached schedule required for line 64a.

Enter the amount of mortgages and other notes payable at the beginning and end of the year. Attach a schedule showing, as of the end of the year, the total amount of all mortgages payable and, for each nonmortgage note payable, the name of the lender and the other information specified in items 2 through 10 of the instructions for line 50. The schedule should also identify the relationship of the lender to any officer, director, trustee, or key employee of the organization.

List and show the amount of each liability not reportable on lines 60 through 65. Attach a separate schedule if more space is needed.

The Financial Accounting Standards Board issued Financial Statements of Not-for-Profit Organizations (SFAS 117). SFAS 117 provides standards for external financial statements certified by an independent accountant for certain types of nonprofit organizations. SFAS 117 does not apply to credit unions, voluntary employees' beneficiary associations, supplemental unemployment benefit trusts, section 501(c)(12) cooperatives, and other member benefit or mutual benefit organizations.

While some states may require reporting in accordance with SFAS 117, IRS does not (see General Instruction E). However, a Form 990, or Form 990-EZ, return prepared in accordance with SFAS 117 will be acceptable to IRS.

Enter the balances per books of the unrestricted class of net assets. Unrestricted net assets are neither permanently restricted nor temporarily restricted by donor-imposed stipulations. All funds without donor-imposed restrictions must be classified as unrestricted, regardless of the existence of any board designations or appropriations.

Enter the balance per books for the temporarily restricted class of net assets. Donors' temporary restrictions may require that resources be used in a later period or after a specified date (time restrictions), or that resources be used for a specified purpose (purpose restrictions), or both.

Enter the total of the balances for the permanently restricted class of net assets. Permanently restricted net assets are (a) assets, such as land or works of art, donated with stipulations that they be used for a specified purpose, be preserved, and not be sold or (b) assets donated with stipulations that they be invested to provide a permanent source of income. The latter result from gifts and bequests that create permanent endowment funds.

For corporations, enter the balance per books for capital stock accounts. Show par or stated value (or for stock with no par or stated value, total amount received upon issuance) of all classes of stock issued and, as yet, uncancelled. For trusts, enter the amount in the trust principal or corpus account. For organizations continuing to use the fund method of accounting, enter the fund balances for the organization's current restricted and unrestricted funds.

Enter the balance per books for all paid-in capital in excess of par or stated value for all stock issued and uncancelled. If stockholders or others gave donations that the organization records as paid-in capital, include them here. Report any current-year donations you included on line 71 in Part I, line 1. Enter the fund balance for the land, building, and equipment fund on this line.

For corporations, enter the balance in the retained earnings, or similar account, minus the cost of any corporate treasury stock. For trusts, enter the balance per books in the accumulated income or similar account. For those organizations using fund accounting, enter the total of the fund balances for the permanent and term endowment funds as well as balances of any other funds not reported on lines 70 and 71.

For organizations that follow SFAS 117, enter the total of lines 67 through 69. For all other organizations, enter the total of lines 70 through 72. Enter the beginning-of-the-year figure on line 73, column (A), in Part I, line 19. The end-of-the-year figure on line 73, column (B) must agree with the figure on line 21 of
Part I.

Enter the total of lines 66 and 73. This amount must equal the amount for total assets reported on line 59 for both the beginning and end of the year.

In column (B), a numerical estimate of the average hours per week devoted to the position is required for a complete answer. Statements such as “as needed,” “as required,” or “40+” are unacceptable.

For each person listed, report salary, fees, bonuses, and severance payments paid. Include current-year payments of amounts reported or reportable as deferred compensation in any prior year.

Include in this column all forms of deferred compensation and future severance payments (whether or not funded; whether or not vested; and whether or not the deferred compensation plan is a qualified plan under section 401(a)). Include also payments to welfare benefit plans on behalf of the officers, etc. Such plans provide benefits such as medical, dental, life insurance, severance pay, disability, etc. Reasonable estimates may be used if precise cost figures are not readily available.

Unless the amounts were reported in column (C), report, as deferred compensation in column (D), salaries and other compensation earned during the period covered by the return, but not yet paid by the date the organization files its return.

Enter both taxable and nontaxable fringe benefits (other than de minimis fringe benefits described in section 132(e)). Include expense allowances or reimbursements that the recipients must report as income on their separate income tax returns. Examples include amounts for which the recipient did not account to the organization or allowances that were more than the payee spent on serving the organization. Include payments made under indemnification arrangements, the value of the personal use of housing, automobiles, or other assets owned or leased by the organization (or provided for the organization's use without charge), as well as any other taxable and nontaxable fringe benefits. See Pub. 525 for more information.

Answer “Yes” to this question if any officer, director, trustee, or key employee received total compensation of more than $100,000 from your organization and all related organizations (as defined below) and more than $10,000 of this compensation was provided by the related organization. For this purpose, “compensation” includes any amount that would be reportable in column (C), (D), or (E) of Part V if provided by the filing organization.

Report any compensation paid by a related organization for only that period where a control or other relationship existed between the organizations. Report compensation paid by a related organization in the same period (calendar or fiscal year) as compensation paid by the Form 990 filer.

Organizations answering “Yes” must attach a schedule that lists, for each officer, director, trustee, or key employee receiving such compensation, the name and EIN of each related organization that provided the compensation and the amount each provided. Use the same format as required by columns (C) through (E) of Part V.

Providing information on compensation received from related organizations does not violate the disclosure provisions of section 7216(a). See also section 6033(a)(1).

A “related organization” is any entity (whether tax-exempt or taxable) that the filing organization directly or indirectly owns or controls, or that directly or indirectly owns or controls the filing organization. For example, if Organization A owns 90% of B, and B owns 80% of C, then A would directly own 90% of B and indirectly own 72% (90% of 80%) of C.

“Owns” means holding (directly or indirectly) 50% or more of the voting membership rights, voting stock, profits interest, or beneficial interest.

“Control” means that:

Control exists if the 50% test is met by any one group of persons even if collectively the 50% test is not met.

Whether or not any elements of ownership or control are present, a related organization also includes:

For example, a hospital auxiliary that raises funds for Hospital Y or coordinates the efforts of that hospital's volunteer staff would be a supporting organization of Hospital Y and, thus, a related organization, even if the hospital does not own or control the auxiliary. Hospital Y, in turn, would be a supported organization of the auxiliary. In any case where the $10,000 and $100,000 minimums were met, the hospital must report (on an attachment to its return) the compensation paid by the auxiliary to the officer, director, trustee, or key employee of the hospital. The same reporting requirement would apply to compensation paid by Hospital Y to an officer, etc., of the auxiliary.

Attach a statement to explain any significant changes in the kind of activities the organization conducts to further its exempt purpose. Include new or modified activities not listed as current or planned in the organization's application for recognition of exemption, or not yet reported to the IRS by a letter to its Director EO Examination or by an attachment to the organization's return for any earlier year. Also include any major program activities that are being discontinued.

Attach a conformed copy of any changes to the articles of incorporation, or association, constitution, trust instrument, or other organizing document, or to the bylaws or other governing document. If you are filing electronically, conformed copies of changes to these documents should be sent to the IRS in Cincinnati, OH at the address in General Instruction A.

A “conformed” copy is one that agrees with the original document and all amendments to it. If the copies are not signed, they must be accompanied by a written declaration signed by an officer authorized to sign for the organization, certifying that they are complete and accurate copies of the original documents.

Photocopies of articles of incorporation showing the certification of an appropriate state official do not have to be accompanied by such a declaration. See Rev. Proc. 68-14, 1968-1 C.B. 768, for details. When a number of changes are made, attach a copy of the entire revised organizing instrument or governing document.

However, if your exempt organization changes its legal structure, such as from a trust to a corporation, you must file a new exemption application to establish that the new legal entity qualifies for exemption.

Political organizations described in section 527 are not required to answer this question.

Check “Yes” on line 78a if the organization's total gross income from all of its unrelated trades and businesses is $1,000 or more for the year. Gross income is the amount of gross receipts less the cost of goods sold. See Pub. 598 for a description of unrelated business income and the Form 990-T filing requirements for section 501(c), (e), (f), (k), and (n) organizations having such income.

For a complete liquidation of a corporation or termination of a trust, check the “Final return” box in the heading on page 1 of the form. If there was a liquidation, dissolution, termination, or substantial contraction, attach a statement explaining what took place.

On the attached statement, show whether the assets have been distributed and the date of distribution. Also attach a certified copy of any resolution, or plan of liquidation or termination, etc., with all amendments or supplements not already filed. In addition, attach a schedule listing the names and addresses of all persons who received the assets distributed in liquidation or termination, the kinds of assets distributed to each one, and each asset's fair market value.

A “substantial contraction” is a partial liquidation or other major disposition of assets except transfers for full consideration or distributions from current income.

A “major disposition of assets” means any disposition for the tax year that is:

See Regulations section 1.6043-3 for special rules and exceptions.

Answer “Yes” if most (more than 50%) of the organization's governing body, officers, directors, trustees, or membership are also officers, directors, trustees, or members of any other organization.

Disregard any coincidental overlap of membership with another organization; that is, when membership in one organization is not a condition of membership in another organization. For example, assume that a majority of the members of a section 501(c)(4) civic organization also belong to a local chamber of commerce described in section 501(c)(6). The civic organization should answer “No” on line 80 if it does not require its members to belong to the chamber of commerce.

Also disregard affiliation with any statewide or nationwide organization. Thus, the civic organization in the above example would still answer “No” on line 80 even if it belonged to a state or national federation of similar organizations. A local labor union whose members are also members of a national labor organization would answer “No” on line 80.

Political organizations described in section 527 are not required to answer this question.

A political expenditure is one intended to influence the selection, nomination, election, or appointment of anyone to a Federal, state, or local public office, or office in a political organization, or the election of Presidential or Vice Presidential electors. It does not matter whether the attempt succeeds.

An expenditure includes a payment, distribution, loan, advance, deposit, or gift of money, or anything of value. It also includes a contract, promise, or agreement to make an expenditure, whether or not legally enforceable.

Because Form 990, or Form 990-EZ, is open to public inspection, you may want the return to show contributions the organization received in the form of donated services or the use of materials, equipment, or facilities at less than fair rental value. If so, and if the organization's records either show the amount and value of such items or give a clearly objective basis for an estimate, the organization may choose to enter this optional information on line 82b. The IRS does not require any organization to keep such records. However, do not include the value of such items in Part I or II, or in the expense column in Part III. You may indicate the value of donated services or use of materials, equipment, or facilities in Part III in the narrative description of program services rendered. See the instructions for Part III.

Answer “Yes” only if the organization complied with its public inspection obligations described in General Instruction M.

See General Instruction L.

All organizations that qualify under section 170(c) to receive contributions that are deductible as charitable contributions for Federal income tax purposes, enter “N/A.” See General Instruction L.

If your organization meets any of the criteria of Exception 1 in the line 85 instructions, answer “Yes” to question 85a. By doing so, you are declaring that substantially all of the organization's membership dues were nondeductible. Skip lines 85b through 85h.

An organization is exempt from the notice, reporting, and proxy tax liability rules of section 6033(e) if it meets Exception 2, the $2,000 in-house lobbying exception. Both exceptions are discussed in the instructions for line 85.

An organization should answer “Yes” to question 85b if it met all of the requirements of Exception 2. Skip lines 85c through 85h.

If the organization's in-house direct lobbying expenditures during the 2003 reporting year were $2,000 or less, but the organization also paid or incurred other lobbying or political expenditures during the 2003 reporting year, or received a waiver for proxy tax owed for the prior year, it should answer “No” to question 85b and complete lines 85c through 85h. However, the $2,000 or less of in-house direct lobbying expenditures should not be included in the total on line 85d.

Enter the total dues, assessments, and similar amounts allocable to the 2003 reporting year.

The term “dues” means the amount the organization requires a member to pay in order to be recognized as a member.

Payments that are similar to dues include:

Include on line 85d the total amount of expenses paid or incurred during the 2003 reporting year in connection with:

Also include on line 85d:

Enter the total amount of dues, etc., allocable to the 2003 reporting year that members were notified were nondeductible under section 162(e).

The taxable amount reportable on line 85f is the amount of dues, etc.:

If the amount on line 85c (dues, etc.) is greater than the amount on line 85d (lobbying & political expenses), then:

If the amount on line 85c (dues, etc.) is less than the amount on line 85d (lobbying & political expenses), then:

See Examples given below.

An organization must pay the section 6033(e) proxy tax on the amount reported on line 85f unless it has the option to check “Yes” on line 85h.

Organizations A and B:

For Organization A—Dues, assessments, and similar amounts received in 2003 were greater than its lobbying expenses for 2003.

For Organization B—Dues, assessments, and similar amounts received in 2003 were less than its lobbying expenses for 2003.

One of the requirements that an organization must meet to qualify under section 501(c)(12) is that at least 85% of its gross income consists of amounts collected from members for the sole purpose of meeting losses and expenses. For purposes of section 501(c)(12), the term “gross income” means gross receipts without reduction for any cost of goods sold.

For a mutual or cooperative electric or telephone company, “gross income” does not include amounts received or accrued as “qualified pole rentals.”

For a mutual or cooperative telephone company, “gross income” also does not include amounts received or accrued either from another telephone company for completing long distance calls to or from or between the telephone company's members, or from the sale of display listings in a directory furnished to the telephone company's members.

Answer “Yes” to this question if at any time during the year, the organization owned a 50% or greater interest in a taxable corporation or partnership or an entity disregarded as separate from the organization under Regulations sections 301.7701-2 and 301.7701-3. If an organization answers “Yes” on line 88, complete Part IX, Information Regarding Taxable Subsidiaries and Disregarded Entities.

Section 501(c)(3) organizations must disclose any excise tax imposed during the year under section 4911 (excess lobbying expenditures), 4912 (disqualifying lobbying expenditures), or, unless abated, 4955 (political expenditures). See sections 4962 and 6033(b).

Sections 6033(b) and 6033(f) require section 501(c)(3) and (4) organizations to report the amount of taxes imposed under section 4958 (excess benefit transactions) involving the organization, unless abated, as well as any other information the Secretary may require concerning those transactions. See General Instruction P for a discussion of excess benefit transactions.

Attach a statement describing any excess benefit transaction, the disqualified person or persons involved, and whether or not the excess benefit transaction was corrected.

For line 89c, enter the amount of taxes imposed on organization managers or disqualified persons under sections 4912, 4955, and 4958, unless abated.

For line 89d, enter the amount of tax on line 89c that was reimbursed by the organization. Any reimbursement of the excise tax liability of a disqualified person or organization manager will be treated as an excess benefit unless (1) the organization treats the reimbursement as compensation during the year the reimbursement is made, and (2) the total compensation to that person, including the reimbursement, is reasonable.

List each state with which the organization is filing a copy of this return in full or partial satisfaction of state filing requirements.

Enter the number of employees on your payroll during the pay period including March 12, 2003, as shown on your Form 941 or Form 943 (January-March calendar quarter return only). Do not include household employees, persons who received no pay during the pay period, pensioners, or members of the Armed Forces.

Section 4947(a)(1) nonexempt charitable trusts that file Form 990 instead of Form 1041 must complete this line. The trust should include exempt-interest dividends received from a mutual fund or other regulated investment company as well as tax-exempt interest received directly.

In column (A), identify any unrelated business income reportable in column (B) by selecting a business code from the Codes for Unrelated Business Activity in the 2003 Instructions for Form 990-T.

In column (B), enter any revenue received from activities unrelated to the exempt purpose of the organization. See the Instructions for Form 990-T and Pub. 598 for a discussion of what is unrelated business income. If you enter an amount in column (B), then you must enter a business code in column (A).

In column (C), enter an exclusion code from the Exclusion Codes list on the last page of the Specific Instructions for Form 990 to identify any revenue excludable from unrelated business income. If more than one exclusion code applies to a particular revenue item, use the lowest numbered exclusion code that applies. If nontaxable revenues from several sources are reportable on the same line in column (D), use the exclusion code that applies to the largest revenue source. If the list of exclusion codes does not include an item of revenue that is excludable from unrelated business income, enter that item in column (E) and see the instructions for column (E).

For column (D), identify any revenue received that is excludable from unrelated business income. If you enter an amount in column (D), you must enter an exclusion code in
column (C).

For column (E), report any revenue from activities related to the organization's exempt purpose; (i.e., income received from activities that form the basis of the organization's exemption from taxation). Also report here any revenue that is excludable from gross income other than by Code section 512, 513, or 514, such as interest on state and local bonds that is excluded from tax by section 103. Explain in Part VIII how any amount reported in column (E) related to the accomplishment of the organization's exempt purposes.

List the organization's revenue-producing program service activities on these lines. Program service activities are primarily those that form the basis of an organization's exemption from tax. Enter in the appropriate columns, gross revenue from each program service activity and the business and exclusion codes that identify this revenue. See the explanation of program service revenue in the instructions for Part I, line 2.

Enter the revenue received from Medicare and Medicaid payments. See the Examples of program service revenue in the instructions for Part I, line 2.

In the appropriate columns, enter gross revenue earned from fees and contract payments by government agencies for a service, facility, or product that benefited the government agency primarily, either economically or physically. Do not include government grants that enabled your organization to benefit the public directly and primarily. See Part I, line 1c instructions for the distinction between government grants that represent contributions and payments from government agencies for a service, product, or facility that primarily benefited the government agencies.

Report on line 2 of Part I (program service revenue) the sum of the entries in columns (B), (D), and (E) for lines 93(a) through (g).

In the appropriate columns, report the revenue received for these line items. General instructions for lines 94 through 96 are given in the instructions for Part I, lines 3 through 5.

Report net rental income from investment property on these lines. Also report here rental income from unaffiliated exempt organizations. Report rental income, however, from an exempt function (program service) on line 93. Refer to the instructions for Part I, line 6. A more detailed discussion of rental income is given in the Instructions for Form 990-T and Pub. 598.

Rents from real property are usually excluded in computing unrelated business taxable income, as are incidental amounts (10% or less) of rental income from personal property leased with real property (mixed lease). In a mixed lease where the rent attributable to personal property is more than 50% of the total rent, neither rent from real or personal property is excluded from unrelated business taxable income. The exclusion also does not apply when the real or personal property rentals depend wholly or partly on the income or profits from leased property, other than an amount based on a fixed percentage or percentage of gross receipts or sales.

The rental exclusion from unrelated business taxable income does not apply to debt-financed real property. In general, debt-financed property is any property that the organization finances by debt and holds to produce income instead of for exempt purposes. An exempt organization's income from debt-financed property is treated as unrelated business taxable income and is subject to tax in the same proportion as the property remains financed by the debt. If substantially all (85% or more) of any property is used for an organization's exempt purposes, the property is not treated as debt-financed property. The rules for debt-financed property do not apply to rents from personal property.

In the appropriate columns, report the revenue received for these line items. General instructions for lines 99 through 102 are given in the instructions for Part I, lines 7 through 10.

List any “Other revenue” activity on these lines. These activities are discussed in the instructions for line 11, Part I. In the appropriate columns, enter the revenue received from these activities. Select applicable business and exclusion codes. Report as “Other revenue,” on line 11 of Part I, the total revenue entered in columns (B), (D), and (E) for lines 103(a) through (e).

Enter the total revenue reported on line 104 for columns (B), (D), and (E). The amount reported on line 105, plus the amount on line 1d of Part I, should equal the amount entered for “Total revenue” on line 12 of Part I.

Use the 2003 Form 990-EZ to report on a calendar year accounting period beginning January 1, 2003, and ending December 31, 2003.

Use the 2003 Form 990-EZ to report on an accounting period other than a calendar year (either a fiscal year that began in 2003 or a short period (less than 12 months) that began in 2003). You must show the month and day in 2003 that your fiscal year began, or the short period began. You must also show the day, month, and year your fiscal year or short period ended. See General Instruction G.

If we mailed the organization a Form 990 Package with a preaddressed mailing label, attach the label in the name and address space on the organization's return. Using the label helps us avoid errors in processing the return. If any information on the label is wrong, draw a line through that part and correct it.

If the organization operates under a name different from its legal name, give the legal name of the organization but identify its alternate name, after the legal name, by writing "aka" (also known as) and the alternate name of the organization. However, if the organization has changed its name, follow the instructions for Name change in Item B—Checkboxes.

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

For foreign addresses, enter information in the following order: City, province or state, and the name of the country. Follow the foreign country's practice in placing the postal code in the address. Please do not abbreviate the country name.

If a change of address occurs after the return is filed, use Form 8822 to notify the IRS of the new address.

The organization should have only one Federal employer identification number (EIN). If the organization has more than one EIN and has not been advised which to use, notify the Internal Revenue Service Center, Ogden, UT 84201-0027. State what numbers the organization has, the name and address to which each number was assigned, and the address of its principal office. The IRS will advise the organization which number to use.

Enter a telephone number of the organization that members of the public and government regulators may use during normal business hours to obtain information about the organization's finances and activities. If the organization does not have a telephone number, enter the telephone number of an organization official who can provide such information.

The group exemption number (GEN) is a number assigned by the IRS to the central/parent organization of a group that has a group ruling.

If the organization is covered by a group exemption letter, enter the four-digit group exemption number. Contact the central/parent organization if you are unsure of the GEN assigned.

Indicate the method of accounting used in preparing this return. See General
Instruction G.

Whether or not the organization enters any amount on line 1 of Form 990-EZ, the organization must either check the box in item H or attach Schedule B (Form 990, 990-EZ, or 990-PF). Failure to either check the box in item H or file Schedule B (Form 990, 990-EZ, or 990-PF) will result in a determination that the return is incomplete. See the instructions for Schedule B (Form 990, 990-EZ, or 990-PF), Schedule of Contributors, for more information.

Show the organization's website address if a website is available. Otherwise, write "N/A" (not applicable). Consider adding your email address to your website.

If the organization is exempt under section 501(c), check the applicable box and insert, within the parentheses, the number that identifies the type of section 501(c) organization the filer is. See the chart in General Instruction C. The term “section 501(c)(3)” includes organizations exempt under sections 501(e), (f), (k), and (n). Check the box if the organization is a section 527 political organization. See General Instruction U.

If the organization is a section 4947(a)(1) nonexempt charitable trust, check the applicable box. Note also the discussion regarding Schedule A (Form 990 or 990-EZ) and Form 1041 in General Instruction D and the instructions for line 43.

Check this box if the organization's gross receipts are normally not more than $25,000. However, if the organization received a Form 990 Package, see General Instruction A and the discussion on gross receipts in General Instruction B.

Only those organizations with gross receipts of less than $100,000 and total assets of less than $250,000 at the end of the year can use the Form 990-EZ. If the organization does not meet these requirements, it must file Form 990. The organization's gross receipts are the total amount it received from all sources during its annual accounting period, without subtracting any costs or expenses. See the gross receipts discussion in General Instruction B.

Reporting for line 1, in accordance with SFAS 116, Accounting for Contributions Received and Contributions Made, is acceptable for Form 990-EZ, or Form 990, purposes, but not required by the IRS. However, see General Instruction E.

An organization that receives a grant to be paid in future years should, according to SFAS 116, report the grant's present value on line 1. Accruals of present value increments to the unpaid grant should also be reported on line 1 in future years.

See General Instruction L and Schedule B (Form 990, 990-EZ, or 990-PF).

Attach Schedule B (Form 990, 990-EZ, or 990-PF). See General Instruction L and the Specific Instructions for Completing the Heading of Form 990-EZ, Item H.

Enter the total program service revenue (exempt function income). Program services are primarily those that form the basis of an organization's exemption from tax.

Enter members' and affiliates' dues and assessments that are not contributions. See also General Instruction L.

These include subscriptions to publications; newsletters (other than one about the organization's activities only); free or reduced-rate admissions to events the organization sponsors; use of its facilities; and discounts on articles or services that both members and nonmembers can buy. In figuring the value of membership benefits, disregard such intangible benefits as the right to attend meetings, vote, or hold office in the organization, and the distinction of being a member of the organization.

Report on line 5a all sales of securities and sales of all other types of investments (such as real estate, royalty interests, or partnership interests) as well as sales of all other noninventory assets (such as program-related investments and fixed assets used by the organization in its related and unrelated activities).

Total the cost or other basis (less depreciation) and selling expenses and enter the result on line 5b. On line 5c, enter the net gain or loss. Report capital gains dividends, the organization's share of capital gains and losses from a partnership, and capital gains distributions from trusts on lines 5a and 5c. Indicate the source on the schedule described below.

For this return, you may use the more convenient way to figure the organization's gain or loss from sales of securities by comparing the sales price with the average-cost basis of the particular security sold. However, generally, the average-cost basis is not used to figure the gain or loss from sales of securities reportable on Form 990-T.

Do not include on line 5 any unrealized gains or losses on securities that are carried in the books of account at market value. See the instructions for line 20.

On the appropriate line, enter the gross revenue, expenses, and net income (or loss) from all special events and activities, such as dinners, dances, carnivals, raffles, bingo games, other gaming activities, and door-to-door sales of merchandise.

These activities only incidentally accomplish an exempt purpose. Their sole or primary purpose is to raise funds that are other than contributions to finance the organization's exempt activities.

This is done by offering goods or services that have more than a nominal value (compared to the price charged) for a payment that is more than the direct cost of those goods or services. See line 1 instructions A1 and A2 for a discussion on contributions reportable on line 1 and revenue reportable on line 6. See also General Instruction L.

Calling any required payment a “donation” or “contribution” on tickets, advertising, or solicitation materials does not change how these payments should be reported on Form 990-EZ.

The gross revenue from gaming activities and other special events must be reported in the right-hand column on line 6a without reduction for cash or noncash prizes, cost of goods sold, compensation, fees, or other expenses. Be sure to check the box for gaming if the organization conducted directly, or through the promoter, any amount of gaming during the year.

Gaming includes (but is not limited to): bingo, pull tabs, instant bingo raffles, scratch-offs, charitable gaming tickets, break-opens, hard cards, banded tickets, jar tickets, pickle cards, Lucky Seven cards, Nevada Club tickets, casino nights, Las Vegas nights and coin-operated gambling devices. Coin-operated gambling devices include slot machines, electronic video slot or line games, video poker, video blackjack, video keno, video bingo, video pull tab games, etc.

Attach a schedule listing the three largest fundraising events, as measured by gross receipts. If gaming is conducted, treat different types of gaming separately to determine the three largest events. For example, treat bingo and pull tabs as separate fundraising events. Describe each of these events by listing the type of event and the number of occasions that the event occurred and show (for each event):

For gaming, direct expenses include: cash and noncash prizes, compensation to bingo callers and workers, rental of gaming equipment, cost of bingo supplies such as pull tab deals, etc.

Furnish the same information, in total figures, for all other special events held that are not among the largest three. Indicate the type and number of the events not listed individually (e.g., three dances and two raffles).

An example of this schedule of special events might appear in columnar form as follows:

If you use this format, report the total for Contributions on line 1 of Form 990-EZ and on line 6a (within the parentheses). Report the totals for Gross Revenue, in the right-hand column, on line 6a; Direct Expenses on line 6b; and Net Income or (loss) on line 6c.

Enter the total income from all sources not covered by lines 1 through 7. Examples of types of income includible on line 8 are interest on notes receivable not held as investments or as program-related investments (defined in the line 2 instructions); interest on loans to officers, directors, trustees, key employees, and other employees; and royalties that are not investment income or program service revenue.

Reporting for line 10 in accordance with SFAS 116, is acceptable for Form 990-EZ purposes, but not required by IRS. However, see General Instruction E.

An organization that makes a grant to be paid in future years should, according to SFAS 116, report the grant's present value on line 10. Accruals of present value increments to the unpaid grant should also be reported on line 10 in future years.

Enter the amount of actual grants and similar amounts paid to individuals and organizations selected by the filing organization. Include scholarship, fellowship, and research grants to individuals.

Attach a schedule to explain the amounts reported on line 10. Show on this schedule:

Any grants reported on line 10 that were approved during the year, but not paid by the due date for filing Form 990-EZ (including extensions), must be identified and listed separately in the line 10 schedule.

Give the name and address of each affiliate that received any payment reported on line 10. Specify both the amount and purpose of these payments.

Classify activities on this schedule in more detail than by using such broad terms as charitable, educational, religious, or scientific. For example, identify payments to affiliates; payments for nursing services; fellowships; or payments for food, shelter, or medical services for indigents or disaster victims. For payments to indigent families, do not identify the individuals.

If an organization gives property other than cash and measures an award or grant by the property's fair market value, also show on this schedule:

Any difference between a property's fair market value and book value should be recorded in the organization's books of account and on line 20.

Colleges, universities, and primary and secondary schools are not required to list the names of individuals who were provided scholarships or other financial assistance whether they are the recipients of Federal grant money or not. Instead, these organizations must (a) group each type of financial aid provided; (b) indicate the number of individuals who received the aid; and (c) specify the aggregate dollar amount.

For an organization that gives benefits to members or dependents (such as organizations exempt under section 501(c)(8), (9), or (17)), enter the amounts paid for: (a) death, sickness, hospitalization, or disability benefits; (b) unemployment compensation benefits; and (c) other benefits. Do not include, on this line, the cost of employment-related benefits the organization gives its officers and employees. Report them on line 12.

Enter the total salaries and wages paid to all employees and the fees paid to officers, directors, and trustees. Include the total of the employer's share of the contributions the organization paid to qualified and nonqualified pension plans and the employer's share of contributions to employee benefit programs (such as insurance, health, and welfare programs) that are not an incidental part of a pension plan. Complete the Form 5500 return if you are required to file it.

Also include in the total the amount of Federal, state, and local payroll taxes for the year that are imposed on the organization as an employer. This includes the employer's share of social security and Medicare taxes, Federal unemployment tax (FUTA), state unemployment compensation tax, and other state and local payroll taxes. Taxes withheld from employees' salaries and paid over to the various governmental units (such as Federal and state income taxes and the employees' share of social security and Medicare taxes) are part of the employees' salaries included on line 12. Report expenses paid or incurred for employee events such as a picnic or holiday party on this line.

Enter the total amount of legal, accounting, auditing, other professional fees (such as fees for fundraising or investment services) and related expenses charged by outside firms and individuals who are not employees of the organization. Do not include any penalties, fines, or judgments imposed against the organization as a result of legal proceedings. Report and identify those expenses on line 16. Report fees paid to directors and trustees on line 12.

Enter the total amount paid or incurred for the use of office space or other facilities, heat, light, power, and other utilities, outside janitorial services, mortgage interest, real estate taxes and property insurance attributable to rental property, and similar expenses. Do not subtract from rental expenses reported on line 14 any rental income received from renting or subletting rented space. See the instructions for lines 2 and 4 to determine whether such income is reportable as exempt function income or investment income. However, report on line 14 any rental expenses for rental income reported on lines 2 and 4. If the organization records depreciation on property it occupies, enter the total for the year.

For an explanation of acceptable methods for computing depreciation, see Pub. 946.

Enter the printing and related costs of producing the reporting organization's own newsletters, leaflets, films, and other informational materials on this line. Include the costs of outside mailing services on this line. Also include the cost of any purchased publications as well as postage and shipping costs not reportable on lines 5b, 6b, or 7b. Do not include any expenses, such as salaries, for which a separate line is provided.

Include here such expenses as penalties, fines, and judgments; unrelated business income taxes; insurance and real estate taxes not attributable to rental property or reported as occupancy expenses; depreciation on investment property; travel and transportation costs; interest expense; and expenses for conferences, conventions, and meetings.

Some states that accept Form 990-EZ in satisfaction of their filing requirements may require that certain types of miscellaneous expenses be itemized. See General Instruction E.

Enter the difference between lines 9 and 17. If line 17 is more than line 9, enter the difference in parentheses.

Enter the amount from the prior year's balance sheet or from Form 5500 or an approved DOL form if General Instruction F applies.

Attach a statement explaining any changes in net assets or fund balances between the beginning and end of the year that are not accounted for by the amount on line 18. Amounts to report here include adjustments of earlier years' activity; unrealized gains and losses on investments carried at market value; and any difference between fair market value and book value of property given as an award or grant. See General Instruction G regarding the reporting of a section 481(a) adjustment to conform to SFAS 116.

Include all interest and non-interest bearing accounts such as petty cash funds, checking accounts, savings accounts, money market funds, commercial paper, certificates of deposit, U.S. Treasury bills, and other government obligations. Also include the book value of securities held as investments, and all other investment holdings including land and buildings held for investment. Report the income from these investments on line 4.

Enter the book value (cost or other basis less accumulated depreciation) of all land and buildings owned by the organization and not held for investment.

Enter the total of other assets along with a description of those assets. Amounts to include here are (among others) receivable accounts, inventories, and prepaid expenses.

Enter the amount of total assets. If the end-of-year total assets entered in column (B) are $250,000 or more, Form 990 must be filed instead of Form 990-EZ.

Subtract line 26 (total liabilities) from line 25 (total assets) to determine net assets. Enter this net asset amount on line 27. The amount entered in column (B) should agree with the net asset or fund balance amount on line 21.

States that accept Form 990-EZ as their basic report form may require a separate statement of changes in net assets. See General Instruction E.

In column (B), a numerical estimate of the average hours per week devoted to the position is required for a complete answer. Statements such as “as needed” or “as required,” or “40+” are unacceptable.

For each person listed, report salary, fees, bonuses, and severance payments paid. Include current-year payments of amounts reported or reportable as deferred compensation in any prior year.

Include in this column all forms of deferred compensation and future severance payments (whether or not funded; whether or not vested; and whether or not the deferred compensation plan is a qualified plan under section 401(a)). Include also payments to welfare benefit plans on behalf of the officers, etc. Such plans provide benefits such as medical, dental, life insurance, severance pay, disability, etc. Reasonable estimates may be used if precise cost figures are not readily available.

Unless the amounts were reported in column (C), report, as deferred compensation in column (D), salaries and other compensation earned during the period covered by the return, but not yet paid by the date the organization files its return.

Enter both taxable and nontaxable fringe benefits (other than de minimis fringe benefits described in section 132(e)). Include amounts that the recipients must report as income on their separate income tax returns. Examples include amounts for which the recipient did not account to the organization or allowances that were more than the payee spent on serving the organization. Include payments made under indemnification arrangements, the value of the personal use of housing, automobiles, or other assets owned or leased by the organization (or provided for the organization's use without charge), as well as any other taxable and nontaxable fringe benefits. See Pub. 525 for more information.

Form 941 must be filed to report income tax withholding and social security and Medicare taxes. The organization must also file Form 940 to report Federal unemployment tax, unless the organization is not subject to these taxes. See Pub. 15 (Circular E) for more information. See also the Trust Fund Recovery Penalty discussion in General Instruction D.

Attach a statement to explain any significant changes in the kind of activities the organization conducts to further its exempt purpose. Include new or modified activities not listed as current or planned in the organization's application for recognition of exemption or not already made known to the IRS by a letter to its Director EO Examination or by an attachment to the organization's return for any earlier year. Also include any major program activities that are being discontinued.

Attach a conformed copy of any changes to the articles of incorporation, or association, constitution, trust instrument, or other organizing document, or to the bylaws or other governing document. If you are filing electronically, conformed copies of these documents should be sent to the IRS in Cincinnati, OH at the address in General Instruction A.

A “conformed copy” is one that agrees with the original document and all amendments to it. If the copies are not signed, they must be accompanied by a written declaration signed by an officer authorized to sign for the organization, certifying that they are complete and accurate copies of the original documents.

Photocopies of articles of incorporation showing the certification of an appropriate state official need not be accompanied by such a declaration. See Rev. Proc. 68-14, 1968-1 C.B. 768, for details. When a number of changes are made, attach a copy of the entire revised organizing instrument or governing document.

However, if your exempt organization changes its legal structure, such as from a trust to a corporation, you must file a new exemption application to establish that the new legal entity qualifies for exemption.

Political organizations described in section 527 are not required to answer this question.

Check “Yes” on line 35a if the organization's total gross income from all of its unrelated trades and businesses is $1,000 or more for the year. Gross income is gross receipts less the cost of goods sold. See Pub. 598 for a description of unrelated business income and the 2003 Instructions for Form 990-T for the Form 990-T filing requirements. Form 990-T is not a substitute for Form 990-EZ. Items of income and expense reported on Form 990-T must also be reported on Form 990-EZ when the organization is required to file both forms.

If you check “No” to line 35a, you are certifying that the organization was not subject to the notice and reporting requirements of section 6033(e) and that the organization had no lobbying and political expenditures potentially subject to the proxy tax.

If you check “Yes” on line 35a to declare that your organization had reportable section 6033(e) lobbying and political expenses in the 2003 reporting year (and potential liability for the proxy tax):

Only certain organizations that are tax exempt under sections:

If your organization is not tax-exempt under sections 501(c)(4), (5), or (6), check “No” on line 35a, unless there was unrelated business income.

If the organization meets Exception 1 or 2 below, it is excluded from the notice, reporting, and proxy tax requirements of section 6033(e), and you should check “No” to line 35a, unless the organization had $1,000 or more of unrelated business income. See also Rev. Proc. 98-19, 1998-1 C.B. 547.

If there was a liquidation, dissolution, termination, or substantial contraction, attach a statement explaining what took place.

For a complete liquidation of a corporation or termination of a trust, check the “Final Return” box in the heading of the return. On the attached statement, show whether the assets have been distributed and the date. Also attach a certified copy of any resolution, or plan of liquidation or termination, etc., with all amendments or supplements not already filed. In addition, attach a schedule listing the names and addresses of all persons who received the assets distributed in liquidation or termination; the kinds of assets distributed to each one; and each asset's fair market value.

A “substantial contraction” is a partial liquidation or other major disposition of assets except transfers for full consideration or distributions from current income.

A “major disposition of assets” means any disposition for the tax year that is:

See Regulations section 1.6043-3 for special rules and exceptions.

Political organizations described in section 527 are not required to answer this question.

A political expenditure is one intended to influence the selection, nomination, election, or appointment of anyone to a Federal, state, or local public office, or office in a political organization, or the election of Presidential or Vice Presidential electors. It does not matter whether the attempt succeeds.

An expenditure includes a payment, distribution, loan, advance, deposit, or gift of money, or anything of value. It also includes a contract, promise, or agreement to make an expenditure, whether or not legally enforceable.

Enter the end-of-year unpaid balance of secured and unsecured loans made to or received from officers, directors, trustees, and key employees. For example, if the organization borrowed $1,000 from one officer and loaned $500 to another, none of which has been repaid, report $1,500 on line 38b.

For loans outstanding at the end of the year, attach a schedule as described below. Report any interest expense on line 16 and any interest income on line 2, 4, or 8, depending on the nature of the receivable that created the interest income.

Section 501(c)(3) organizations must disclose any excise tax imposed during the year under section 4911 (excess lobbying expenditures), 4912 (disqualifying lobbying expenditures), or, unless abated, 4955 (political expenditures). See sections 4962 and 6033(b).

Sections 6033(b) and 6033(f) require section 501(c)(3) and (4) organizations to report the amount of taxes imposed under section 4958 (excess benefit transactions) involving the organization, unless abated, as well as any other information the Secretary may require concerning those transactions. See General Instruction P for a discussion of excess benefit transactions.

Attach a statement describing any excess benefit transaction, the disqualified person or persons involved, and whether or not the excess benefit transaction was corrected.

For line 40c, enter the amount of taxes imposed on organization managers or disqualified persons under sections 4912, 4955, and 4958, unless abated.

For line 40d, enter the amount of tax on line 40c that was reimbursed by the organization. Any reimbursement of the excise tax liability of a disqualified person or organization manager will be treated as an excess benefit unless (1) the organization treats the reimbursement as compensation during the year the reimbursement is made, and (2) the total compensation to that person, including the reimbursement, is reasonable.

List each state with which the organization is filing a copy of this return in full or partial satisfaction of state filing requirements.

Section 4947(a)(1) nonexempt charitable trusts that file Form 990-EZ instead of Form 1041 must complete this line. The trust should include exempt-interest dividends received from a mutual fund or other regulated investment company as well as tax-exempt interest received directly.