TY 2006 EO Returns Significant Changes
The instructions to the 2006 Forms 990 and 990-EZ and Schedule A incorporate significant changes to address legislation enacted in 2006 and comments received from the public. The following are highlights of the significant changes. Questions and answers supplementing the instructions for these changes are also available.
IRS officials have highlighted these changes in two public forums; resources from those events may also be of interest
- Telephone conferences conducted on March 21 and 22, 2007. The text of the presentation can be found here.
- A Tax Talk Today program highlighting legislative changes to exempt organizations tax law
Family and Business Relationships of Officers, Directors, Trustees and Key Employees
- The definitions of family and business relationships used for purposes of completing Form 990, Line 51 must now also be used for purposes of completing Form 990, line 75b. See pages 32 and 35 of the Form 990 Instructions.
Compensation of Officers, Directors, Trustees and Key Employees from Related Organizations
- The definition of related organization (used for purposes of completing Form 990 line 75c) is clarified by listing eight specific relationships. See page 35 of the Form 990 Instructions.
- The definition of related organization excludes certain bank or financial institution trustees and certain common independent contractors.
- Organizations no longer have to report the amount of compensation where (1) the organization conducts joint programs or shares facilities or employees, (2) one or more persons exercise substantial influence over two organizations, and (3) volunteers control two organizations.
- The definition of substantial influence is clarified by referencing Internal Revenue Code section 4958(f)(1) and Regulations section 53.4958-3.
- A supporting organization must now generally file Form 990 (or Form 990-EZ, if applicable), even if its gross receipts are normally less than $25,000. See page 2 of the 990 Instructions, and
- A supporting organization must provide additional information on Schedule A, page 3. See page 7 of Schedule A instructions.
Organizations Maintaining Donor Advised Funds
- Organizations maintaining donor advised funds must complete new lines 1a and 22a on Form 990. See pages 23 and 28 of Form 990 Instructions.
- Organizations maintaining donor advised funds must complete new lines 4a through 4g on the Schedule A. See pages 3 and 4 of the Schedule A Instructions.
Organizations with Controlled Entities
- Organizations with controlled entities must file Form 990 even if their gross receipts are normally less than $25,000. See page 2 of the Form 990 Instructions.
- Organizations with controlled entities must file Form 990 even if their gross receipts are normally less than $25,000. See pages 2 and 41-42 of the Form 990 Instructions and Code section 512(b)(13).
Organizations Paying Travel and Entertainment Expenses for Government Officials
- Organizations paying travel and entertainment expenses for federal, state and local government officials and their family members must separately report certain payments on Form 990, Line 43 as described on page 30 of Form 990 Instructions.
Organizations with Conservation Easements
- An organizations receiving or holding conservation easements must complete Schedule A, line 3c and attach a schedule with the information described on page 3 of the Schedule A Instructions.
For more information, see the What’s New section of the form instructions.