For what periods must the Statement of Revenue and Expenses in Part IX be completed?
The tax years for which financial information must be provided for the Statement of Revenues and Expenses in Part IX depends on the number of tax years an applicant has completed since it was formed. An organization’s tax year is its annual accounting period.
The following examples explain how to determine the number of years an organization has completed since it was incorporated or formed.
Example 1: X was incorporated as a nonprofit organization on June 4, 2010. It selected an annual accounting period that ends December 31. Therefore, its first tax year is June 4, 2010 through December 31, 2010. Its second tax year is January 1, 2011 through December 31, 2011. Its third tax year is January 1, 2012 through December 31, 2012. Its fourth tax year is January 1, 2013 through December 31, 2013.
Example 2: Y was formed as a trust on June 4, 2010. It selected an annual accounting period that ends June 30. Therefore, its first tax year is June 4, 2010 through June 30, 2010. Its second tax year is July 1, 2010 through June 30, 2011. Its third tax year is July 1, 2011 through June 30, 2012. Its fourth tax year is July 1, 2012 through June 30, 2013.
If an organization has been in existence for less than 5 years, it must complete the schedule in Part IX for each year in existence and provide projections of likely revenues and expenses based on a reasonable and good faith estimate of future finances for a total of:
- Three years of financial information if it has not completed one tax year, or
- Four years of financial information if it has completed one tax year.
If in existence for 5 years or more, it must complete the schedule for the most recent 5 tax years. It will need to provide a separate statement that includes information about the most recent 5 years because the data table in Part IX does not provide for the 5th year.