2015 EXEMPT ORGANIZATION INCOME TAX RETURN CHECKLIST (FORM 990)

Transcription

1 2015 EXEMPT ORGANIZATION INCOME TAX Client Name and Number: Prepared by: Date: Reviewed by: Date: 100) GENERAL INFORMATION DONE N/A 101) Determine if the organization is exempt from filing an exempt organization return or is a Private Foundation. If the organization is either exempt from filing or is a Private Foundation, DO NOT COMPLETE THIS. 102) Based upon the income and asset thresholds in the Form 990 instructions, determine which form the Organization must file (Form 990-N, Form 990-EZ, or Form 990). 103) Consider obtaining a signed engagement letter. 104) Consider a separate engagement letter for tax advice under the CPA-client privilege under provisions of ) Verify organization s name, address, tax year, tax identification number, telephone number, exempt status, website address, year of formation, and state of legal domicile. 106) Review the prior year returns, workpapers, correspondence, planning suggestions and carryovers, permanent file, and revenue agent s reports and/or adjustments. 107) If the Organization changed its method of accounting for its books: 1) Consider whether the Organization should change its method of accounting for purposes of the exempt returns. 2) Ensure that the method of accounting clearly reflects income. 3) Review the instructions for Form 3115, Application for Change in Accounting Method, to determine if Form 3115 must be filed EXEMPT ORGANIZATION INCOME TAX 1

2 100) GENERAL INFORMATION DONE N/A 108) If there was a change of accounting period: 1) Ensure that the Organization files a Form 990 for the short period resulting from the change. 2) Ensure that Change of Accounting Period is written at the top of the short-period return. 3) If the Organization previously changed its accounting period within the past 10 years, there are additional considerations. Please see Section D. of the Form 990 instructions for additional information. 109) Ensure that all relevant questions in Part VI, Section A, Form 990 have been answered and statements provided in Schedule O, if required. 110) Ensure that all policy related questions in Part VI, Section B, have been answered based upon the policies status as of the end of the Organization s tax year. 111) Ensure that the Organization has been alerted to any governance issues. 112) Ensure that all Directors/Trustees have been identified appropriately either as independent or not independent. 200) ENSURE THAT THE CORRECT FORMS HAVE BEEN PREPARED DONE N/A 201) Consider that unless a specific exception applies, a supporting organization may not file Form 990-N. 202) If the Organization maintains donor advised funds: 1) Consider that a sponsoring organization (except churches and certain governmental entities etc.), must file Form 990 (not 990-N or 990-EZ). 2) Ensure that the Organization completed Part I of Schedule D EXEMPT ORGANIZATION INCOME TAX 2

3 200) ENSURE THAT THE CORRECT FORMS HAVE BEEN PREPARED DONE N/A 203) If the Organization is a controlling organization within the meaning of 512(b)(13): 1) Consider that a controlling organization of one or more controlled entities, as described in 512(b)(13), must file Form 990 instead of 990-EZ. 2) Review the instructions for Schedule R regarding transfers of funds between controlling organizations and controlled entities. 204) Consider that a nonexempt charitable trust described under 4947(a)(1) (if not treated as a private foundation) is required to file Form 990 or 990-EZ, unless a specific exception applies. See section A of the Form 990 instructions under, Who Must File. 205) Consider that a central, parent or similar organization may file a group return only for those organizations that are exempt from tax under a group exemption letter. 206) If a group return is permissable and desireable, the parent should prepare and file a separate return for its own activities and a group return that includes the combined amounts for all of the subordinate organizations that opt to be included in the group. Item H, page 1, Form 990 should reflect whether the return is for a Group Filing. 207) If the Organization conducts operations or has property in multiple states: 1) Consider that the Organization may have filing nexus for its exempt organization return in multiple states by virtue of its activities in those states, employees working in those states and/or property owned/leased in those states. 2) Consider that some states require their own exempt organization returns, some states require a copy of Form 990 and some states require a filing only if there is tax due (Form 990-T). 208) Ensure that the Organization has prepared the required returns or other forms for states in which it has filing nexus. 209) Ensure that all required registration statements have been filed in states where the Organization engages in solicitation activities. 210) Ensure that the Organization has included descriptions of its program service accomplishments in Form 990, Part III of the return. 211) Ensure that the Organization disclosed any new programs in Form 990, Part III EXEMPT ORGANIZATION INCOME TAX 3

4 300) VERIFY THAT ALL REQUIRED SCHEDULES HAVE BEEN PREPARED DONE N/A 301) If the Organization is a public charity under 509(a)(1): 1) Consider that the Organization will generally complete the public support test on Page 2 of Schedule A (an organization may choose to complete the test on page 3). 2) Consider that an Organization that is 5 or fewer years old should check box 13 in Part II, Section B and should NOT complete Section C. 3) Ensure that the Organization maintains a per contributor/per year schedule of contributions in order to complete line 5 (excess contributions), Part II, Section A of the public support test. 4) Ensure that donated services and/or uses of facilities have not been included in the public support numbers unless they are from a governmental unit. 302) If the Organization is exempt under 509(a)(2): 1) Consider that the Organization will generally complete the public support test on page 3 of Schedule A (an organization may choose to complete the test on page 2). 2) Consider that an Organization that is 5 or fewer years old should check box 13 Part II, in Section B and should NOT complete Section C. 3) Ensure that the Organization has reported certain amounts from disqualified persons (including substantial contributors) as well as amounts in excess of specific thresholds for each year. See the instructions for Schedule A, Part III, lines 7a and 7b. 4) Ensure that donated services and/or use of facilities are not included in the public support numbers unless they are from a governmental unit. 303) Determine that an Organization exempt under 509(a)(3), has checked the Type I, Type II or Type III box on line 11, Schedule A, and the applicable boxes on lines 11e, 11f, 11g, and 11h. 304) Consider that Organizations that do not pass the 33.3% test should consider the use of the Facts & Circumstances Test or the treatment of large grants as unusual so that they may be excluded from the calculation EXEMPT ORGANIZATION INCOME TAX 4

5 300) VERIFY THAT ALL REQUIRED SCHEDULES HAVE BEEN PREPARED DONE N/A 305) If the Organization received contributions during the year: 1) The Organization may need to complete schedule B. 2) Consider that Organizations exempt under 501(c)(7), (8) or (9), are subject to special Schedule B thresholds and disclosure rules. 306) Ensure that organizations exempt under 509(a)(1): 1)Complete Schedule B, pages 2 and 3 (for non-cash, if applicable) for any contribution of the greater of $5,000 or 2% of the amount shown on Form 990, Part VIII, line 1h. Schedule B contributions should be reported using the same basis that the Organization uses to create its books and records. This Schedule is NOT open to public inspection. 2)Ensure that Organizations exempt under any other IRC Section, complete Schedule B, pages 2 and 3 (for non-cash) for any contribution of $5,000 or more for the Organization s tax year. 3)Determine if non-cash contributions must be disclosed separately on Form 990, Part VIII, line 1g and/or on Schedule M. 4)Consider that the donation of tangible property may require the Organization to complete and sign certain sections of Form 8283 and/or monitor and track the use of a contributed item. The Organization may also be required to file Form 8282 when these items are subsequently sold. Organizations receiving these types of contributions should familiarize themselves with the requirements associated with the receipt of non-cash contributions. 307) If the Organization received non-cash contributions in excess of $25,000 OR if the Organization received contributions of art, historical treasures or other similar assets, the Organization should complete Schedule M. 308) Ensure that the Organization provided contemporaneous acknowledgements to all donors who contributed $250 or more. 309) Ensure that the Organization notified donors of the value of any goods provided by the Organization to the donor in exchange for $75 or more (quid pro quo contributions). 310) Consider that gifts to 501(c)(4) organizations may be viewed as taxable transfers (gifts) EXEMPT ORGANIZATION INCOME TAX 5

6 400) POLITICAL/LOBBYING ACTIVITIES DONE N/A 401) If the Organization engaged in political activity: 1) Consider the Organization s share of any political or lobbying activities performed by partnerships in which it is invested. 2) Consider the Organization s joint venture agreements for restrictions regarding political activities. 3) Consider that Organizations exempt under 501(c) (other than 501(c)(3)), must report monies earmarked for a separate segregated fund in Part I0c, line 5 Col. (c) of Schedule C. 402) If the Organization engaged in lobbying activity: 1) Consider the Organization s analysis of its lobbying activities for any exception to treatment as a lobbying expenditure. 2) Ensure that an Organization that is part of an affiliated group, (if electing under 501(h)) has completed the expenditure test as a standalone entity and as part of the combined group. 3) Ensure that the Organization is aware of the penalties under 6652(c) for underreporting of political or lobbying expense. 500) SCHEDULE D ISSUES DONE N/A 501) If the Organization acted as a fiscal sponsor, ensure that Form 990, Schedule D, Part I has been completed. 502) If the Organization maintained donor advised funds, ensure that Form 990, Schedule D, Part I has been completed. 503) If the Organization received or held a conservation easement, historical land area or historic structure, ensure that the Form 990, Schedule D, Part II has been completed. 504) If the Organization maintained collections of works of art, historical treasures or similar assets, ensure that the Form 990, Schedule D, Part III has been completed EXEMPT ORGANIZATION INCOME TAX 6

7 500) SCHEDULE D ISSUES DONE N/A 505) If the Organization held funds or other assets in an escrow or custodial account for other individuals or organizations, ensure that the Form 990, Schedule D, Part IV has been completed. 506) If the Organization provided credit counseling or debt repair/negotiation services, determine if the Organization s activities require it to complete Form 990, Schedule D, Part IV. 507) If the Organization directly or indirectly held assets in a temporary or permanent endowment or quasi-endowment, ensure that Form 990, Schedule D, Part V has been completed. 508) Every Organization required to complete Part X must provide the text of the note in, or footnote to, its financial statements, if applicable, regarding the organization s liability for uncertain tax positions under FIN 48 (ASC 740). 509) If the Organization reported an amount for land, buildings, equipment or other fixed assets on its Balance Sheet in Form 990, Part X, ensure that Form 990, Schedule D, Part VI has been completed. 510) If the value of other securities reported on the Balance Sheet in Part X of the Form 990 is equal to or more than 5% of the value of total assets, ensure that Form 990, Schedule D, Part VII has been completed. 511) If the value of the program-related investments reported on the Balance Sheet in Part X is equal to or more than 5% of the value of total assets reported on the Balance Sheet, ensure that Form 990, Schedule D, Part VIII has been completed. 512) If the value of the other assets reported on the Balance Sheet in Part X is equal to or more than 5% of the value of total assets, ensure that the Organization completes Form 990, Schedule D, Part IX. 513) Ensure that the detail for other liabilities reported in Form 990, Part X, line 25 was provided in Schedule D, Part X. 514) Consider that Organizations that receive separate, independent audited financial statements for the year, must complete Form 990, Schedule D, Parts XI, XII, XIII, and XIV. 515) Consider that Organizations that do not receive audited financial statements are not required to complete Parts XI, XII, and XIII EXEMPT ORGANIZATION INCOME TAX 7

8 600) PRIVATE SCHOOLS DONE N/A 601) Ensure that Organizations exempt as educational institutions as defined by 170(b) (1) (A) (ii) complete Form 990, Schedule E. 700) FOREIGN ACTIVITIES DONE N/A 701) If the Organization, either directly or indirectly through a disregarded entity or a joint venture, had aggregate revenues or expenses of more than $10,000 from foreign activities or foreign investments valued at $100,000 or more, the Organization must complete Form 990, Schedule F, Parts I and IV. 702) Consider that foreign activities include grants and other assistance, fundraising activities, unrelated trade or business activities, program services, investments, or maintaining offices, employees or agents for the purpose of conducting any such activities in regions outside the United States. 703) If the Organization made grants or provided other assistance of more than $5,000 to any particular foreign organization or government or to a particular U.S. organization for the understood purpose of engaging directly or indirectly in foreign activities, the Organization must complete Form 990, Schedule F, Parts II and IV. 704) Ensure that grants to Organizations for the benefit of specified foreign individuals have been reported in Part III rather than Part II. 705) If the Organization made a grant or provided other assistance of more than $5,000 to any particular foreign individual or to a particular U.S. individual for the understood purpose of engaging directly or indirectly in foreign activities, the Organization must complete Form 990, Schedule F, Parts III and IV. 706) Consider that forms other than Form 990 may be required as a result of the foreign activities. Possible forms include: 1) Form 3520, interest in a foreign trust. 2) Form 926, certain transfers to foreign corporations. 3) Form 5471, organizations with ownership in foreign corporations. 4) Form 8621, shareholders of PFIC s. 5) Form 8865, ownership interest in a foreign partnership. 6) Form 5713, operations in or related to any boycotting countries EXEMPT ORGANIZATION INCOME TAX 8

9 700) FOREIGN ACTIVITIES DONE N/A 707) Determine if the Organization is required to file FinCEN Form 114 (FBAR) electronically. Note the FBAR filing deadline is separate from the Form 990 filing deadline. 800) FUNDRAISING AND GAMING DONE N/A 801) If the Organization paid more than $15,000 for professional fundraising services, ensure that Form 990, Schedule G, Part I and Part IV have been completed, if applicable. 802) If the Organization had more than $15,000 of fundraising event gross income, including amounts classified as contributions from the fundraising events, ensure that Form 990, Schedule G, Part II has been completed. 803) If the Organization had more than $15,000 of gross income from gaming, raffles, bingo, pull-tabs, etc., ensure that Form 990, Schedule G, Part III and Part IV have been completed, if applicable. 900) HOSPITALS DONE N/A 901) Organizations operating one or more hospital facilities should ensure that: 1) The hospital completed the requirements in 501(r) for tax years beginning after March 23, ) The hospital completed Section A of Part V, Schedule H, Facility Information, for each of its facilities. 3) The hospital completed Section B of Part V, Schedule H. (Section B was optional for tax years beginning before March 24, 2012). 4) The hospital attached its audited financial statements to Form EXEMPT ORGANIZATION INCOME TAX 9

10 1000) DOMESTIC GRANTS DONE N/A 1001) An Organization making grants or providing other assistance of more than $5,000 to any government or organization in the United States, should ensure that: 1) The Organization completes Form 990, Schedule I, Parts I and II. 2) Schedule I, Part II, line 1 is completed for any specific recipient who received more than $5,000. 3) If no single recipient received more than $5,000, mark the box at the beginning of Part II indicating that no single recipient received more than $5,000; do not complete the per recipient information on Part II, line 1. 4) Check the instructions to determine whether supplemental information is required in Part IV. 1002) If the Organization made grants or provided other assistance of more than $5,000 to individuals in the United States: 1) The Organization must complete Form 990, Schedule I, Parts I and III. 2) Check the instructions to determine whether supplemental information is required in Part IV. 1100) TAX-EXEMPT BONDS DONE N/A 1101) If the Organization had a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the end of the Organization s tax year: 1) Consider that the organization may complete Schedule K using a 12-month period other than its tax year. 2) Ensure that the organization has procedures in place to monitor its private business use of its facilities EXEMPT ORGANIZATION INCOME TAX 10

11 1200) TRANSACTIONS WITH DISQUALIFIED PERSONS DONE N/A 1201) Determine if the Organization engaged in a transaction of any kind (grant, loan, sale, guarantee, payment of compensation for services not already disclosed in Form 990, Part VII, etc.) with a current or former officer, trustee, director, key employee, highest compensated employee or any other disqualified person or family member of any of those persons or an entity partially or completely owned by any of those persons. 1202) Determine if there was any kind of a personal or business relationship between any of the directors, trustees, officers, key employees or any other disqualified persons. 1203) Determine if the Organization engaged in an excess benefit transaction. 1300) SCHEDULE N ISSUES DONE N/A 1301) If the Organization liquidated, terminated, dissolved or ceased operations, see the instructions for Schedule N for required disclosures and attachments. 1302) If the Organization sold, exchanged, disposed of or transferred more than 25% of its net assets, see the instructions for Schedule N for required disclosures and attachments. 1400) RELATED ORGANIZATIONS DONE N/A 1401) If the Organization owned 100% of a disregarded entity, ensure that the Organization completed the appropriate parts of Schedule R. 1402) If the Organization was related to another entity, ensure that the Organization completed the appropriate parts of Schedule R EXEMPT ORGANIZATION INCOME TAX 11

12 1500) DIRECTOR/TRUSTEE/OFFICER/KEY EMPLOYEE/HIGHEST PAID EMPLOYEE COMPENSATION DONE N/A 1501) Ensure that the Organization disclosed all compensation paid to any current or former director, trustee, or officer, (including taxable and non-taxable amounts, cash and non-cash, vested and non-vested and the use of the Organization s assets), for any reason. 1502) Complete Schedule J if the sum of reportable and other compensation paid by the Organization and/or any related Organization to anyone in the Organization exceeded $150, ) Determine if any person listed by name in the return received or accrued compensation from any unrelated organization for services rendered to the Organization. See the instructions for Part VII for disclosure requirements. 1504) Ensure that the Organization reported average hours worked per week for each person listed in Part VII, Form ) Ensure that any person listed as an officer/director is not also listed as a key employee or highest compensated employee (although a person may be a director/trustee and an officer, these categories are exclusive of all the other categories). 1506) Ensure that the Organization s top management official and top financial official have been identified as officers. 1507) Ensure that every element of compensation received or accrued (vested or nonvested) by any person listed in the return has been disclosed in Part VII (see the instructions for threshold amounts). 1508) Ensure that the five highest-paid service providers who received more than $100,000, have been disclosed in Part VII B EXEMPT ORGANIZATION INCOME TAX 12

13 1500) DIRECTOR/TRUSTEE/OFFICER/KEY EMPLOYEE/HIGHEST PAID EMPLOYEE COMPENSATION DONE N/A 1509) Ensure that the receipt of any and all of the following compensatory items received by any person listed in Form 990, Part VII, section A, has been disclosed: 1) First-class or charter travel 2) Travel for companions 3) Tax indemnification and gross-up payments 4) Discretionary spending account 5) Housing allowance or residence for personal use 6) Payments for business use of personal residence 7) Health or social club dues or initiation fees 8) Personal services ( e.g., maid, chauffeur, chef) 1600) DIRECTOR/TRUSTEE/OFFICER/KEY EMPLOYEE/HIGHEST PAID EMPLOYEE COMPENSATION DONE N/A 1601) Ensure that the Organization included Business Codes in the appropriate column of line 2, Part VIII. 1602) Determine if income from program related investments has been reported on Line 2, Part VIII. 1603) Review the Organization s website and marketing materials for unrelated business income, political/lobbying activities, changes to or additions to existing programs and/or any activities that might jeopardize the Organization s exempt status. 1604) Determine if the Organization is required to file form 990-T for business activities that are regularly carried on and unrelated to the Organization s exempt purpose EXEMPT ORGANIZATION INCOME TAX 13

14 1600) DIRECTOR/TRUSTEE/OFFICER/KEY EMPLOYEE/HIGHEST PAID EMPLOYEE COMPENSATION DONE N/A 1605) Determine if the Organization has UBI from debt financed rental estate, royalties or pass-through entities. 1606) Ensure that all S corp. income/loss has been reported as UBI. 1607) Ensure that income from affinity programs has been reported as royalty income. 1608) Ensure that the Organization maintained books and records to substantiate the depreciation expense. 1609) Determine the nature of any income described as miscellaneous revenue. 1610) Ensure that grants, scholarships, fellowships and similar payments have been reported appropriately on line 1, 2, or 3 of Part IX of Form ) Determine if compensation paid to other disqualified persons has been reported separately from compensation paid to other employees/ independent contractors. 1612) Ensure that payments made to non-employees for services have been reported on line 11, Part IX rather than line ) Ensure that expenses properly reported on lines 1 through 23 have been reported on those lines rather than on line 24, Other expenses EXEMPT ORGANIZATION INCOME TAX 14

15 1700) OTHER FILINGS AND RELATED MATTERS DONE N/A 1701) Determine that the Organization has filed all employment, excise and/or income taxes timely. 1702) Determine if the Organization is required to make tax payments electronically. 1703) Determine if the Organization has sponsored a retirement plan or other-wise participated in the deferral of income by any of its employees. 1704) Determine if the Organization analyzed its employee/service provider relationships to determine if it has classified those relationships accurately. 1705) Determine if the Organization is aware of and complied with the public disclosure requirements associated with its returns and exemption documents. 1706) Determine if the cover/transmittal letter reflects the product that is being delivered. 1707) Determine if the client arranged for the dissemination of the Form 990 to all voting members of the Board prior to filing. 1708) Determine if penalties under Circular 230 have been considered. 1709) Ensure that the Organization has been notified of the use of third party service providers. 1710) Determine if the Organization is required to file Form 8886 to disclose a tax shelter (see Reg ) EXEMPT ORGANIZATION INCOME TAX 15

16 1800) BALANCE SHEET DONE N/A 1801) Ensure that receivables from officers/directors/trustees, key employees/ highest compensated employees/disqualified persons have been reported separately from other receivables on line 5 or ) Ensure that loans payable to officers/directors/trustees/key employees or highest compensated employees have been reported in Schedule L. 1803) Consider that Part X, Form 990 no longer requires filers to report their share of assets of joint ventures and partnerships using Schedules K-1. The assets may be reported based on the information in the books and records. S 2015 American Institute of CPAs. All rights reserved EXEMPT ORGANIZATION INCOME TAX 16