Schedule L reports in two different directions: its primary reach extends to three categories of transactions with a filer’s “Interested Persons”: loans outstanding with them, grants or assistance being provided to them, and business transacted with them. It also reports on whether any prohibited (and thus subject to excise tax) intersections have occurred with impermissible parties. This introduction to Schedule L is designed to ensure that preparers will not “lose their minds” over this schedule’s inherent complexity. The materials and the author/instructor provide a Plain English explanation of who are the parties the 990 considers “Interested Persons” and when (and why) their intersections with the filer are made the subject of this schedule’s “sunlight”. This session will aid preparers in both understanding what each of Schedule L’s parts is looking for, and in appreciating the importance of accessing data necessary to these parts’ completion.
Overview of the methodology that Schedule L employs in its Parts II, III and IV to cast sunlight on the fact of that an, Interested Person“ (IP), Remained engaged with the filer in loan arrangements, or was the beneficiary of grants or assistance from the filer, or had business transactions with the filer that exceeded thresholds. Introduction to the five categories by which IP status vests in reporting on non-excise-tax reached intersections (i.e., the five categories that apply across each of Schedule L’s Parts II-IV), Explanation of the dollar-amount thresholds employed solely in Schedule L’s Part IV (which is where disclosure of “business transactions” with IPs is required), along with preparation tips for this part, Summary of Schedule L’s Part III instructions as to what constitutes the provision of grants or assistance to an IP Overview of the special rule educational institutions have allowing them to not disclose the names of their scholarship or fellowship recipients in Part III, The reach of Schedule L’s Part II reporting on loans outstanding with IPs, along with preparation tips for this part, Quick review of the Internal Revenue Code section 4958 excise tax scheme that 501(c)(3), (c)(4), and (c)(29) filers are subject to should they have conveyed “excess benefit” in any transaction with a disqualified person; and timing and disclosure considerations behind Schedule L’s Part I.
Recognize that there is a hierarchy within Schedule L’s Parts II, III and IV by which the three types of intersections are to be reported. Appreciate the far reach of the five uniform categories that are used to define baseline IPs in Parts II-IV. Ability to distinguish when Part IV requires multiple business transactions with a particular IP to be reported based on each individual transaction’s amount rather than based on all transactions’ aggregated amounts. Identify the separate Part IV threshold that applies for reporting the fact of compensation being provided to a family member of an IP. Familiarity with identifying what constitutes a disclosable loan in Part II and the fact of a reportable grant or assistance in Part III.
Eve Borenstein is a partner in Borenstein and McVeigh Law Office (BAM!), a Minnesota law firm that is the base of Eve’s national tax practice and services nonprofits and tax-exempt organizations exclusively.
Separate from the law firm, Eve operates a teaching and speaking consultancy offering instruction on nonprofit and exempt organization mandates, Eve Rose Borenstein, LLC.
Eve received her law degree from the University of Minnesota in 1985 and thereafter embarked on exempt organizations tax work at a “Big 8” accounting firm. From 1989-2003 she maintained a solo practice serving tax-exempt non-profit corporations, and in 2004 created the BAM Law firm with nonprofit corporate counsel Ellen W. McVeigh. From her law firm’s practice and through her teaching and speaking, Eve works to assist diverse nonprofit organizations with tax-exemption qualification, corporate planning and compliance. The bulk of her legal practice is representing exempt organizations before the Internal Revenue Service and/or State regulators on audit, qualification and classification issues; through 2009 she had represented more than 850 organizations before the IRS.
Eve volunteers extensively with multiple professional committees, including the American Bar Association’s Tax Section Committee on Exempt Organizations, from which she serves as a liaison to the American Institute of Certified Public Accountants’ Exempt Organization Technical Resource Panel. Through such service, and individually, Eve was integrally involved in the IRS’ Redesign of the Form 990. She was chosen by the IRS to be one of two private practitioners on the IRS Tax Talk Today TV broadcast in November 2008 dedicated to the Redesign of the Form 990, and has appeared multiple times since with IRS officials on educational panels concerning that Form.
Eve was also one of the original non-IRS collaborators in the Form 1023 Revision Project that culminated in that Form’s October 2004 “make over”. She enjoys teaching and speaking and is committed to “helping the sector (and its advisors) do it right the first time!”
Non-Member Price $99.00
Member Price $79.00