Form 990, Schedule L reports in two different directions - it typically reaches 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. The L also serves as a “turn them in” reporting obligation when an impermissible transaction (one thus subject to excise tax) has occurred: a “disqualified person” has been provided “excess benefit”. This session’s address of what the Schedule L requires in each direction is designed to help preparers not “lose their minds” over the schedule’s inherent complexity. The instructor describes in plain detail, who the parties the 990 considers “Interested Persons” as well as when (and why) their intersections with the filer are the subject of this schedule’s “sunlight”. The two-fold goal is to not only further an understanding of what each of Schedule L’s parts is looking for, but to also foster an appreciation of how to access data necessary to these parts’ completion.
Reviewing both: (a) the methodology that Schedule L employs in Parts II - IV to cast sunlight on the fact that an “Interested Person” (IP) engaged with the filer in loan arrangements; or was the beneficiary of grants from the filer; or had business transactions with the filer that exceeded de minimis thresholds; and (b) the five categories by which IP status vests for purposes of these three parts. Explanation of the dollar-amount thresholds applicable in Schedule L’s Part IV when disclosing “business transactions”, and preparation tips for applying these thresholds. Summary of Schedule L’s Part III instructions as to what constitutes the provision of grants or assistance to an IP, and overview of the special rule educational institutions have that allows them to not withhold the names of scholarship or fellowship recipients. Schedule L’s Part II reporting on loans outstanding with IPs, along with preparation tips. Quick intro to the Code section 4958 excise tax scheme that 501(c)(3) and (c)(4) filers are subject to, should they have conveyed “excess benefit” in any transaction with a disqualified person; and timing and disclosure considerations in play with Schedule L’s Part I reporting.
Public accounting tax and audit staff, nonprofit organization treasurers, CFOs, and finance advisors.
Recognize hierarchy of Schedule L’s Parts II, III and IV in reporting intersections with IPs. Appreciate the far reach of the five uniform categories that are used to define baseline IPs for Parts II-IV reporting. Distinguish when Part IV requires multiple business transactions with a particular IP to be reported either because of the amount of each individual transaction or based upon 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. Have 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 $109.00
Member Price $89.00