A “related organization” for Form 990 purposes is a unique concept that does not tie to generally employed business or accounting definitions. Identifying such entities is a crucial first preparation step called for in the 990 instructions. Indeed, the presence of “related organizations” impacts the managers reported on the Core Form’s Part VII-A and various other 990-reporting disclosures! This 990 “term-of-art” is deceptive, starting out with “parents,” “subsidiaries,” and “siblings,” but applying a unique and extremely broad definition of “control”. This course fully illuminates, with real-world explanations, both key “basics” and common nuances that readers and preparers of the 990 need be aware of in testing for “control” of a nonprofit organization or when control is not direct but may be “indirect.” Multiple examples covering the precepts in this realm are provided. While the focus here is on properly identifying a filer’s related organizations, the disclosures required on Form 990’s Schedule R are also covered.
The reach of “parent-subsidiary” and “sibling” status when the party who is the subject of “control” is a nonprofit/nonstock entity [note this applies both to ascertaining whether the filer is “controlled by” a related organization OR itself “controls” another nonstock entity]. Understanding what is considered “control” when a potential related organization is: a stock corporation versus a partnership or an LLC taxed as a partnership versus a trust. The challenges of both finding “directly-controlled” related organizations versus imputing related organization status through “indirect control.” The two automatic status categories of related organizations: supporting organization connections (one entity being a 501(c)(3) with 509(a)(3) sub-classification from connection to another entity) and VEBA-unique categories. Overview information sought on Schedule R’s Parts II-IV once the presence of one or more related organizations is ascertained. Schedule R Part V disclosure demands when a related organization is a “controlled entity” under, and thus subject to, Code section 512(b)(13)’s UBIT-reach. Overview of the Schedule R Part V disclosure requirements for 501(c)(3) filers who have a related organization itself recognized as tax-exempt under 501(c)(x) other than 501(c)(3).
Public accounting tax staff and audit personnel. Nonprofit organization’s treasurers and CFOs. Finance or compliance consultants serving 990 filers.
Identify the principles by which control vests in determining parent (of subsidiary), subsidiary (of parent), or sibling status between the filer and a not-for-profit organization. Identify how control vests over an entity that is a stock corporation. Apply the principles that yield “commonly controlled” related organizations (i.e., sibling organizations). Distinguish the baseline information required when reporting existence of related organizations in Schedule R’s Parts II (tax-exempt entities), Part IV (corporations or trusts), and Part III (partnerships). Recognize the info disclosure sought in Schedule R’s Part V with respect to TYPES of transactions with related organizations and when specific dollar disclosure is required.
Eve Borenstein, Eve Rose Borenstein LLC
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