Instructions For Schedule A (Form 990 Or 990-Ez) - 2005 Page 2


In columns (c) through (e), show all
See Pub. 525, Taxable and
include the additional information
cash and noncash forms of compensation
Nontaxable Income, for more information.
discussed under those Parts; otherwise,
for each listed employee whether paid
the return may be considered incomplete.
Part II-A. Compensation of
currently or deferred. The organization
Enter the total expenses paid or
may also provide an attachment to
incurred in connection with the lobbying
the Five Highest Paid
explain the entire year 2005
activities described on line 1. The amount
compensation package for any person
Independent Contractors
of expenses you enter must equal the
listed in Part I.
amounts on line 38, Part VI-A, or line i,
for Professional Services
Part VI-B. If columns (a) and (b) of line 38
Column (c)
Complete Part II-A for the five highest
are both completed, enter both amounts
Enter salary, fees, bonuses, and
paid independent contractors (whether
separately on line 1.
severance payments received by each
individuals or firms) who performed
Substantial part test. In general, a
listed employee. Include current year
personal services of a professional nature
section 501(c)(3) organization may not
payments of amounts reported or
for the organization and, in return,
devote a substantial part of its activities to
reportable as deferred compensation in
received over $50,000 for the year from
attempts to influence legislation. Under
any prior year.
the organization.
the substantial part test, if such an
Column (d)
Also show the number of other
organization engages in substantial
independent contractors who received
lobbying activities, the organization will
Include in column (d) all forms of deferred
more than $50,000 for the year for
lose both its tax-exempt status and its
compensation and future severance
performing professional services but who
ability to receive tax-deductible charitable
payments (whether or not funded,
are not individually listed in Part II-A.
contributions. Except for churches, certain
whether or not vested, and whether or not
church affiliated organizations, and
the deferred compensation plan is a
Independent contractors are persons
private foundations, an organization that
qualified plan under section 401(a)).
who are not treated as employees for
loses its section 501(c)(3) status because
Include in this column payments to
employment tax purposes. Independent
it did not meet the substantial part test will
welfare benefit plans on behalf of the
contractors may be individuals or firms.
owe an excise tax under section 4912 on
employee. Such plans provide benefits
Professional independent contractors
all of its lobbying expenditures. Managers
such as medical, dental, life insurance,
would generally include attorneys,
of the organization may also be jointly
severance pay, disability, etc.
accountants, auditors, health care
and severally liable for this tax.
Reasonable estimates may be used if
professionals, investment advisors, and
precise cost figures are not readily
professional fundraisers.
Expenditure test. As an alternative
to the substantial part test, eligible public
The organization may, at its discretion,
charities may elect the expenditure test of
provide an attachment to explain the
Unless the amounts are reported in
section 501(h). The expenditure test
entire year 2005 compensation package
column (c), report as deferred
generally permits higher limits for
for any person listed in Part II-A.
compensation in column (d), salaries and
lobbying expenditures than allowed under
other compensation earned during the
Fundraising fees exceeding $50,000
the substantial part test. Electing public
period covered by the return, but not yet
should be reported in Part II-A, but not
charities are subject to the lobbying
paid by the date the organization files its
reimbursements for amounts paid by the
expenditure definitions of section 4911,
fundraiser to others for printing, paper,
which are generally more liberal than the
envelopes, postage, mailing list rental,
Column (e)
definitions under the substantial part test.
etc. Part II-A is intended for the fee
Section 4911 applies only to public
Enter in column (e) both taxable and
portion of payments to contractors, not for
charities that made a valid section 501(h)
nontaxable fringe benefits (other than de
any expense reimbursements.
election by filing Form 5768, Election/
minimis fringe benefits described in
Revocation of Election by an Eligible
section 132(e)). Include expense
Part II-B. Compensation of
Section 501(c)(3) Organization To Make
allowances or reimbursements that the
the Five Highest Paid
Expenditures To Influence Legislation.
recipients must report as income on their
separate income tax returns. Examples
Electing public charities. If the
Independent Contractors
organization is an electing public charity,
for Other Services
Amounts for which the recipient did not
you must complete Part VI-A of this form.
account to the organization,
Nonelecting public charities. If the
Complete Part II-B for the five highest
Allowances that were more than the
organization checked “Yes” but is not an
paid independent contractors (whether
payee spent on serving the organization,
electing public charity, you must complete
individuals or firms) who performed
Part VI-B and attach a statement giving a
services, that were other than services of
Payments made in connection with
detailed description of the organization’s
a professional nature for the organization
indemnification arrangements, the value
lobbying activities.
and, in return, received over $50,000 for
of the personal use of housing,
the year from the organization. For a
All charities, both electing and
automobiles, or other assets owned or
definition of independent contractor, see
nonelecting, are absolutely
leased by the organization (or provided
Part II-A, above.
prohibited from intervening in a
for the organization’s use without charge),
Also show the number of other
political campaign for or against any
as well as any other taxable and
independent contractors who received
candidate for an elective public office. If a
nontaxable fringe benefits.
more than $50,000 for the year for
charity does intervene in a political
Example. S is not a key employee. S
performing such services but who are not
campaign, it will lose both its tax-exempt
receives a salary of $35,000 and a $3,000
individually listed in Part II-B.
status and its eligibility to receive
bonus. S also receives company-paid
tax-deductible charitable contributions.
The organization may include an
medical, dental, and life insurance
Both the organization and its managers
attachment that explains the 2005
benefits for his family of $12,000. During
are subject to the tax on political
compensation package for any person
the year, S received family educational
expenditures under section 4955.
listed in Part II-B.
benefits of $5,000. Enter in column (c)
Line 2. See Part IV, Definitions, for the
$38,000; enter in column (d) $12,000;
Part III. Statements About
meaning of the term family member.
enter in column (e) $5,000. Total
compensation of S is $55,000, even
Lines 2a through 2e. These lines apply
though his salary and bonus are only
to both sides of a listed transaction.
$38,000. S should be listed in Part I as
Line 1. If you checked “Yes” on this line,
Reporting is required, for example,
one of the highest paid employees.
you must complete Part VI-A or VI-B and
whether the exempt organization is a
Instructions for Schedule A (Form 990 or 990-EZ)


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