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Department of the Treasury

Internal Revenue Service

Instructions for Schedule L

(Form 990 or 990-EZ)

Transactions With Interested Persons

•

State whether the transaction has been

Section references are to the Internal

corrected.

Revenue Code unless otherwise noted.

Specific Instructions

Excess benefit transaction. An excess

General Instructions

For Parts I, II, and III, report all

benefit transaction generally is a

transactions regardless of amount. Part

transaction in which an applicable

Note. Terms in bold are defined in the

IV instructions provide individual and

tax-exempt organization directly or

Glossary of the Instructions for Form 990.

aggregate reporting thresholds below

indirectly provides to or for the use of a

which reporting is not required with

Purpose of Schedule

disqualified person an economic benefit

respect to an interested person. Parts III

the value of which exceeds the value of

and IV contain separate reasonable

Schedule L (Form 990 or 990-EZ) is used

the consideration received by the

by an organization that files Form 990 or

effort instructions which organizations

organization for providing such benefit.

Form 990-EZ to provide information on

may rely on to satisfy reporting

Applicable tax-exempt organizations are

certain financial transactions or

requirements for those Parts.

generally limited to organizations which

arrangements between the organization

There is a separate definition of

(without regard to any excess benefit) are

and disqualified persons under section

interested person for each part of the

section 501(c)(3) public charities or

4958 or other interested persons.

schedule, so a person who is an

section 501(c)(4) organizations, or

Schedule L is also used to determine

interested person for one part may not be

organizations that had such status at any

whether a member of the organization’s

an interested person for other parts of the

time during the 5-year period ending on

governing body is an independent

schedule. Each reportable transaction is

the date of the excess benefit transaction.

member for purposes of Form 990, Part

to be reported in only one part of

Section 501(c)(3) and section

VI, line 1b.

Schedule L, as described below.

501(c)(4) organizations should refer to the

Supplemental information. Use

instructions for Form 990, Part IV, line 25

Part I. Excess Benefit

Schedule O (Form 990), Supplemental

(or Form 990-EZ, Part V, line 40b) before

Information to Form 990, if the

Transactions

completing Part I. For more information

organization needs additional space to

on excess benefit transactions, section

explain a transaction or to provide

(To be completed by section 501(c)(3)

4958, and special rules for donor advised

additional detailed information.

and (c)(4) organizations.)

funds and supporting organizations, see

Line 1. For each excess benefit

Appendix G and Pub. 557, Tax-Exempt

Who Must File

transaction involving an organization

Status for Your Organization.

The chart at the bottom of this page sets

described in section 501(c)(3) or

Line 2. Enter the amount of taxes

forth which organizations must complete

501(c)(4), regardless of amount:

•

imposed under section 4958 on

all or a part of Schedule L and must

Identify the disqualified person(s) that

organization managers or disqualified

attach Schedule L to Form 990 or Form

received an excess benefit in the

persons, whether or not assessed by the

990-EZ. If an organization is not required

transaction;

•

IRS, unless abated. Form 4720, Return of

to file Form 990 or Form 990-EZ but

Identify the organization manager(s), if

Certain Excise Taxes Under Chapters 41

chooses to do so, it must file a complete

any, that participated in the transaction,

and 42 of the Internal Revenue Code,

return and provide all of the information

knowing that it was an excess benefit

must be filed to report and pay the tax on

requested, including the required

transaction;

•

excess benefit transactions.

schedules.

Describe the transaction; and

Part II. Loans to and From

Type of filer

IF you answer “Yes” to . .

THEN you must file . . .

Interested Persons

Section 501(c)(3) or (4)

Form 990, Part IV, line 25a or

Schedule L, Part I.

organization

25b (regarding excess benefit

Report details on loans, including salary

transactions)

advances and other advances and

receivables (referred to collectively as

Section 501(c)(3) or (4)

Form 990-EZ, Part V, line 40b

Schedule L, Part I.

“loans”), as described in Form 990, Part

organization

(regarding excess benefit

IV, line 26 or Form 990-EZ, Part V, line

transactions)

38a. Report only loans between the

All organizations

Form 990, Part IV, line 26

Schedule L, Part II.

organization and interested persons that

(regarding loans)

are outstanding as of the end of the

organization’s tax year. Report each loan

All organizations

Form 990-EZ, Part V, line 38a

Schedule L, Part II.

separately and regardless of amount.

(regarding loans)

In addition to loans originally made

All organizations

Form 990, Part IV, line 27

Schedule L, Part III.

between the organization and an

(regarding grants)

interested person, report also loans

originally between the organization and a

All organizations

Form 990, Part IV, line 28a, 28b, Schedule L, Part IV.

or 28c (regarding business

third party or between an interested

transactions)

person and a third party that were

transferred so as to become a debt

Cat. No. 51522J

Instructions For Schedule L (Form 990 Or 990-Ez) - Transactions With Interested Persons - 2008

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