Instructions For Schedule A (Form 990 Or 990-Ez)

welfare benefit plans on behalf of the

Both the organization and its managers

Part III. Statements About

employee. Such plans provide benefits

are subject to the tax on political

such as medical, dental, life insurance,

Activities

expenditures under section 4955.

severance pay, disability, etc.

Line 2. See Part IV, Definitions, for the

Line 1. If you checked “Yes” on this line,

Reasonable estimates may be used if

meaning of the term “family member.”

you must complete Part VI-A or VI-B and

precise cost figures are not readily

provide the required additional

available.

Lines 2a through 2e. These lines apply

information; otherwise, the return may be

to both sides of a listed transaction.

Unless the amounts are reported in

considered incomplete.

Reporting is required, for example,

column (c), report as deferred

whether the exempt organization is a

compensation in column (d), salaries and

Enter the total expenses paid or

payer or payee, buyer or seller, lender or

other compensation earned during the

incurred in connection with the lobbying

borrower.

period covered by the return, but not yet

activities described on line 1. The amount

paid by the date the organization files its

of expenses you enter should equal the

Line 2d. Compensation or Repayment.

return.

amounts on line 38, Part VI-A, or line i,

If the only compensation or repayment

Part VI-B. If columns (a) and (b) of line 38

relates to amounts the organization

Column (e)

are both completed, enter both amounts

reported in Part V of Form 990, or Part IV

Enter in column (e) both taxable and

separately.

of Form 990-EZ, check “Yes” and write

nontaxable fringe benefits (other than de

“See Part V, Form 990,” or “See Part IV of

Substantial part test. In general, a

minimis fringe benefits described in

Form 990-EZ,” on the dotted line to the

section 501(c)(3) organization may not

section 132(e)). Include expense

left of the entry space.

devote a “substantial part” of its activities

allowances or reimbursements that the

to attempts to influence legislation. Under

Line 3a. Scholarships, etc. The term

recipients must report as income on their

the “substantial part” test, if such an

“qualify” in line 3a means that

separate income tax returns. Examples

organization engages in substantial

organizations or individuals will use the

include:

•

lobbying activities, the organization will

funds the organization provides for

Amounts for which the recipient did not

lose both its tax-exempt status and its

charitable purposes described in sections

account to the organization,

•

ability to receive tax-deductible charitable

170(c)(1) and 170(c)(2).

Allowances that were more than the

contributions. Except for churches, certain

payee spent on serving the organization,

The term “qualify” also means that

church affiliated organizations, and

and

individual recipients belong to a charitable

•

private foundations, an organization that

Payments made in connection with

class and the payments are to aid them.

loses its section 501(c)(3) status because

indemnification arrangements, the value

Examples include:

it did not meet the “substantial part” test

•

of the personal use of housing,

Helping the aged poor;

will owe an excise tax under section 4912

•

automobiles, or other assets owned or

Training teachers and social workers

on all of its lobbying expenditures.

leased by the organization (or provided

from underdeveloped countries; and

Managers of the organization may also be

•

for the organization’s use without charge),

Awarding scholarships to individuals.

jointly and severally liable for this tax.

as well as any other taxable and

nontaxable fringe benefits.

Expenditure test. As an alternative

Line 3b. Section 403(b) Annuity Plan.

See Pub. 525, Taxable and Nontaxable

to the “substantial part” test, eligible

Indicate whether you have a section

Income, for more information.

public charities may elect the

403(b) annuity plan available for your

“expenditure test” of section 501(h). The

employees.

Part II. Compensation of

expenditure test generally permits higher

limits for lobbying expenditures than

Line 4a. Check “Yes” to Line 4a if the

the Five Highest Paid

allowed under the “substantial part” test.

organization maintained separate

Independent Contractors

Electing public charities are subject to the

accounts for any participating donor

lobbying expenditure definitions of section

during the tax year even though the donor

for Professional Services

4911, which are generally more liberal

did not make a contribution for that year

Complete Part II for the five highest paid

than the definitions under the “substantial

or the donor has not exercised his or her

independent contractors (whether

part” test. Section 4911 applies only to

right to make a suggestion on the

individuals or firms) who performed

public charities that made a valid section

charitable use of funds in the account or

personal services of a professional nature

501(h) election by filing Form 5768,

its distribution for charity.

for the organization and, in return,

Election/Revocation of Election by an

Community foundations may maintain

received over $50,000 for the year from

Eligible Section 501(c)(3) Organization To

separate accounts for participating donors

the organization. Examples of such

Make Expenditures To Influence

within the meaning of this question.

contractors include attorneys,

Legislation.

accountants, doctors, and professional

Line 4b. Answer “Yes” to this question if

Electing public charities. If the

fundraisers.

the organization provides any of the

organization is an electing public charity,

following types of credit counseling and/or

Show also the number of other

you must complete Part VI-A of this form.

debt management activities:

independent contractors who received

•

Educating and/or counseling

more than $50,000 for the year for

Nonelecting public charities. If the

consumers, in person, in writing, or using

performing such services but who are not

organization checked “Yes” but is not an

electronic means;

individually listed in Part II.

electing public charity, you must complete

•

Helping consumers consolidate debts;

Part VI-B and attach a statement giving a

The organization may, at its discretion,

•

detailed description of the organization’s

Negotiating with creditors on behalf of

provide an attachment to explain the

lobbying activities.

consumers to lower interest rates, waive

entire year 2004 compensation package

fees, adjust balances, or restore

for any person listed in Part II.

All charities, both electing and

acceptable credit ratings;

•

nonelecting, are absolutely

Fundraising fees exceeding $50,000

Offering, selling, or managing debt and/

prohibited from intervening in a

should be reported in Part II, but not

or loan consolidation services and

CAUTION

political campaign for or against any

reimbursements for amounts paid by the

programs or down payment assistance

candidate for an elective public office. If a

fundraiser to others for printing, paper,

services;

•

charity does intervene in a political

envelopes, postage, mailing list rental,

Acting as an escrow agent for debtors;

campaign, it will lose both its tax-exempt

etc. Part II is intended for the fee portion

•

status and its eligibility to receive

of payments to contractors, not for any

Participating in creditor “Fair Share”

tax-deductible charitable contributions.

expense reimbursements.

arrangements.

-2-

Instructions for Schedule A (Form 990 or 990-EZ)

Instructions For Schedule A (Form 990 Or 990-Ez) - 2004 Page 2

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