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Handling Complex Related Org Issues: Schedule R's Parts II-V

  • 10/28/2022
  • 1:30 PM - 4:00 PM
  • Webinar - CPA Crossings

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This session comprises one of four Form 990 Master Classes available to those wanting intermediate-to-advanced training on the 990's most difficult arenas. Once an initial identification scan of a filer's related organizations has been undertaken, two directions of FUN result! FIRST, three key inquiries need be made of managers who are likely to be disclosed on Core Form Part VII-A: (1) amounts of compensation provided to them by such entities in the calendar year that ends within the filer's tax year; (2) whether they served in the tax year as Board members of any tax-exempt related organization; and (3) for filer’s “current” Trustees/Directors, whether any "Schedule L-type transactions" existed in the tax year with them and any related organization (or via their family members or “35% controlled entities”). SECOND, the filer must determine if a related organization is a "512(b)(13) controlled entity” (also, 501(c)(3) filers need note if any are related organizations are tax-exempt entities under a non-501(c)(3) subsection) and report certain transactions undertaken with such entities. There is much complexity here, and it is not atypical at this point to have other related organizations identified (with the same inquiries required again!) This session addresses these data discovery needs and speaks to the resulting Schedule R reporting from a 360-degree perspective.

This event may be a rebroadcast of a live event and the instructor will be available to answer your questions during the event.

Learning Objectives:

After attending this presentation you will be able to...

  • Identify baseline scans necessary to root out when one or more related organizations may be present
  • Appreciate the sensitive data-mining to be undertaken with the filer’s managers and how to address concerns (and disclosures) that result from same
  • Recognize the multiple Form 990 preparation arenas that are impacted by the presence of one or more related organizations

Program Content:

The major topics that will be covered in this class include:

  • Quick refresher of what conditions yield "parent,” “subsidiary" or "sibling" status in the case of a party who is a nonprofit/nonstock entity
  • Review of the definition of "control" applied to: stock corporations, entities taxed as a partnership, and trusts 
  • Deep dive into the nuances of “indirect control” under IRC section 318’s constructive ownership rules
  • Finding “sibling” organizations due to “joint control” in place under multiple parties
  • Handling bifurcated “questionnaire needs” with a filer’s Trustees/Directors and employees regarding Board service on other nonprofits versus those necessary with current and former Part VII-A managers (including High 5s) regarding compensation
  • Addressing related organization impacts on the count of independent Directors (query made on Core Form Part VI, Line 1) and with respect to potential excise tax exposure under IRC section 4960    
  • Disclosure specifics for the R's Parts II-IV, and those relating to “transactions” general address on Part V’s Line 1 and via dollar amount when Line 2’s relevant triggers apply

Designed for: Public accounting tax and audit staff, and nonprofit organization's Treasurers, CFOs and other finance/compliance advisors

Level: Intermediate

InstructorEve R. Borenstein, J.D.

Developer: Eve R. Borenstein, J.D.

CPE Credits: 2.5

Area of Study: Taxes

Prerequisite: Single course – EB9FDN12 (Finding & Reporting Filers’ Related Organizations) or similar CPE training, or extensive experience with the relevant instructions and their application


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