Form 990: Functional Expense Reporting and Grantmaking

Author: Jane Searing

CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

This on-demand course offers a practical examination of the compliance issues related to Form 990 reporting functional expenses and properly reporting foreign and domestic grants.

This session focuses on understanding functional expense reporting for tax exempt organizations on Part IX of Form 990. Charitable organizations and organizations exempt under 501(c)(4) must classify their expense schedule by function. Understanding the definitions of program, management and fundraising categories is essential to correctly preparing this Schedule. Funders and many state charity officials pay close attention to this data. Even seasoned return preparers sometimes struggle with classification of expenses based upon often complicated facts and shared uses of facilities and other resources. Understanding the details of the instructions and definitions is critical to getting it right.

Join one of the country's leading tax-exempt organization practitioners, Jane M. Searing, CPA, M.S. Taxation, for this practical examination of the compliance issues related to Form 990 reporting for functional expenses and properly reporting foreign and domestic grants. Ms. Searing is a co-author of the Form 990 Compliance Guide published by Wolters Kluwer.

Publication Date: May 2017

Designed For
This program is beneficial for CPAs, enrolled agents, tax return preparers, tax attorneys and financial advisors who work with not-for-profit organizations and their donors.

Topics Covered

  • Functional expense categories
  • Identifying and removing book expenses not allowed for tax reporting
  • Key Expense Reporting Items
  • Properly categorizing grants that are domestic and foreign grants
  • Fees for Services
  • Occupancy
  • Travel and Government Officials
  • Other Expenses
  • Functionalization: Three Functional Columns
  • Schedule I: Grants and Assistance
  • Organizational Grant Detail
  • Schedule F: Foreign Activities, Grants Reporting, and Other Activities
  • Additional Foreign Filing Questions

Learning Objectives

  • Recognize how to classify expense categories for tax-exempt organizations
  • Define program, management, and fundraising categories properly
  • Identify and properly categorize domestic and foreign grants
  • Differentiate how or why an organization may choose to allocate expenses
  • Recognize why the IRS looks for outliers and internal inconsistencies within Form 990 to determine if an organization is conforming to regulations
  • Identify how rental expenses can be reported on Form 990
  • Recognize when an organization would be required to report grant information on Schedule I
  • Describe ways an organization that has grantmaking activities in a foreign region maintain and substantiate the amount of grants
  • Identify when other expenses require a disclosure on Schedule O
  • Recognize the type of compensation normally paid to a disqualified person
  • Describe what occupancy expenses include
  • Differentiate which organization are required to functionalize expenses on Form 990 Part IX
  • Identify which expense should be categorized as a primary purposes to induce donors to give money
  • Recognize when an organization would not be required to complete Form 990, Schedule F
  • Differentiate when grants are classified as domestic or foreign
  • Identify when an organization helps functionalize expenses
  • Recognize when Schedule I is triggered by information

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None

Registration Options
Quantity
Fees
Regular Fee $55.00

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