Invite Reviewers & Additional Users This Tax Season

The tax season is nearly upon us with the IRS filing deadline for exempt organizations just a little over a month away. Before the stress starts to settle in, ExpressTaxExempt offers you convenient ways to get some help directly from your tax-exempt group without hauling multiple form copies.

Manage Additional Users
Once you’ve entered your organization details, you can create user accounts for members or key employees with limited access to oversee your 2016 Form 990. Create your additional accounts with these steps:

1. 1. Click the “My Account” tab
2. 2. Click “Manage Additional Users.”
3. 3. Click the “Add Additional User” button
4. 4. Enter the user’s details (name, phone number, email) and select the type of access
5. 5. Click “Create User” button

Your additional user will receive an email containing a password which they can use along with their email address to log into your account.

Important: There are two types of access you can set for your users - “View” and “Edit.” “View” allows users to see everything in your account without the ability to make any changes. “Edit” can grant your users limited permissions such as paying and transmitting to the IRS or receiving notification emails.

Manage Reviewers and Approvers
After generating your Form 990 copy, you can invite board members or other officers to review your return before e-filing your 990 form to the IRS. These requests grant access to a secure web portal where members can add comments, make suggestions, or verify with electronic signatures. Send your invitations with these steps:

1. 1. Click the “My Account” tab
2. 2. Click “Manage Reviewers and Approvers.”
3. 3. Click the “Add User” button
4. 4. Enter user’s details and select the tax year of the 990 form
5. 5. Click “Share Return” button

Your recipients will get an email containing a link to the secure portal and a password to log in. Unlike additional users, your reviewers won’t have access to your account - they can only see the copy of your completed return.

If you have any questions about adding users or inviting reviewers from your account, contact our live US-based support team at 704.839.2321, or with support@ExpressTaxExempt.com. Eliminate tax season stress completely with our in-depth filing assistance by scheduling a Premium Support session before the May 15 deadline directly from your ExpressTaxExempt account.

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Revenue, Expenses, & Grants from Program Services

The IRS requires large and mid-size exempt organizations to describe three of their most major program services when reporting Form 990 or 990-EZ tax returns.

These services typically measure or rank by the total expenses spent by the organization. If a tax-exempt group has less than three program services, they can just describe the activities of each available service.

Descriptions of program services can include many variables such as how many clients the organization served, days of care provided, publications issued, or the number of sessions held. Along with stating the objective of the service, the IRS also needs to know all revenue, expense, and grant amounts associated with each program.

Revenue
Section 501(c)(3) and 501(c)(4) organizations are responsible for reporting any income coming directly from activities of each program service. Fees for services or sales from goods related to each activity are all considered revenue. These amounts should include the program service revenue listed on Part VIII, Column A, Line 2 of the 990 form; it can also contain other amounts from Part VIII, Line 1 through 3 such as related or exempt function revenue.

Important: Revenue should also include any unrelated business income from activities exploiting an exempt function - advertising in a journal would be an example. You shouldn’t combine any charitable contributions and grants as revenue coming from program services.

Expenses & Grants
For each program service listed on Part III, Line 4a through 4c, 501(c)(3) and 501(c)(4) organizations have to enter total expenses that you reported on Part IX, Column B, Line 25. And list the total grants and allocations within those expenses that are marked on Part IX, Column B, Line 3 through 11 of the 990 form.

Other Program Services
If you have more than three significant program services, you can continue to report on the Schedule O. The IRS won’t require a detailed description of these other services like it did the first three. But you are responsible for listing the total revenues and expenses - including grants - exactly how you did with your organization’s larger program services.

With IRS-authorized ExpressTaxExempt, organizations can easily enter information about their program services in minutes. Our 990 form e-file application also generates any additional services onto your Schedule O and allows you to enter revenue, expenses and grant amounts for each entry.

Speak with your local tax professional or advisor if you have any detailed questions about your organization’s program services. For any questions or assistance with reporting your program activities with our e-file service, contact our US-based customer support team at 704.839.2321 or email us with support@expresstaxexempt.com.

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Intangible Religious Benefits from Charitable Contributions

The IRS has rules of recordkeeping and substantiation for donors giving charitable contributions along with disclosure rules for charities receiving those donations. Individuals or groups that donate to exempt organizations can typically write-off those tax-deductible donations on their annual return; however, there are a few other things required.

Deduction Requirements from Contributions

Donors must obtain a bank record or written receipt from the organization for any monetary contributions to claim the amount on their federal income tax returns. A written acknowledgment is also mandatory for any single contribution of $250 - cash or noncash - given to a nonprofit or charity. And charitable organizations should provide written proof to donors who receive over $75 of goods or services in return for the contribution.

Goods and Services
Written acknowledgments for goods and services exchanged for donations must contain a description of what the organization provided and an estimated monetary value of items or services given to the donor. Contributors should also subtract the estimated amount from the total fair market value of the donation to know the deduction value. Goods and services typically include cash, benefits, property, services, or privileges. There are exceptions - one of which is intangible religious benefits.

Intangible Religious Benefits
The IRS does not require a description or value of goods included with a written acknowledgment from faith-based organizations that only provide intangible religious benefits to donors. The statement needs only to say the organization provided such benefits. A tax-exempt organization operating exclusively for religious purposes can only grant this type of benefit; it’s usually something that you can't sell as a consumer transaction.

Examples of intangible religious benefits include admission to religious ceremonies or a de minimis tangible benefit such as wine used for religious services. Benefits that the IRS doesn’t consider intangible or faith-based include education towards a recognized degree, consumer goods, or travel services.

Religious organizations, such as churches, don’t typically need to file annual 990 returns with the IRS. But if they choose to do so, they must submit a complete return which may require a Schedule B for contributions equal to or greater than $1,000 and were used exclusively for religious purposes. You should also list donations used outside of religious purposes that are over $5,000.

If you have any questions regarding substantiation and disclosure requirements or about intangible religious benefits, we recommend seeking a tax professional for assistance. You can inquire about Schedule B and Form 990 information by calling the IRS Tax-Exempt Hotline at 877.829.5500.

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Can Nonprofits Still Get Taxed?

When you hear the words “nonprofit” or “tax-exempt,” you typically think of a public charity or group doing some charitable work. And any money made, either through contributions or services, is exempt from taxes. That’s how you would think nonprofits work, but recently in the state of Washington, this concept went under scrutiny.

In 2015, a small animal rescue organization located in Eatonville, Washington, was contacted by a tax information specialist from the state’s Department of Revenue. The rescue group received notification that the sale of animals isn’t exempt from taxes - meaning that any adoption fees are subject to retail sales tax and Retailing Business and Occupation (B&O) tax. Based on this information, the animal rescue realized they would have to pay nearly $20,000 in back taxes.

According to Washington’s Department of Revenue, nonprofit groups in the state get taxed like any other business; they are also responsible for B&O tax on revenues from business activities, sales tax on goods and services purchased as consumers, and they must charge a sales tax for items and services offered. In this particular situation, the only exemption is for a government or quasi-government group like humane societies providing similar services.

Other private animal shelters and advocates have spoken how animal adoptions are not sales but require fees for pet licensing; they’ve also exclaimed how exceptions for government-sponsored animal shelters are double standards. Back in Eatonville, the founder of the small animal rescue explained that revenue from adoption fees goes directly to providing veterinary and dental services for animals in their care. And the organization is maintained entirely by volunteers.

While it is quite possible for nonprofit organizations to have taxes imposed, under normal circumstances, it depends on how the revenue gets generated. If a tax-exempt group makes money from activities or services that have nothing to do with their exempt purpose, it gets taxed. Likewise, revenue spent on anything non-related to the exempt purpose gets taxed. And you also have your normal wage taxes for any paid employees or officers.

The Washington state Department of Revenue has since then vetoed their decision to impose retail taxes on adoption fees; however, this resolution has remained inconsistent throughout the state. In 2016, a bill was introduced in the Senate suggesting tax improvements and licensing laws governed by the Department of Revenue. The bill presents a formalized policy prohibiting retail sales tax from animal adoption fees charged by nonprofit animal organizations.

If you have questions or concerns about taxable revenue generated by your nonprofit or charity, please speak with a local tax professional - you may have to file additional returns along with your IRS 990 form to correctly report taxed income.

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How to File a Schedule F for Foreign Activities

Any exempt organization with activities conducted outside the United States need to report information about those international actions on their IRS Form 990.

Activities can include grants and other assistance, program-related investments, fundraising activities, program services, and more.

Reporting this type of information is done using Schedule F and is for various geographic locations like Antarctica, Central America and the Caribbean, East Asia and the Pacific, Europe, and much more.

Here are some helpful guidelines to follow from the IRS when filing a Schedule F:

Part I - General Information on Activities Outside the United States
The first section of Schedule F is for organizations with aggregate revenues or expenses greater than $10,000 from grantmaking, fundraising, business, investment, or program services outside of the United States. The IRS doesn't require any expenditure from services provided in U.S. for recipients inside and outside the U.S.

For Line 1, indicate whether the organization maintains records to substantiate the following:

• The monetary value of its grants and other assistance
• The recipients’ eligibility for grants or assistance
• The selection criteria used to award grants or assistance

Responses to Line 2 will go on Part V of the Schedule F. You should describe the organization’s procedures for monitoring the use of grants and assistance outside of the U.S. - this can include details from periodic reports and accountings, field investigations, or third-party audits.

Line 3 requires you to enter details for each type of activity conducted any time during the filling year for each region. If the organization has many activities per area, list each one separately for the same location name. Report any investments by regions as well; however, they should be separate from other activities listed in the same area. And you can list all investments from a particular region as a single entry.

It is not necessary to report any foreign investments indirectly held through a pass-through entity in the U.S. because the entity is not physically in a foreign location. You also won’t need to list any investments from entities located overseas that trade on a U.S. stock exchange.

Important: Listing funds transferred to a non-interest bearing account outside of the United States for program services is not necessary for Line 3; however, once those funds are used, the IRS requires you to list them on Line 3, Column F.

Complete the chart for Line 3 as follows

• Column A - List each region in which your organization conducts its foreign activity
• Column B - List the number of offices in each region
• Column C - List the number of employees, agents, and independent contractors in each region
• Column D - List the type of activity conducted in the region (i.e. fundraising, program services, etc.)
• Column E - Give a description of the particular type of service for any program services listed in Column D
• Column F - List total expenditures and investments in each region

With Lines 3a through 3c for Column B, report the total number of offices in foreign locations maintained by the organization during the tax year - don’t count any one office more than once. You’ll also enter the total number of employees and the overall sum of expenditures and investments on Lines 3a through 3c for their respective columns.

Part II - Grants and Other Assistance to Organizations or Entities Outside the United States
Exempt organizations with any recipients outside of the U.S. that have received grants or assistance of at least $5,000 need to be reported in this section. On Line 1, you need to list those recipients in the chart provided. Enter each organization or entity on separate lines. If you require more space for additional beneficiaries, you can attach duplicate copies as needed.

In this section, list cash or noncash grants and assistance based on the accounting method from your organization’s financial statements - you’ll need to describe this process later on in Part V. You should also report grants no matter the source of the funds or whether the organization chose the recipient.

Important: Completing Columns A or B in the chart isn’t necessary.

Finish the rest of the chart for Line 1 as follows

• Column C - Enter the region where the principal foreign office of the recipient organization is or where grant funds are getting used
• Column D - Describe the purpose of grant funds with specific terms like general support, school, construction, or medical supplies rather than broad words like educational or religious
• Column E - Enter the total dollar amount of cash grants, in U.S. dollars, for each recipient
• Column F - Describe how your organization disburses cash for each recipient (i.e. cash payment, check, money transfer, etc.)
• Column G - Enter the Fair Market Value of noncash properties in U.S. dollars
• Column H - Enter a description for any noncash goods or assistance listed
• Column I - Describe the method of valuation for noncash properties

On Line 2, report the total number of recipients from your list on Line 1 that is either recognized as a charity by the foreign country, recognized as tax-exempt by the IRS, or has provided a section 501(c)(3) equivalency letter. With Line 3, enter the total number recipients that are not classified as described in Line 2.

Part III - Grants and Other Assistance to Individuals Outside the United States
Similar to Part II, this section is for exempt organizations who have given at least $5,000 in grants and assistance directly to foreign individuals or foreign groups for the benefit of a particular foreign individual.

You need to complete the chart in Part III the same way you did for Part II, Line 1. Be aware that for Part III, Column A, you’re going to use the same terms that you used for Part II, Line 1, Column D. The IRS also needs an explanation in Part V for any estimated numbers you come up with for Part III, Column C.

Part IV - Foreign Forms
Any exempt organization filing a Schedule F must complete Part IV by answering each question from Line 1 to Line 6. It could be possible to answer each question as “No,” if applicable. But for any question answered “Yes,” the IRS requires you to the file the additional form listed with the question.

Part V - Supplemental Information
The final section within Schedule F is for you to provide detailed explanations for the following parts you answered earlier:

• Part I, Line 2 - Methods for monitoring the use of your organization’s grants and assistance outside the U.S.
• Part I, Line 3, Column F - Methods used for accounting expenditures on the organization’s financial statements
• Part II, Line 1 and Part III - Methods used for accounting cash grants and noncash assistance on the organization’s financial statements
• Part III, Column C - Methods used to estimate the number of recipients

You can also supply any other explanations or descriptions as needed, but for anything written in Part V, you should write out the corresponding part and line of the schedule. For any tax-intensive questions regarding your organization’s activities outside of the U.S., we recommend speaking with a certified professional or contacting the IRS directly at 877.829.5500.

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Are Donations to Animal Rescue Shelters Tax Deductible?

Like with many other nonprofits or charities, if you make a donation, you can typically deduct the value of your contribution from your annual tax bill.

To do so, the nonprofit group you’re giving to must be officially recognized by the IRS as a section 501(c)(3) organization. You can check an organization’s tax-exempt status by searching the IRS Exempt Organization Select Check.

Are Donations to Animal Rescue Shelters Tax Deductible?

When you’re filing, you will also need to itemize the amount of your donation - this may not be worth the extra effort if you only gave a little here and there. But if you gave a significant amount throughout the year, it is best to itemize the deduction on your personal tax return.

Here are 3 things to consider when donating to an animal rescue shelter:

1. Pet Adoption vs. Donation

A common misconception most people make is thinking that payment for adopting from an animal shelter is the same as making a donation. Only donations in which the donor receives no goods or services in return can count towards a deduction.

In this case, you’re giving money in exchange for your pet - that's more of a service charge rather than a charitable contribution. However, if you paid over the cost of adoption or gave a gift outside of the adoption transaction, that counts as a valid charitable contribution.

2. Donation Value

If you’re donating items, you’ll need to estimate the fair market value for each of those items. There’s no one particular method for finding fair market values - you can look through local shops or online stores to figure out prices of similar items in the open market. For special unique gifts, such as a hand-woven, nap basket for kittens, you can get it appraised for the market value.

3. Written Proof of Donation

When you’re donating to an official 501(c)(3) organization, it’s common practice to receive a physical receipt for your donation. If your total contribution amount is at least $250, the IRS requires you to submit proper documentation along with your tax return. Like other receipts from nonprofits or charities, it should contain the description of the contribution and the amount along with the name and address of the organization.

If you received a gift or benefit from the animal shelter in return for your donation, include a description of the gift on the written receipt. Any reciprocated gifts with a monetary value should be subtracted from the amount of your contribution when reporting. A paper certificate or “Thank You” card typically don’t have cash values, but a coupon or gift card does.

Animal rescue shelters can report received contributions over $5,000 to the IRS by using a Schedule B along with their Form 990 or 990-EZ tax return. Taxpayers that want to claim an itemized deduction for their donations to an animal shelter can complete a Schedule A with their IRS 1040 form.

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How to Report Lobbying Expenditures on IRS Form 990/990-EZ

Reporting additional information about political campaign activities or lobbying activities requires exempt organizations to file a Schedule C along with their IRS Form 990 or 990-EZ. 501(c)(3) organizations needing to complete a Schedule C are those that

• Participate in lobbying activities
• Have a Section 501(h) election in effect during the tax year
• Engage in political campaign activities either on behalf or opposition to candidates for public office

Public charities with valid section 501(h) elections can spend a certain amount of its exempt purpose expenditures to influence without paying taxes or losing exemption status. Part II-A of the Schedule C allows any nonprofit organization with a 501(h) election in effect to report lobbying expenditure - even if the organization didn’t engage in lobbying activities for that filing year.

Affiliated Groups
The first section of Part II-A confirms whether the filing organization belongs to an affiliated group with Box A. If so, you need to complete both columns for this section:

• Column A for the filing organization’s totals
• Column B for the affiliated group totals

Tax-exempt groups with limited control provisions need to check Box B and should only complete column A for this section. Organizations that don’t check Box A should not check Box B either.

Later, in Part IV, you can provide a list of each affiliated group member’s name, address, EIN, and expenses. You also need to indicate which members made the election under 501(h), and include the share of the excess lobbying expenditures for each electing member on your list.

Limits on Lobbying Expenditures
The second section is to determine if your organization’s current year lobbying expenditures are subject to tax under section 4911. If so, the IRS requires you to file Form 4720 and pay the excise tax. Complete Lines 1a through 1i in Column A, and any for Column B, if applicable.

For Line 1a, enter the amount the organization spent on grassroots lobbying communications, and then for Line 1b, enter the expense for direct lobbying communication. Add Line 1a and 1b to get your amount for Line 1c. Enter all other amounts, minus lobbying, that your organization spent to achieve its exempt purpose. And then add Line 1c and 1d to get Line 1e, which is the organization's total exempt purpose expenditures.

Follow the table provided on the Schedule C to answer Line 1f and enter 25 percent of that amount on Line 1g. For Line 1h, subtract your value of Line 1g from Line 1a - if there is a negative difference, just enter zero. On Line 1i, subtract Line 1f from Line 1c and put zero if the amount is negative.

If you don’t have any excess lobbying expenditures on Line 1h or 1i for Column B, you should treat each electing member of the affiliated group as having none. But if there are amounts listed for Column B on those lines, then each electing member has that amount for excess lobbying expenditures. In that case, the IRS requires each electing member to file Form 4720 and pay the tax on its share of the affiliated group’s excess lobbying spending.

You can enter proportionate shares in Column A for Line 1h, 1i, or both. And in Part IV, you can show what amounts apply to which group member. For Line 1j, indicate whether your organization filed Form 4720 to report section 4911 tax for the filing year if the amount on Line 1h or 1i is other than zero.

Lobbying Expenditures During 4-Year Averaging Period
Line 2 is to determine whether your organization exceeded lobbying spending limits during a 4-year averaging period. Any exempt organization with a lobbying expenditure election in effect during the filing year must complete Columns A through E for Lines 2a through 2f except for the following circumstances:

• If the filing year is the first year the organization is tax-exempt, you won’t need to complete any of Lines 2a through 2f
• If any of the tax years were before the organization became exempt, you wouldn't need to complete Lines 2a through 2f
• If the filing year is the first year the organization has a section 501(h) election in effect, then you must complete Line 2a for Columns D and E
• If the filing year is the second or third year the organization’s first section 501(h) election is in effect, then you’re required to complete only the columns for the years the election was in effect and enter the totals for those years in Column E

Important: Check the Schedule C Instruction Sheet for more detailed information about these exceptions.

Complete Line 2a through 2f as follows for the filing year and applicable prior years based on the Schedule C for each respective year:

• Line 2a - Enter the amount from Part II-A, Line 1f
• Line 2c - Enter the amount from Part II-A, Line 1c
• Line 2d - Enter the amount from Part II-A, Line 1g
• Line 2f - Enter the amount from Part II-A, Line 1a

Once you finish, you need to enter the total for each line in Column E. If your organization belongs to an affiliated group, you should input the appropriate group totals from Column B, Lines 1a through 1i when entering Line 2a through 2f. If you have any questions regarding details about your organization’s section 501(h) election, spending limits, or affiliated groups, please contact a tax professional or reach out to the IRS Tax-Exempt Hotline at 877.829.5500.

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Are Public Libraries Considered Nonprofit Organizations?

In general, public libraries do not receive 501(c)(3) exemption status from the IRS; however, tax officials recognize them as a governmental unit under the 501(c)(3) Internal Revenue Code which allows exemption from federal taxes.

For grant applications from foundations or charitable organizations, government entities usually need to provide proof of its tax-exempt or charity status.

Are Public Libraries Considered Nonprofit Organizations?

Tax-Exempt Status for Libraries

A public library can use its federal taxpayer identification number, commonly known as its Employer Identification Number (EIN), to identify itself. The IRS can also distribute a “governmental information letter” upon request which proves the library’s exemption from federal taxes. The letter also explains how the entity is applicable for deductible contributions and income exclusion.

When a new public library gets commissioned by an administration of public education, it is automatically exempt from state taxes and typically doesn’t pay federal taxes because of its governing entity status. In particular circumstances, a library can request to qualify as a 501(c)(3) organization instead of a government entity but has to submit a Form 1023 to receive a determination from the IRS.

While operating as a government entity, libraries can enlist another 501(c)(3) organization to accept funds or donations on its behalf - these nonprofit organizations are typically friends groups, community foundations, or library associations. They use public contributions and grants towards charity, education, the promotion of literature, and related administrative costs. Among other activities, these exempt organizations' charitable efforts are for improving public libraries, promoting literacy, and awarding scholarships.

Please Read: File Form 990-N, 990-EZ, 990, 990-PF Securely

Tax Deductible Contributions for Public Libraries

Public libraries and their associations are eligible to receive tax-deductible charitable contributions. The IRS requires a receipt written to donors who contribute over $250. You can give receipts or a “thank you” for lesser amounts if you choose, but the primary reason is for those planning to deduct their donation from their tax bill.

The tax receipt should contain the following information:

• Name and address of the organization
• Date the contribution was given
• The amount of a cash contribution or the description of a non-cash donation
• A statement of goods or services that are given in return for a contribution, if necessary

If there’s a donor that gives numerous small donations throughout the year, and their total amount is over $250, they will also need a written receipt for tax purposes. 501(c)(3) organizations or associations that are accepting contributions on behalf of a library will need to report individual donations of $5,000 or greater on Schedule B of their Form 990.

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Reporting Bad Debt, Medicare, & Collection Practices with Schedule H

Hospitals with 501(c)(3) exemption status must report information about activities, policies, and community benefit of its hospital facilities and other non-hospital health care buildings it operated during the tax year. Those who are submitting a 990 form for hospitals can provide this information using a Schedule H.

With a Schedule H, you can also list any bad debt expenses, Medicare, and collection practices. Here are some guidelines to follow when reporting your information.

Part III of Schedule H breaks down into three sections:

Section A - Bad Debt Expenses
In this section, the IRS requires you to

• Report combined bad debt expense
• Provide an estimate of how much bad debt reasonably belongs to patients that likely qualify for financial assistance through the hospital’s policy, if applicable
• Provide logic for what portion of bad debt comes from community benefit

In Line 1, you should indicate whether the hospital reported any bad debt expense listed with Statement No. 15 from the Healthcare Financial Management Association. Even though some hospitals rely on Statement 15 in reporting audited financial statements, the American Institute of Certified Public Accountants (AICPA) doesn't commonly use it, and the IRS doesn’t require organizations to use it for financial assistance costs.

On Line 2, enter the amount of the hospital’s bad debt expense. For patients’ bills partially written as bad debt, you only need to include the proportionate amount. You should also include any share of bad debt expense from any joint ventures the hospital participated in during the tax year. Later, in Part VI, you can describe the method used the determine your bad debt amount.

With Line 3, list the estimated amount of bad debt from Line 2 that comes from patients that qualify for the hospital’s financial assistance policy. You can also use Part VI to explain how you determined the amount or include portions of the bad debt as a community benefit, if applicable.

Line 4 requires you to provide a footnote in Part VI referring to the hospital’s financial statements describing bad debt expense or the page number where this note is located in the attached financial statements. If the financial statements don’t include a footnote discussing bad debt expense, "accounts receivable,” or “allowance for doubtful accounts,” you need to include a statement about how the organization’s statements don’t reflect the information and also explain how the hospital possibly accounts for bad debt.

Section B - Medicare
This section requires you to combine

• Allowable costs to provide services reimbursed by Medicare
• Medicare reimbursements attributable to such costs
• Medicare surplus or shortfall

You should only include allowable costs and reimbursements reported in the hospital’s Medicare Cost Report for the filing year. You won’t need to provide Medicare-related expenses or revenue that you already listed in Part I of the Schedule H.

On Line 5, enter the total income received from Medicare - this includes payments for indirect medical education (IME), Medicare disproportionate share hospital (DSH) revenue, and other amounts paid to the hospital from the Medicare Cost Report. Don’t repeat any costs related to subsidized health services, research, or direct graduate medical education (GME) that you reported in Part I.

In Line 6, list the Medicare allowable costs of care from the amount you have on Line 5. Once again, you’re excluding any subsidized health services, and GMEs that you have in Part I. The Schedule H instructions from the IRS has a worksheet available to calculate your amount. Hospitals with multiple Medicare provider numbers should combine the costs reported in the Medicare Cost Reports for each provider and put the total sum on Line 6.

With Line 7, you just need to subtract Line 6 from Line 5 - a normal amount is a surplus while a negative value is a shortfall. And on Line 8, indicate the available method used to determine the amount on Line 6.

Section C - Collection Practices
The last part only asks you to report the hospital’s written debt collection policy. For Line 9a, indicate whether or not the hospital utilized a debt collection policy for the tax year. Your policy can be either a written billing and collections policy or a written financial assistance policy detailing the hospital’s actions for non-payment situations.

If you answered “Yes” for Line 9a, continue to confirm whether the collection policy contains provisions on collection practices for patients qualifying for financial assistance. If so, describe in Part VI the methods listed for such patients and if those practices also apply to other types of patients.

The IRS requires you to completely fill out 990 forms and any mandatory schedules regarding your exempt organization. If you have any tax-related questions, please consult with a certified professional or contact the IRS Tax-Exempt Hotline at 877.829.5500 for information about your organization.

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How to Donate Tax Deductible Books to Libraries

One way to reduce the clutter around your office or home is to donate any old books you have to your local library - not only are you giving to a great cause, but you could also be lowering your annual tax bill.

Because the federal government classifies most libraries as nonprofit educational institutions, they are qualified charities that can receive tax-deductible, charitable contributions.

You can find information about your local library’s tax-exempt status through the IRS charity database, or speak with the library’s administrator. Here are some tips about donating books to a qualified, tax-exempt library:

Valuation of Books
Under normal circumstances, the IRS allows you to deduct the fair market value of your donated books. There aren’t many federal rules about what comprises a fair market value of an item; it’s typically an agreed price in the open market that’s considerably lower than the original value.

You can search second-hand shops or online stores to find prices for similar used items. In exceptional cases, your book may be worth more than fair market value. For instance, the author signed the cover or a page. You may want an appraisal for the book’s actual value.

Proper Recordkeeping
Like many other deductions, you need to provide proof to claim the credit. According to experts, if your contribution is less than $250, the library should give you a receipt displaying its name and address, the date you contributed, and a description of your donation. Your personal record should list the description along with how much you paid for the books and their fair market values.

With donations over $250, your receipt from the library needs to include any benefits or gifts given in return for your contribution. If your “Thank You” gift has monetary value, the IRS requires you to deduct the amount from the value of your donation. And any contributions totaling over $5,000 in books requires an appraisal for the fair market value.

Itemize Your Deduction
To properly claim a deduction for your book donations, you must itemize what you gave. Choosing standard deductions depends on your filing status and the standard changes for inflation each year - you typically want to itemize deductions if the amount is going to be larger than standard. But the choice is ultimately up to you - if you only donated a couple of novels that were just lying around, it may not be worth the extra effort to itemize.

Reporting Donations and Contributions
Taxpayers can report the value of their book donations on Schedule A, Line 17 of their personal tax return. If you’re donating a substantial monetary value, you may need to file additional forms and include an appraisal signature. For libraries reporting their received contributions, you can list donations worth $5,000 or more from any one donor on the Schedule B of your annual 990 form.

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Can Religious Organizations Become Tax-Exempt?

In Section 501(c)(3) of the Internal Revenue Code, one of the exempt purposes that is specified is “religious.” Because of constitutional issues, Treasury Regulation doesn't have a precise definition of "religious" like other functions such as charitable, educational, or scientific.

According to the IRS, the First Amendment typically prohibits the Internal Revenue Service from judging what can or cannot be a religion. As far as tax-exempt groups are concerned, the IRS lists the following as 501(c)(3) religious organizations:

• Churches
• Nondenominational ministries
• Integrated auxiliaries of churches
• Conventions and associations of churches
• Interdenominational and ecumenical organizations
• Other entities with the principal purpose of studying or advancing religion

The IRS also grants 501(c)(3) exemption status for religious organizations that primarily participates in the following activities:

• Distributing a newspaper devoted to religious news, articles, or editorials
• Organizing religious retreats for diverse Christian denominations where members use recreational facilities for limited amount of time and free of charge

Because 501(c)(3) regulations state that organizations must operate exclusively for one or more exempt purposes, it is possible for religious groups to not qualify for exemption status if they significantly endorse a nonexempt purpose. For instance, the following activities can cause a religious organization to be ineligible for tax exempt status:

• Producing literature for profit that has little to no connection with the religious beliefs of the organization
• Conducting a religious retreat facility that caters to recreational and social activities rather than religious

It’s also common for organizations to have activities to serve more than just one purpose. For religious groups, they can also qualify for 501(c)(3) status as an organization operating primarily for educational or charitable purposes.

Churches are typically different from other types of religious organizations - the federal government automatically recognizes them as tax-exempt without reviewing a Form 1023. But there are various conditions that the IRS considers when determining a church for federal tax purposes. These are, but not limited to

• An established place of worship
• A formal code of doctrine and discipline
• A recognized belief and form of worship
• A regular congregation of religious services
• A distinct legal existence of the organization
• An organization comprised of ordained ministers
• A precise and accurate clerical government and religious history
• A membership system exclusive of any other churches or denomination

Like many other tax-exempt organizations, the IRS still requires churches to follow standard 501(c)(3) regulations such as no private inurement and no significant lobbying. The main difference between churches and other tax-exempt groups is that churches are not required to file an annual 990 form. For churches that choose to submit a nonprofit tax return, your gross receipts will determine which 990 form to file.

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Tax Deductible Contributions to Nonprofit Schools

Taxpayers can claim deductions towards their annual tax bill from donations they make to recognized 501(c)(3) organizations. Qualified 501(c)(3) groups typically include nonprofit schools operating solely for literary and education purposes.

But if the school significantly participates in activities that are unrelated to its charitable purposes, then the donation may not be tax deductible.

Here are some relevant guidelines from the IRS about donating contributions to your local nonprofit schools:

Value of School Donations
When filing your personal taxes, you can deduct the monetary value of cash or items you donated to a nonprofit school during the tax year. The process requires you to determine the fair market value of the donation on the day you gave it away.

There are various ways to find the valuation based on the type of item, and while the IRS won’t endorse one method over the other, they firmly state that the value must accurately indicate pricing that the item could sell for in an open market. An example would be donating clothes - you could check local thrift shops to find out how much the clothes would sell for or find prices from online stores selling similarly conditioned clothing.

Receiving Benefits from Nonprofit School
If the school gives you a gift or some benefit in return for your contribution, then the IRS requires you to reduce the value of your donation by the value of the gift you received from the school. The gift may be something of little to no monetary value such as a certificate, card, or plaque - in such a case, you won’t have to reduce your donation. But if the school happens to give you a $50 shopping card, you’ll need to subtract that amount from the value of your contribution.

Proof of Contribution and Penalties
Beware of filing overvalued charitable contributions. The IRS charges 20% of the underpaid tax from a valuation that exceeds 150% of its actual value and 40% from valuations exceeding 200% of normal value.

Furthermore, the IRS can deny your deduction if you don’t have proper documentation. You are responsible for maintaining a record of all your contributions - cash or items. You should have a description of the contribution and the name of the organization that received it. If your donation was cash, you should provide a bank statement, canceled check, or receipt. For large cash contributions, usually over $250, the IRS requests a written acknowledgment or receipt from the organization before deducting the donation.

Claiming tax deductible contributions towards nonprofit schools is only possible through itemizing your personal expenses. Taxpayers can claim itemized deductions on Schedule A of IRS Form 1040 if total deductible expenses are greater than standard deductions for the tax year. And for schools needing to report received contributions, you can do so by submitting a Schedule B with your IRS 990 form.

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How Schools Can Acquire 501(c)(3) Tax-Exempt Status

It’s typical for schools and Parent-Teacher Association (PTA)/Parent-Teacher Organization (PTO) to be recognized as a 501(c)(3) organization and have tax-exempt status. However, there is a common misunderstanding when a school has 501(c)(3) status, but the PTA/PTO does not and vice-versa.

Both groups are eligible to apply for tax-exempt status, and with it comes benefits from being a 501(c)(3) organization. Here is some important information for schools or PTAs/PTOs interested in becoming tax-exempt.

Exemption Status for Schools
Schools usually receive a tax identification number (TIN) from the IRS - this number works much like a regular social security number, so there isn’t any tax exemption implied with it. The IRS typically views public schools as government entities in which they are automatically exempt from federal income tax.

Even though schools are automatically tax-exempt, that doesn’t mean the IRS recognizes them as 501(c)(3) groups. Like many other organizations, schools must complete an application to receive 501(c)(3) status from the federal government. Any organization seeking exemption status has to file IRS Form 1023 - if approved, the IRS mails a “Determination Letter” that identifies the organization as a 501(c)(3) group.

You can ask your school’s principal whether or not it has 501(c)(3) status - the determination letter from the IRS is mostly likely filed in the school or district office.

Exemption Status for PTAs/PTOs
A PTA/PTO can operate independently from the school - in such cases, the PTA/PTO is not automatically tax-exempt and will need to file a 1023 form to apply. Conversely, if the PTA/PTO is storing its funds using the school’s tax identification number, then the organization is seen as an extension of the school.

Most parent-teacher groups use their school’s TIN thinking that it’s common; however, experts explain that as long as the organization’s money is not from an account using the school’s TIN, then their group classifies separate from the school. If it is separate, the PTA/PTO can register for its own tax identification number.

There are a few services available for PTAs/PTOs to automatically register as a 501(c)(3) tax-exempt organization without submitting a Form 1023 or paying any filing fees. These services can also assist with getting a federal TIN, state incorporation, and 990 returns for your group. After receiving 501(c)(3) status. Donors may ask for a copy of the determination letter - this letter ensures your organization is a federally recognized charity and that charitable contributions towards your PTA/PTO are tax deductible.

Why Apply for Section 501(c)(3) Status
Other than preventing income taxes imposed on revenue earned by your school or PTA/PTO, there are more benefits with receiving 501(c)(3) status. With an exemption status, you can request for an increased number of grants - public and private donors usually require tax-exempt status for funding which can bring in more money and resources for the school.

Organizations that are recognized as 501(c)(3) legally exist as separate entities. Key members and employees typically aren’t held directly responsible for debts from the organization though special circumstances may apply. And with any litigation event, courts can only access assets that belong directly to the organization - not from individual members.

The most common advantage is that purchases are exempt from state sales tax. Keep in mind that regulations may vary from state to state, so check with your nonprofit association for more information. And once your organization or school receives its tax-exempt status, remember to stay compliant with IRS rules and file your 990 form each year.

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Tax-Exempt Hospitals Must Comply with Section 501(r) Regulations

Section 501(r) regulations provide guidelines on how hospitals retain their tax-exempt status. These requirements were implemented to the Internal Revenue Code by the Patient Protection and Affordable Care Act back in 2010. Failing to comply with the following rules will cause hospitals to lose their tax exemption:

• Meeting the Community Health Needs Assessment (CHNA) conditions of Section 501(r)(3)
• Following the Financial Assistance Policy (FAP) necessities of Section 501(r)(4)
• Ensuring that charges for emergency and other medical care for patients with FAP don’t surpass amounts typically billed to patients with insurance
• Preventing any outstanding payment collections before making rational efforts to determine if the patient qualifies for assistance under FAP

Other penalties include a $50,000 excise tax towards hospital organizations failing to meet the Community Health Needs Assessment for the filing year.

Regulations imposed by Section 501(r) went into effect for the taxable year starting after December 31, 2015, and applies to hospital organizations - including government hospital organizations - seeking tax-exempt recognition under Section 501(c)(3). Some government hospitals aren’t responsible for filing IRS Form 990 or submit CHNA information with a 990 form; however, they are still required to make their CHNA and FAP reports publicly available.

Even though failure to comply with Section 501(r) regulations may cause the IRS to revoke tax-exempt status from a hospital, federal officials consider the following facts before revocation:

• The primary reason for failure
• The importance and nature of the failure
• Whether or not the hospital failed requirements in the past
• The number, extent, and significance of facilities that failed if applicable
• Whether the hospital had practices and procedures in place to ensure overall compliance before failing
• Whether the hospital quickly corrected the failure and enforced any safeguards to prevent future failures
• Whether staff regularly followed compliance practices and procedures and the failure happened from some mistake or oversight

Overall, any omissions from a report or errors in operational requirements that are minor, or otherwise accidental due to reasonable causes, are not seen as failing to meet regulations.

An Accountable Care Organization (ACO) is exempt from following Section 501(r) guidelines, but multiple medical facilities are allowed to duplicate the same FAP and other policies as long as it’s the same for each facility. Furthermore, separate hospitals within the same community can perform a joint community health needs assessment and create a joint strategy meeting those goals.

If a health system operates multiple hospitals and one facility fails to meet requirements, that failure will not affect the exemption status of the overall health organization. The IRS may impose a corporate hospital facility tax towards the non-compliant facility for the year it failed compliance. Operations from the failed facility are not seen as unrelated trade or business nor will finances for the non-compliant hospital be affected.

Experts recommend board members of nonprofit hospitals to review regulations from Section 501(r) and carefully examine their healthcare policies to ensure compliance. And remember to file the required 990 form, if applicable, along with the Schedule H.

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Reporting Endowment Funds with Form 990

On Part IV, Line 10 of IRS Form 990, you must answer if your exempt organization held any assets in temporarily restricted endowments, permanent endowments, or quasi-endowments - the ownership of these funds are either directly with your tax-exempt group or a through a related organization.

If you answer “Yes,” then you need to proceed to Schedule D, Part V. Here are a few guidelines from the IRS about reporting your organization’s endowment funds:

Endowment Assets
The IRS requires you to enter the amounts of current and prior year contributions, grants, administrative expenses, and asset transfers to the organization’s endowment funds. List your estimated percentage of total endowment funds along with any information on other grants that aren’t in your group’s possession.

Types of Endowment Funds
The IRS breaks down endowment funds into three categories - the funds you report will fit either one or all of these classifications:

• Temporarily Restricted Endowments - Donor-restricted gifts that provide an income source for a specified amount of time or until a particular event occurs.
• Permanent Endowments - Donor-restricted gifts that provide an ongoing source of revenue and includes the stipulation that invests and retains the principal.
• Quasi-Endowments - Also known as Board-Designated Endowments, these are funds established within the organization from either unrestricted donations or organizational funds.

Even though there are different types of endowments, you report them all together as a lump sum for the current and prior years and then provide a percentage amount of the current year-end balance for each classification.

Possession of Funds
You need to indicate whether or not there are any endowment funds owned by unrelated organizations or any related organizations. If funds are in possession of a related organization, you have to confirm whether or not those groups are listed on a Schedule R. Finally, the IRS requests you describe the intended uses of the organization’s endowment funds in Part XIII of the Schedule D.

With ExpressTaxExempt.com, you can enter all your information regarding endowment funds on a single screen, and we automatically generate it correctly on your Schedule D.

Contact our U.S. - based support team for any other questions or concerns about reporting endowment funds - we’re available at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send a message at your convenience with support@ExpressTaxExempt.com.

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Joint Ventures for Tax-Exempt Hospitals

One way health systems can counter against depleting resources and growing demand is by entering into a joint venture with physicians or other businesses.

While this method can boost efficiency and enhance services, it’s important to ensure the joint venture doesn’t endanger your hospital’s tax-exempt status.

A joint venture typically works by creating a new business partnership for tax purposes like a limited liability company (LLC). With a nonprofit hospital partnering with a for-profit company, some issues could discredit your exemption status. Here are a few things experts say you want to avoid.

Private Inurement
A private inurement is using the revenue or assets of an exempt organization to benefit an officer, director, or other key members. Federal laws strictly prohibit tax-exempt groups from private inurement - ensure there are no improper benefits, written or verbal, within the agreement of the venture.

Neglecting Charitable Functions
A tax-exempt organization has to engage in some charitable work - this is fact. If substantial activity from the joint venture isn’t to advance charitable efforts, then the partnership could negatively impact your hospital’s exemption status.

Excessive Unrelated Business Income
Revenue coming from activities that typically has nothing to do with an organization’s exempt purpose is unrelated business income - and gets taxed at the standard rate. Tax-exempt groups are allowed to have revenue from unrelated activities, but if that extra business becomes more significant than the tax-exempt purpose, it can revoke your exemption status.

Private Benefit
A private benefit is using revenue from your joint venture towards a private entity rather than the public. Once again, if the private interest is more substantial than the charitable cause, your hospital can lose its tax-exempt status. You can prevent this outcome by having your nonprofit control the majority of activities conducted by the joint venture.

Ignoring IRC 501(r) Guidelines
With the regulations set under the IRC 501(r), a taxable entity and a nonprofit organization that jointly owns a hospital must conduct specific responsibilities such as performing a community health needs assessment, reducing charges with billing and collection policies, and having a financial assistance policy. Failure to follow the 501(r) rules can result in the hospital’s loss of tax exemption.

Other operation issues relate to a joint venture retaining its exemption, but a sure way to remain compliant with the IRS tax-exempt rules is to file your required 990 form every year. ExpressTaxExempt.com makes it easy to e-file annual, exemption returns and schedules directly to the IRS and supports real-time, automatic email notifications of your filing status.

Our U.S. - based support team is available to assist with your e-filing experience - give us a call at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or contact us anytime via email with support@ExpressTaxExempt.com.

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Tax-Exempt Retention for Hospitals

With the most recent changes in tax-exempt requirements and healthcare reform, nonprofit hospitals are facing several challenges with exemption classification and retention. Experts say that nonprofit hospitals receive about $13 billion in tax exemptions annually - that’s a significant amount of money that law officials believe can efficiently fund federal, state, and local programs, if imposed.

However, the opposition argues that enforcing taxes on nonprofit hospitals will not only affect staff, medical programs, and equipment but also lead to higher payments for patients. Even though there is no mandated threshold, state laws typically expect a nonprofit hospital to provide charitable services that value over 1% of gross receipts.

Here are a few other suggestions from tax professionals about maintaining tax-exempt status for a nonprofit hospital:

• Comply with the new tax-exempt requirements established by the Patient Protection/Affordable Care Act (PPACA)
• Express the hospital’s capabilities of accepting Medicaid and Medicare patients and services for low-income patients
• Develop rebuttable cases that show reasonable compensation relationships
• Build and retain documents showcasing charitable benefits and charity care the hospital annually provides for the community
• Prove that any money received for community benefit purposes is used exclusively for that activity such as medical research or health education

State courts have also established reasons that can prevent tax-exempt entitlement for a nonprofit hospital:

• Little or no patients receive free or discounted care
• The value of free care provided is minimal
• Immediately refers unpaid bills to collections
• Charges full rates for uninsured patients
• Fails to provide straightforward benefits to the community it serves

It’s critical for board members to review their hospital’s methods and operations each year and ensure that they’re following the guidelines to classify as tax-exempt. It’s just as important as being compliant with the IRS and filing your annual 990 form with Schedule H.

ExpressTaxExempt’s cloud-based service allows nonprofit organizations and hospitals to file 990 forms, schedules, and extensions quicker and easier than paper filing. Contact our U.S. - based customer support team for any questions or assistance with electronically filing tax-exempt returns. Call us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send a message to support@ExpressTaxExempt.com.

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New Year, New IRS Rules

With everything you had going on with your nonprofit during the back-to-back holiday seasons - not to mention other personal responsibilities - you might not have kept up with changes the IRS has implemented for nonprofits filing annual 990 forms.

No worries - we got you covered with the current filing requirements for tax-exempt organizations. We all know that filing late or submitting incomplete forms lead to thousands of dollars in IRS penalty fees - no group wants that. Here’s what you need to know about filing your annual tax return in 2017.

IRS Form 8868 Tax Extension
The 8868 extension form for exempt organizations has gotten reduced to a single form that grants an automatic 6-month extension of time. You can submit an extension request for the same applicable returns as before, which also means IRS Form 990-N (e-Postcard) is not eligible for an extension.

With no Part II of the 8868 form, there’s no longer a need for you to provide a reasonable explanation to gain the full 6-month extension. However, you are still limited to one extension per tax return for the filing year.

IRS Deadlines for Exempt Organizations
The changes with the 8868 extension form also bring slight changes to filing due dates. The filing deadlines aren’t necessarily different, but you should be aware that you only have two chances per year to file instead of the regular three.

For organizations operating on a calendar tax year, your filing due date is May 15. If you choose to file an extension, your extended deadline is Nov 15. There is no August deadline as there was with prior years, and if you fail to file before the November deadline, you’ll incur substantial penalties.

The filing due date for organizations running on a fiscal tax year is always the 15th day of the 5th month after your accounting period ends. If you opt for an extension at that time, you have until the end of six months to file your return - no other opportunities without late fees are available after the extended deadline.

E-file your 8868 extension form and 990 tax return quicker and easier than paper filing with ExpressTaxExempt.com. Our cloud-based application ensures that you submit a complete form, and if the IRS rejects your return, we identify the errors so you can correct them and re-transmit at no additional cost.

Contact our U.S. - based customer support team in Rock Hill, South Carolina for any questions or assistance with transmitting your return or extension form with the IRS. You can reach us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or email us, day or night, with support@ExpressTaxExempt.com.

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Governing Body, Policies, and Disclosure Sections of Form 990

Federal tax law typically does not mandate particular management structures, operational policies, or administrative practices.

However, you are still required to report information regarding your organization's governing body and management, governance policies, and disclosure practices with IRS Form 990.

Not every policy or disclose practice may apply to your exempt organization - here are few guidelines about reporting the following sections with your 990 form:

Voting Members and Relationships
Enter the total count of your organization’s governing body members with the power to vote and the independent voting members. Indicate and describe any material differences of your governing body members if they do not have the same rights to vote.

If your organization’s current list of officers has a family or business relationship with other officers, you need to identify each person and describe their relationship.

Management Duties
Report if your organization appointed any management companies and describe all of the management duty details, if applicable. Management responsibilities include but are not limited to

• Hire, fire, or supervise personnel
• Plan executing budgets or financial operations
• Oversee exempt activities or unrelated trades or businesses

Important: The IRS doesn’t recommend reporting administrative services like payroll processing or investment management unless the filing organization conducts investment management services for others.

Significant Diversion
Report any significant changes in your organizing documents or bylaws for the filing year, if necessary. Indicate if your organization became aware during the year of a significant diversion of the organization’s assets. If so, be prepared to explain the nature of the diversion, dollar amounts and any property involved, corrective actions, and relevant circumstances - do not include the name of whoever diverted the assets.

Select whether your organization has members or stockholders and describe whether your group classifies as a stock corporation, a joint-stock company, partnership, a joint venture, or a limited liability company, if necessary.

Stockholders
If your tax-exempt organization has any members or stockholders, you need to describe the class or categories of each person, the decisions that require their approval, and the nature of their voting rights. You also are responsible for reporting any documentation of meetings and written actions of the governing body and committees with authority to act on its behalf.

Policies
Indicate if your organization controls any local chapters, branches, lodges or affiliates. Report any written policies or practices governing the activities of those subordinate groups to ensure their operations are consistent with the organization's tax-exempt purposes, if applicable.

Written Policy
Specify if your organization has a written conflict of interest policy, a written whistleblower policy, and a document retention and destruction policy. You should also have the information necessary to describe the process for determining the compensation of the officers and key employees.

Disclosures
List all the appropriate states which require a copy of your 990 form to fulfill state exempt organization or charitable solicitation reporting requirements. Indicate and explain whether or not your organization’s governing documents are available to the general public during the tax year.

Organization’s Books
Provide the details of the person who possesses the organization's books and records including their name, address, and phone number.

Our U.S. - based customer support can assist you with any technical issues regarding the governing body, policies, and disclosure sections so you can transmit an error-free 990 form. Contact us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. Or you can submit a request with support@ExpressTaxExempt.com.

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Reporting Organization’s Program Service Accomplishments

Part III of IRS Form 990 and 990-EZ requires you to report your exempt organization’s program service accomplishments. A program service is typically the major ongoing objective or mission of your nonprofit or charity. The IRS lists many examples of exempt services including

• A hospital's provision of charity care under its charity care policy
• A college's provision of higher education to students in a degree program
• And much more

Here are a few instructions directly from the IRS about reporting program services on your 990 tax return:

Organization’s Mission
You begin Part III by describing your organization’s mission as articulated in your mission statement or as adopted by your organization’s governing body. With ExpressTaxExempt.com, you also have the option of indicating if your group hasn’t established a mission.

Service Changes from Prior Year
You need to answer whether your tax-exempt group offered any new, significant program services not listed on your prior Form 990/990-EZ, or ceased conducting, or made major changes in how it performs, any program services. You can describe any new services or changes on a Schedule O.

Description of Program Services
You are responsible for describing program service accomplishments for three of your organization’s largest program services - if you have less than three, then describe for the number of services you do have.

The services you list are typically measured by the total expenses incurred, but you should include the following with your descriptions:

• Accurate measurements such as clients served, days of care provided, number of sessions or events held, or publications issued
• The service's objective for both the current period and a long-term goal
• Reasonable estimates for any statistical information if exact figures are not readily available

You need to be clear, concise, and complete with your descriptions. The IRS doesn’t recommend attaching any brochures, newsletters, or articles about your organization. If you need more space for explanations, you can use Schedule O.

Other Information
For each program service you list, you must also provide total expenses included on Part IX, and total grants and allocations, if applicable, included with your total costs. You’re also responsible for reporting any revenue derived directly from the service.

With ExpressTaxExempt.com, you can quickly and easily enter this information in minutes. Our application automatically generates your additional descriptions onto Schedule O and also calculates revenue, expenses, and grant values with the entries provided in the respective section.

Call our U.S. - based support team for any questions or assistance with entering program service accomplishments on your 990 form. We’re available at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST - email us at any time with support@ExpressTaxExempt.com.

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