Form 990
Notes from a continuing-education course on exempt organizations — Form 990: A Practical Guide (Checkpoint Learning / Thomson Reuters, twelve hours, four chapters, written on 2021 law and the 2021 forms; completed August 20, 2022, final exam scored 83). The Tax Shop does not hold itself out as a Form 990 shop; these pages exist because clients sit on nonprofit boards, run booster clubs and church councils, start foundations, and ask. They are the desk procedure for the questions that come across the counter: does this thing need to apply, which return does it file, what happens when it hasn’t filed in years, and when does its side business become taxable.
What changed since the course
| User fees | Form 1023 $600 and Form 1023-EZ $275, unchanged (IRS user-fee page reviewed October 2026). Form 1024 and 1024-A $600, Form 8976 $50 check. All on Pay.gov. |
| Filing thresholds | Unchanged: 990-N at gross receipts normally $50,000 or less; 990-EZ under $200,000 of receipts and under $500,000 of assets; 990 above either. 1023-EZ still $50,000 projected receipts / $250,000 assets. 990-T still $1,000 of gross unrelated income. |
| §6652(c) penalties | For 2026: $25 a day, capped at the lesser of $13,000 or 5% of gross receipts; organizations over $1,339,500 of gross receipts pay $130 a day, capped at $66,500 (Rev. Proc. 2025-32). The course has $20 / $10,500 and $105 / $54,500 over $1,094,500. updated 2026 |
| §4960 | P.L. 119-21 (July 4, 2025) extends the 21% excise tax on compensation over $1 million from the five highest-paid employees to every employee of an applicable tax-exempt organization, for tax years beginning after December 31, 2025. updated 2026 |
| Endowment tax | The course calls it §4966; it is §4968. P.L. 119-21 replaced the flat 1.4% with tiers (1.4% / 4% / 8% by endowment per student) and raised the student floor from 500 to 3,000 tuition-paying students, for tax years beginning after 2025. updated 2026 |
| Donor side | From 2026: a $1,000 / $2,000 deduction for non-itemizers, a 0.5%-of-AGI floor for itemizers, a 35% cap on the value of the deduction in the top bracket, the 60% cash limit permanent, and a 1%-of-taxable-income floor for corporations. The course’s $300 / $600 above-the-line deduction and the 100%-of-AGI year were 2020–2021 only. See the public pages on charitable giving and the non-itemizer deduction. updated 2026 |
| Dropped from P.L. 119-21 | The House bill’s revival of the parking-lot UBTI (§512(a)(7)), UBTI on name-and-logo royalties, the narrowed research exclusion, and the tiered private-foundation tax were all dropped. §4940 stays at 1.39%. added 2026 |
| Siloing | Final regulations under §512(a)(6) (T.D. 9933, December 2020): separate businesses identified by two-digit NAICS code, one “investment activities” silo, the 2% de minimis and 20% control tests for partnership interests. The course mentions siloing only on the 990-T lines. added 2026 |
| Low-cost article | $13.90 for 2026 ($13.60 for 2025). The course’s $11.30 / $11.70 were 2021 / 2022. Token-item limits for “insubstantial benefit” receipts: $13.90 / $69.50 / $139. updated 2026 |
| Form 990-T | Charitable contribution limit back to 10% of UBTI (the 25% was 2021 only), and the new 1% floor applies to corporate filers from 2026 check. Minimum late-filing penalty $535 for 2026. New Part III lines for §1062 farmland sales (Form 1062); refunds need Form 8050. NOL 80% limit permanent. |
| 2025 Form 990 | Minor: Schedule A instructions rewritten for the Type III supporting-organization regulations; Appendix D now says keep physical copies of the three most recent returns at the office for inspection even if posted online; only the three most recent years can be e-filed, older amended returns go on paper. added 2026 |
| Schedule B | Rev. Proc. 2018-38 was vacated by a district court in 2019; the rule is now in T.D. 9898 (Reg. §1.6033-2(a)(2)(iii)(D), 2020): only §501(c)(3) and §527 organizations report donor names and addresses. Same result, different authority. updated 2026 |
| Unchanged | The 27-month rule, the organizational and operational tests, the one-third and 10% public support tests and the five-year grace, the three-year auto-revocation and the four Rev. Proc. 2014-11 routes, Part VII thresholds ($150,000 key employee, $100,000 high-five, $10,000 former director), the $250,000 diversion test, the 85% volunteer and donated-goods exclusions, the 10% / 50% mixed-lease bands, the $1,000 specific deduction, the 21% corporate rate on UBTI, §4958 at 25% / 200% / 10%. |
§501(c)(3), Form 1023 and 1023-EZ, 1024 and 1024-A, Form 8976, the 27-month rule
§509(a), the one-third and 10% tests, supporting organizations, what private foundation status costs
990-N, 990-EZ, 990, 990-PF; due dates; penalties; auto-revocation and the four ways back
Items A–M, program services, the Part IV checklist, governance, compensation
Revenue, functional expenses, balance sheet, the 990-EZ
Public support, contributors, lobbying and politics, financial detail, schools, foreign activity, fundraising and gaming
Hospitals, grants, compensation, bonds, interested persons and §4958, noncash gifts, dissolution, related organizations
The three prongs, the exclusions, the §512(b) modifications, controlled organizations
§514, the debt/basis fraction, the neighborhood land rule, Form 990-T and Schedule A line by line
The conflict-of-interest policy, annual statements, the §501(h) election, the campaign ban
Secretary of State charitable registration and periodic report, DR 0715, DR 0112 for UBTI
One-liners from the final exam and the chapter review questions
On this page
- How the course is organized 5 notes
- Sources used for the update 6 notes
How the course is organized
- Chapter 1, Attaining Tax-Exempt Status — §501(c)(3) requirements, public charity vs. private foundation, lobbying and politics, Form 1023 part by part, Forms 1024 and 1024-A, Form 8976, the four reinstatement routes, Canadian charities, the IRS sample conflict-of-interest policy. Six study questions.
- Chapter 2, The Core Form — who files which 990, due dates and e-filing, penalties and auto-revocation, group returns, the heading items, Parts I–XII, the 990-EZ and 990-N. Seven study questions.
- Chapter 3, Schedules — Schedules A through R, with the public support arithmetic, the lobbying tests, fundraising and gaming, compensation, interested persons, noncash gifts and related organizations. Study questions 14–24.
- Chapter 4, Unrelated Business Taxable Income — the three-element test, the statutory exclusions and §512(b) modifications, debt-financed property, and Form 990-T with its Schedule A. Study questions 25–37.
- The one-liners on the Quick Notes page come from the 61-question final-exam bank I printed and marked, and from the review questions I clipped into my notes. The exam printout carries my page references in the margin; where I corrected an answer in blue after the fact, the blue answer is the one used.
Sources used for the update
- P.L. 119-21 (July 4, 2025): §4960 (all employees), §4968 tiers, §170(b)(1)(G) 60% permanent, §170(p) non-itemizer deduction, §170(b)(1)(H) 0.5% floor, §170(b)(2)(A) 1% corporate floor, §68 35% cap, §1062
- Rev. Proc. 2025-32 (2026 inflation adjustments: §6652(c), §513(h) low-cost article, insubstantial-benefit amounts, §6651 minimum)
- T.D. 9933 (Reg. §1.512(a)-6, separate trades or businesses); T.D. 9898 (Reg. §1.6033-2, Schedule B donor names); Reg. §§1.509(a)-4 and 1.509(a)-4T as revised for Type III supporting organizations
- Instructions for Forms 990, 990-EZ, 990-T, 990-PF and 4720 for 2025 (line references; verify against the 2026 forms when released) check
- IRS pages: “Form 1023 and 1023-EZ: Amount of user fee” (reviewed October 9, 2026); Tax Exempt Organization Search; Rev. Proc. 2014-11; Rev. Proc. 2026-5 for the other user fees check
- Colorado: C.R.S. §6-16-104 (Charitable Solicitations Act), Colorado Secretary of State charities program, DR 0715 and DR 0112 instructions check
Private reference, not client advice. Notes taken from a continuing-education course, Form 990: A Practical Guide (Thomson Reuters Checkpoint Learning, 12 hours, 2022 edition written on 2021 law and the 2021 forms). Figures and rules brought current to 2026 in October 2026 (P.L. 119-21, Rev. Proc. 2025-32, T.D. 9933, T.D. 9898, the 2025 form instructions). Items tagged check are to be confirmed against primary sources before they are relied on.