The Core Form: Heading to Part VII

The heading, Items A–M

• A, tax year. Calendar or fiscal; a short period arises in the first year, on a change of period, or at termination, and cannot be e-filed unless it is an initial or final return. Change of period: Form 1128 if changed within the last ten years and a 990 was filed in that time (Rev. Proc. 85-58); 990-N filers report it on a 990, an EZ, a 1128 or a letter to Ogden.
• B, checkboxes. Address change (if not already reported on Form 8822-B); name change (attach the state-stamped amendment — two officer signatures for an association, one trustee for a trust); initial return; terminated (Schedule N and the certified dissolution articles); amended (Schedule O lists what changed); application pending.
• C–F. Legal name and DBA; one EIN only (a subordinate uses its own, a VEBA uses its own, not the sponsor’s); a phone the public can call; the principal officer — the person who, whatever the title, has ultimate responsibility for implementing board decisions or supervising operations. Use the organization’s address and phone, never an officer’s home, because all of this is public.
• G, gross receipts = Part VIII lines 6b, 7b, 8b, 9b, 10b and 12, column (A). H, group return (list excluded subordinates on an attachment, not Schedule O). I, exempt status: for a new client, read the determination letter or TEOS, never the prior preparer’s box. J, website — keep it consistent with the return. K–M: form of organization, year formed, state of domicile.
• Tax Exempt Organization Search (TEOS) shows determination letters since 2014, e-filed 990-series images since 2017, Pub. 78 deductibility status, the auto-revocation list and 990-N filings. Form 4506-B for an older letter, 4506-A for an older return. [Final Q6, D; marked]

Parts I–III: summary, signature, program services

• Part I is the snapshot: line 1 the most significant activities (not the mission — Part III line 1 asks for that), the board counts, the two-year revenue and expense comparison by type. If last year was an EZ or an N, the prior-year column is blank; do not translate EZ numbers into it.
• Part II: an officer signs; the paid preparer signs with a PTIN; the third-party designee box lets the IRS talk to the preparer about processing and math errors until the next year’s due date — it is not a 2848. Each of Parts III, V, VI, VII, VIII, IX, X, XI and XII has a box to check when Schedule O explains an answer.
• Part III: line 1 the mission as adopted by the board (“None” if it never adopted one — and then adopt one); lines 2–3 new or discontinued programs; lines 4a–4c the three largest program services by expense, each with expenses, grants and revenue (for (c)(3)s and (c)(4)s) and a narrative with measurable output — clients served, meals, sessions, publications; research gets the period’s objective and the long-term goal. Revenue here means fees, related sales and exploited-function UBI; contributions and grants are not Part III revenue. Donated services and donated use of facilities can be described but never counted. Public interest law firms list every case (Rev. Proc. 92-59). Line 4e must equal Part IX line 25(B). [SQ 9, B; SQ 10, D]
• A program service is an activity that accomplishes the exempt purpose; fundraising is not one unless the event itself furthers the purpose (a folk festival run by a folk-music preservation society is program revenue, Ex. 2.15). There are no program service codes; the NAICS business codes belong on Part VIII lines 2 and 11.

Part IV: the 38-line checklist

• Every “Yes” attaches a schedule. The lines that bite: 1 (c)(3) → Schedule A, always. 2 Schedule B (greater of $5,000 or 2%). 3–5 political activity, lobbying, §6033(e) dues notices → Schedule C (line 3 is answered by everyone, including organizations allowed to campaign). 6–12 donor-advised funds, conservation easements, collections, escrow accounts, endowments, the balance-sheet lines, audited financials → Schedule D. 13 school → E. 14b–16 foreign activity, investments valued at $100,000 or more, grants abroad → F. 17–19 professional fundraising, events and gaming over $15,000 → G. 20 hospital → H and the audited statements. 21–22 grants over $5,000 to organizations or individuals → I. 23 anyone in Part VII over $150,000 → J. 24 tax-exempt bonds over $100,000 → K. 25–28 excess benefit transactions, loans, grants, business with insiders → L. 29–30 noncash gifts over $25,000, art, easements → M. 31–32 dissolution or disposing of more than 25% of assets → N. 33–37 disregarded entities, related organizations, controlled entities (§512(b)(13), any transfer unless under $50,000 — line 35a), unrelated partnerships → R. 38 Schedule O, always.
• Use Part IV as the last cross-check before filing. The penalty for an incomplete return is the same daily penalty as for a late one.

Part V: other filings and tax compliance

• A reminder list with teeth: 1096/1099 counts and backup withholding; W-3 count and whether employment returns were filed; 3a–b $1,000 of gross UBI and whether a 990-T was filed (if on extension, answer “No” and explain); 4 foreign accounts and FinCEN 114; 5 prohibited tax shelter transactions (Form 8886-T); 6 solicitations by non-(c)(3)s must say contributions are not deductible; 7 quid pro quo statements over $75, Forms 8282 and 8283, personal benefit contracts (7e–f: any insurance or annuity benefiting the donor or family), vehicle and boat gifts (Form 1098-C), intellectual property; 8 excess business holdings of DAF sponsors and SOs; 9 DAF taxable distributions; 10–13 (c)(7), (c)(12), (c)(29) items; 14 indoor tanning (Form 720); 15 §4960 excess compensation (Form 4720, Schedule N); 16 §4968 endowment tax (Form 4720, Schedule O); 17 black-lung trust taxes (Form 6069).
• §4960: 21% on remuneration over $1 million and on excess parachute payments (more than three times the five-year average), entity by entity, with medical services carved out. From tax years beginning after December 31, 2025 it covers every employee, not just the five highest paid — so a large hospital or university system can no longer manage the tax by who lands in the top five. updated 2026
• §4968: the course’s “§4966, 1.4%, 500 students” is now 1.4% / 4% / 8% by endowment per student, for institutions with at least 3,000 tuition-paying students (more than half in the U.S.), from 2026. Still irrelevant to anyone who walks into this office. updated 2026

Part VI: governance

• Everyone answers every question. Most of Section B asks about policies the Code does not require; the IRS calls them best practices. A truthful “No” is fine on the return and is the agenda for the next board meeting. [SQ 7, A; SQ 12, D; Final Q15, B; marked]
• Section A. Line 1a voting members at year-end and the delegation to any executive committee (Schedule O); 1b independent members — all four tests for the whole year: (a) not compensated as an officer or employee of the organization or a related organization; (b) not more than $10,000 from them other than expense reimbursement and reasonable compensation for board service; (c) neither the member nor a family member was party to a transaction reportable on this year’s Schedule L; (d) no family member compensated or materially benefited. Line 2 family and business relationships among the insiders (spouse, ancestors, siblings, children, grandchildren and their spouses — current people only). Line 5 significant diversion: embezzlement or misuse discovered during the year exceeding the lesser of 5% of gross receipts, 5% of year-end assets, or $250,000, ignoring recoveries — have a lawyer read the Schedule O wording. Line 7b: decisions reserved to persons other than the board.
• Examples 2.3–2.7. A director who is a 5% partner in the law firm the organization paid $120,000 is on Schedule L and not independent; an associate at the firm would be. A director whose daughter earns $40,000 at a related organization is not independent. A paid board chair who runs staff meetings and does evaluations is paid as an employee and not independent; a chair paid reasonable fees solely for board work is.
• Section B. 10 local chapters; 11a was the complete return given to every voting member before filing (“No” if Schedule B was redacted or it was merely “available on request”), 11b the review process; 12a–c written conflict-of-interest policy, annual disclosure, monitoring and enforcement; 13 whistleblower policy; 14 document retention policy; 15a–b compensation of the top official and of other officers set by independent persons using comparability data with contemporaneous documentation — the three elements of the §4958 rebuttable presumption (Schedule O describes the process and the year); 16 joint ventures with taxable partners and the policy that protects exempt status. A policy question is “Yes” only if the board adopted the policy by year-end. See Governance for what the policies say.
• Section C. States where the return is filed; how the 990 (and 1023, and for (c)(3)s the 990-T) is made available — own website, another’s website, on request; whether governing documents, the conflict policy and financial statements are public; who keeps the books. The §6685 penalty for willful refusal is $5,000 per document on top of the daily penalty.

Part VII: compensation

• Section A lists, in descending order of compensation: all current officers, directors and trustees (no minimum, even if unpaid); key employees — reportable compensation over $150,000 and organization-wide influence like an officer’s or authority over at least 10% of activities and among the top 20 by pay of those meeting both tests; the five highest compensated employees other than those, over $100,000; former officers, key employees and high-five over $100,000 (within the five prior years); former directors over $10,000 for board service. Only one position box per person except officer-and-director. Section B: the five highest-paid independent contractors over $100,000. [Final Q20, C; marked]
• Columns D and E are reportable compensation from the organization and from related organizations on a calendar-year basis: W-2 box 1 or box 5, whichever is greater; 1099-NEC box 1; 1099-MISC box 6. Column F is other compensation: deferred compensation not yet on a W-2 and nontaxable benefits other than disregarded benefits (accountable-plan reimbursements, no-additional-cost services, employee discounts, de minimis and working-condition fringes). An item under $10,000 of a type marked in the instructions’ compensation table (health, dependent care, tuition, group life) may be left out of column F.
• Exceptions: payments from a single related organization under $10,000 for the year may be ignored in column E (no de minimis for a former director); the volunteer exception ignores pay from a related for-profit that the organization does not control and that provides no management services. Hours per week must be a number, with related-organization hours stated separately (Schedule O).
• Deferred compensation: deferrals under qualified and nonqualified plans and the annual change in actuarial value of a defined benefit plan (not investment results in a defined contribution plan). Paid within 2½ months after year-end is current, not deferred. A decrease in actuarial value is ignored when testing the $150,000 Schedule J line.
• Schedule J is required for anyone in Section A whose columns D + E + F exceed $150,000, for anyone paid by an unrelated organization for services to the filer (line 5 — a CEO paid by an outside corporation, Ex. 2.9), and for former officers and key employees listed. Detail on Schedule J.

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.