Instructions for 2013 - Form 990-EZ and Form 990-T 

January 28:  The IRS posted the final versions of the instructions for Form 990-EZ, Short Form Return of Organization Exempt From Income Tax Under Section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code, and Form 990-T, Exempt Organization Business Income Tax Return, for tax years beginning in 2013.

Form 990-EZ instructions

Changes from the 2012 instructions include the following clarifications:

  • A short period return cannot be filed electronically unless it is an initial or final return for which the “tnitial return” or “terminated” box is checked in Item B of the Form 990-EZ heading.
  • The documentation to attach to Form 990-EZ to support an organization’s name change is listed.
  • The organization must support, through documentation attached to the Form 990-EZ, any claim that it was terminated, dissolved, merged, or had its exemption revoked by the IRS.
  • Certain organizations must complete a public support test computation in Schedule A if excluding Schedule B contributors based on the $5,000 / 2% threshold, even if the organizations would not otherwise have a public support requirement.
  • Discounts on services cannot be reported as contributions on Part I, Line 1.
  • The cost of donated goods may be reported on Part I, Line 7b as the fair market value (FMV) at the time of acquisition.
  • Directors’ compensation for non-director independent contractor services to the organization and related organizations must be reported in Part IV.

Form 990-T instructions

Changes from the 2012 instructions include:

  • A clarification that organizations do not need to file a Form 990-T to preserve net operating losses carried through tax years for which a Form 990-T was not required to be filed.
  • A discussion of the passive loss and at-risk limitations under section 469 and 465 is provided.
  • A discussion of the rules under section 337 for recognition of gain or loss upon disposition of property received from a taxable subsidiary and used in unrelated business is provided.
  • Ordering rules for reporting of income reportable under more than one line item are listed.

KPMG observation

KPMG tax professionals have annotated the new instructions, and noted new language with “yellow” highlights:

For more information, contact:

Rick Speizman, Partner-in-Charge of KPMG's Washington National Tax Exempt Organizations Tax group

+1 (202) 533-3084

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