Form 990 series for 2013 - Form 990-T, Form 990-EZ and instructions for Schedules A, J and K 

December 23:  The IRS publicly released final versions of the following Form 990 series forms and instructions for tax years beginning in 2013:
  • Form 990-T, Exempt Organization Business Income Tax Return
  • Form 990-EZ, Short Form Return of Organization Exempt From Income Tax
  • Instructions for Schedule A, Public Charity Status and Public Support
  • Instructions for Schedule J, Compensation Information
  • Instructions for Schedule K, Supplemental Information on Tax-Exempt Bonds

Changes for 2013

The following lists some significant changes to these forms and instructions for 2013.

  • Schedule A instructions - Adding instructions to clarify the new requirements for supporting organizations, as set forth in final regulations; classifying Type III supporting organizations as either "functionally integrated" or "non-functionally integrated;" and implementing payout requirements for non-functionally integrated Type III supporting organizations

  • Schedule J instructions - Requiring qualified CO-OP health insurance issuers to answer questions regarding certain types of compensation practices; clarifying that methods used by a compensation consultant and relied upon by the filing organization may be reported as procedures used to establish CEO/Executive Director compensation; clarifying that payments made pursuant to a voluntary separation agreement may be included in the definition of "severance payments"

  • Schedule K instructions - Clarifying that the threshold amount of proceeds used in defining "pooled financing issue" is $5 million; clarifying that a defeasance escrow can be established for the remediation of nonqualified bonds when the defeasance provides for the redemption of bonds on the earliest call date; clarifying when a qualified section 501(c)(3) bond issue will meet the private security or payment test in determining private business use; including new instructions regarding the sale or disposition of any bond-financed property to a nongovernmental person other than a section 501(c)(3) organization

Form 990-T and Form 990-EZ do not contain significant changes from the 2012 versions. The IRS has not yet finalized the instructions for Form 990-T.

KPMG observation

KPMG tax professionals have annotated versions of the new forms and instructions—with new language noted with “yellow” highlights (click on these annotated versions at the hyperlinks provided immediately below):

Read: TaxNewsFlash-Exempt Organizations: Form 990 for 2013 - Instructions for Schedule D for a recent discussion of other final 2013 Form 990-series schedules and instructions.

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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