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Mastering Form 990 Schedule L: Reporting Transactions With Interested and Disqualified Persons

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE video webinar with Q&A

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Conducted on Tuesday, January 25, 2022

Recorded event now available

This course will provide tax advisers to exempt organizations with a thorough and practical guide to completing Form 990 Schedule L, Transactions With Interested Persons, focusing on Parts II through V. The panel will explain the "reasonable effort" requirement to identify interested and disqualified persons, as well as determining reportable transactions. The webinar will also offer guidance on translating the form instructions onto Schedule L and include examples of completed Schedules showing required disclosures.

Description

One of the most challenging Schedules on Form 990 Exempt Organization Tax Return for tax advisers to exempt organizations is Schedule L, Transactions With Interested Persons. This Schedule imposes several burdens on advisers to exempt organizations. First, a nonprofit organization must determine who qualifies as an interested person. According to the IRS, a former officer, director, trustee, or critical organization employee within the last five tax years is treated as an interested person.

More concerning, Schedule L also requires disclosure of disqualified persons participating in impermissible transactions. Section 4958(f)(1) identifies a disqualified person as any person who was, at any time during the five-year period ending on the date of such transaction, in a position to exercise substantial influence over the organization's affairs. The five-year look-back provisions alone create complex compliance burdens for nonprofit organizations and their advisers. Once applicable parties are identified, a nonprofit organization must determine reportable transactions.

Listen as our experienced panel provides detailed guidance on completing Form 990 Schedule L, with concrete examples of completed forms and schedules.

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Outline

  1. Identifying interested persons
  2. Identifying reportable transactions
  3. Reasonable effort standard
  4. Completing Schedule L with examples
    1. Part I excess benefit transactions
    2. Loans to/from interested persons
    3. Grants or assistance benefiting interested persons
    4. Business transactions involving interested persons
  5. Best practices

Benefits

The panel will discuss these and other essential aspects to completing Schedule L:

  • How does the Service define "interested person" for Form 990 reporting purposes?
  • Identifying information to report on Schedule L
  • What is the "reasonable effort" standard that exempt organizations must meet in determining whether they must report a transaction?
  • Determining when specific transactions warrant checking the box affirming engagement in an excess benefit transaction

Faculty

Harris, Jennifer
Jennifer Becker Harris, CPA
Tax Shareholder
Clark Nuber

Ms. Becker Harris concdentrates her practice on tax-exempt organizations. Her practice primarily focuses on consulting...  |  Read More

Lira, Connie
Connie M. Lira, EA
Director
CliftonLarsonAllen

Ms. Lira practices in tax compliance for nonprofit organizations, including social service/public charities, higher...  |  Read More