Drake Software User`s Manual Supplement: Charities and Non
Contents
1. page 18 Header Information Forms 990 990 EZ 990 PF 990 T 990 N Use screen 1 to fill out the header section for a tax exempt organization Complete all applicable fields Enter the organization s ID number name address and telephone Foreign Address Type of Form Form Columns Tax Year 2010 number at the top of screen 1 NOTE Header information to be completed first are items A through F and H a through M The Gross receipts field header item G on the 990 is completed automatically If the organization has a foreign address fill out the applicable fields in the Foreign Address ONLY section of screen 1 To indicate which form the organization is filing select an option from the Form drop list on screen 1 See Figure 1 on page 4 and Figure 4 on page 10 If the only return being prepared is a 990 T and its related forms mark the 990 T only box Screen 1 has separate columns indicating the header boxes for Forms 990 990 EZ and 990 PF For example the Exemption application pending item is Box B on Forms 990 and 990 EZ and Box C on Form 990 PF Note that not all questions are required for all forms Form 990 Affiliate Listing 990 Only Tax Year Schedule R 10 Drake Software User s Manual General Information Foc rr x IF 990 7 onty 990 EZ PF 1 BiB cr Exemption application pending BB GT Initial return Final return I Amended return Change in address Chan2. Screen SCH2 Supplemental Information and General Explanation Attachment allows you to attach explanations for certain parts of the Form 990 PF It is necessary to identify which part of the form is to be associated with the attached statement To select a section of a form choose an option from the Schedule drop list at the top of screen SCH2 Next write an explanation in the Explanation field Press PAGE DOWN as needed for additional attachments Note that there is a 5 000 character limit for e filing The SCH2 screen can be used for other 990 return types Note that screens O for Schedule O Supplemental Information and SCH2 are NOTES the same Form 990 T Tax Year 2010 IfX General Explanation Attachment is selected from the Schedule drop list the attachment will be e filed with an e fileable return 990 990 EZ or 990 PF Form 990 T Exempt Organization Business Income Tax Return is used for e Reporting unrelated business income and tax liability e Reporting proxy tax liability e Claiming a refund paid by either a regulated investment company RIC or a real estate investment trust REIT on undistributed long term capital gain e Requesting a credit for certain federal excise taxes that have been paid e Claiming Form 8941 credit for small employer health insurance premiums Based on the items listed above an organization may need to complete Form 990 T in addition to its 990 990 EZ 990 PF or 990 N return See
3. e Providing charity care under a hospital s charity care policy e Providing higher education to students under a college s degree program the number of students served must be indicated e Making grants or providing assistance to individuals who were victims of a natu ral disaster e Providing rehabilitation services to residents of a long term care facility Acceptable exempt achievements do not include any achievement not substantially related to the accomplishment of the organization s exempt purpose other than by raising funds To enter a description that exceeds the allowed number of characters on screen 4 press PAGE DOWN and continue the description There is no need to re enter the infor mation in the top section of the screen If the description takes up more space than is allowed on the printed return the program will generate it on a separate SERVICES page All Forms Sets EF a TE Federal l ES L 990EF 990 990 PG2 990 PG3 990 PG4 990 PG5 990 PGE 990 PG7 990 PG8 990 PG9 4a Code Expenses 142 000 including grants of 7 200 Revenue J 990 PGA See SERVICES page for a description of this program service 990 PGB FOLDA E FILEINST J BILL SUMMARYT PRIVACY LETTER ta e e a de Figure 7 Part III of Form 990 references a SERVICES page for descriptions that are too long to be printed on the actual 990 form Tax Year 2010 13 F
4. 1 Select N Form 990 N from the Form drop list under the General Information heading General Information Corie eee F 990 T only 990 EZ PF X Form 990 B B CT Exemptide Form 990 EZ B B GT Initiale P Form 990 PF initial Eter Change in address Initial return of a former public charity I Amended return Change in name XI G J Accounting method a PNF UR sl asin cuales Other Es ee Se Figure 1 Begin by selecting N Form 990 N from the Form drop list on screen 1 2 Under the EZ column shown in Figure 1 mark item K to indicate that the orga nization s gross receipts are normally not more than 50 000 3 Go to the OFF screen and complete the applicable fields regarding compensation of officers directors trustees etc for at least one officer Once any message pages have been eliminated the 990 N information can be e filed A Form 990 N Information page will be generated with the return for informational and bookkeeping purposes NOTE For information on signing a return prior to e filing see Part Il Signa ture Block on page 18 Form 990 EZ Certain organizations can file Form 990 EZ Short Form Return of Organization Exempt From Income Tax instead of Form 990 For tax years beginning in 2010 if an organization s gross receipts total amounts received from all sources during its annual accounting period are less than 200 000 and total assets at year end are less t
5. Management and Disclosure Part VI Governance Management and Disclosure requests information regarding the governing body and management governance policies and disclosure practices Although federal tax law generally does not mandate particular management struc tures operational policies or administrative practices every organization is required to answer each question in Part VI Use screen 7 to access fields for Section A of Part VI Press PAGE DOWN to access Sections B and C If additional information is required for Part VI use Schedule O screen O see Schedule O Supp Info on page 18 Part Summary Number of Volunteers Line 7b Lines 8 19 The summary section asks for information regarding the mission activities and finan cial results of the organization Use screen 2 to complete Form 990 Part I Summary Enter the number of full time and part time volunteers who provided volunteer ser vices to the organization during the reporting year A reasonable estimate is accept able if an exact number is not known If the organization wishes to provide an explanation of how the number was determined use Schedule O screen O in the pro gram see Schedule O Supp Info on page 18 If the organization is not required to file Form 990 T enter a zero 0 for line 7b Prior year amounts are updated automatically from the previous year s return These amounts are shown on screen 2 Part IV Checklist o
6. Part XI line 8 Other revenues not included on Form 990 Part XII line 2d Other revenues included on Form 990 Part XII line 4b D12 Other expenses not included on Form 990 Part XIII line 2d Es Lg de md Seam Other sgpensos included one Formoso ARA dino o ms amram Figure 9 Schedule drop list on screen O 3 Under Explanation type the narrative information Note that there is a 5 000 character limit for e filing Press PAGE DOWN to open a blank screen O and add supplemental information for another schedule or line The codes for the O screen are preceded by the letter O To add a narrative explanation for an amended return select AMD NOTES located just before the O items in the drop list See Amending a Return on page 20 for more on amending a return To add a general explanation attachment select X located at the bot tom of the drop list Data entered on screen O is printed in the supplemental information section of the specified schedule For example the narrative from Figure 9 would be printed under Schedule D Part XIV Supplemental Information Part II Signature Block The signature block on Form 990 contains fields for up to two signatures e An officer of the organization e The paid preparer if applicable If e filing enter the paid preparer and organization officer PINs on the PIN screen The applicable ERO or preparer PIN must be entered in Setup gt IMPORTANT Preparer s or Setu
7. Credits Other Forms Miscellaneous States 1 Name Address General Info 990 PF Schedules Statements 51 Additional Info SCH2 General Explanation Attachment IND Contractor Compensation SCH3 Other ltems OFF Officers Directors Employees SCH5 Part Line Ba Schedule SCH Part Line 10c Schedule O md in Form d mtas nest o O cr nata rt A a PPO e OA OS Figure 2 Form 990PF tab in Drake partial menu Tax Year 2010 5 Form 990 PF Drake Software User s Manual Several screens such as screen 1 the IND and OFF screens and certain schedule SCH or SC screens can also be found elsewhere in the menu as they apply for mul tiple forms and not just the 990 PF Recommended Order for Completing Form 990 PF The IRS recommends completing Form 990 PF in the following sequence to limit jumping from one part of the form to another Table 2 Form 990 PF Recommended Order Seq Section Screens Notes 1 IV 55 2 land Il 52 53 54 For required schedules see Part Addi tional Schedules and Part Il Additional Schedules following 3 Heading 1 4 II SCH3 5 VII A 57 Use screen SC57 to create a schedule for controlled entities 6 VIII OFF Use the IND screen to enter data for inde pendent contractors 7 IX A through X 59 If an explanation is required for line 1e of Part X use screen SC59 Reduction Expla nation 8 XII lines 1 4 60 Line 4 is calculated automatically
8. in Drake 9 V and VI 56 10 XII lines 5 6 n a Calculated automatically in Drake 11 XI 60 12 XIII 61 13 VII B 58 14 XIV XVII 62 66 NOTE Part Additional Schedules Table 2 This information is also available from the FAQ screen item K Rec ommended Order for Completing Form 990 PF Additional schedules may be needed to complete the following lines from Part I 2 in e Line 6a Net gain or loss from sale of assets not on line 10 Use screen SCHS e Line 10c Gross profit or loss Use screen SCH7 e Line 11 Other income Use screen SC50 for subsidiary schedule Tax Year 2010 Drake Software User s Manual Form 990 T Part Il Additional Schedules Using Screen SCH2 e Line 19 Depreciation Use screen SC51 for depreciation schedule e Line 23 Other expenses Use screen SC50 for subsidiary schedule use screen SC52 for amortization schedule Additional schedules may be needed to complete the following lines from Part II 42 in Table 2 e Line 7a Other notes loans receivable Use screen SC14 Us screen SCH3 for line 7b e Line 13 Other investments Use screen SC53 for subsidiary schedule e Lines 10a 10c Investments Use screen SC54 e Line 15 Other assets Use screen SC53 for subsidiary schedule Line 21 Mortgages and other notes payable Use screen SC55 e Line 22 Other liabilities Use screen SC53 for subsidiary schedule
9. return is displayed You can now begin entering header information for the organization Header information for all forms is completed on screen 1 For informa NOTE tion on specific fields in screen 1 see Header Information Forms 990 990 EZ 990 PF 990 T 990 N on page 9 Updating a Prior Year Return If you prepared the organization s tax return last year you need to update it for 2010 Prior year returns can be updated in three ways A single return updated one at a time using Last Year Data gt Update 2009 to 2010 recommended With all other returns in the program using Last Year Data gt Update 2009 to 2010 not recommended When you open the return for the first time in the 2010 program and are prompted to update it Drake recommends using the first option updating returns individually to ensure that you update only those items in a return that you want updated If you attempt to open a prior year 990 return that was marked as final NOTE the previous year the program informs you that the return was marked Tax Year 2010 as final before it prompts you to proceed Form 990 N Drake Software User s Manual Form 990 N Form 990 N Electronic Notice e Postcard for Tax Exempt Organizations Not Required to File Form 990 or 990 EZ is required for certain small tax exempt organi zations To file the e Postcard using Drake go to screen 1 for the organization and take the fol lowing steps
10. the organization s relationships with other organiza tions both taxable and exempt The program has three screens for Schedule R listed in Table 4 Table 4 Schedule R Screens Screen Sections of Schedule R Covered Schedule R Parts Disregarded Entities II Related Tax Exempt Organiza tions and III Related Organizations Taxable as a Partnership Tax Year 2010 Drake Software User s Manual Form 990 Table 4 Schedule R Screens Screen Sections of Schedule R Covered R2 Schedule R Parts IV Related Organizations Taxable as a Corporation or Trust V Transactions With Related Organizations and VI Unrelated Orga nizations Taxable as a Partnership R3 Schedule R Part V Line 1 To enter more entities press PAGE DOWN to access new blank fields Schedule R is not required for all organizations For information on NOTE which aspects of Schedule R must be completed by an organization see the IRS instructions for Schedule R See also screen level help in Drake for screens R R2 and R3 Part VII Section A Once you have completed Schedule R the IRS recommends completing Part VII Sec tion A Compensation of Officers Directors Trustees Key Employees Highest Compensated Employees and Independent Contractors Use the OFF screen to report this information noting that information entered there is used to generate Part II of Schedule J Compensation Information When compl
11. Form 990 T instructions to determine if an organization is required to file Form 990 T Form 990 T cannot be e filed Form 990 Drake Software User s Manual Form 990 T Screens All 990 T specific screens are located under the Form 990T tab Form 990 990EZ Schedules A G Schedules H R Form 990PFCForm 9907 Deredits Other Forms Miscellaneous States 1 Name Address General Info 80 Additional Info Common Credits 81 Parts amp Il Income amp Deductions 82 Part Ill Tax Computation 83 Partl Tax and Payments 84 PartY amp Schedule A Activities amp COGS ES O A AAA AAA SS A A Figure 3 Form 990T tab in Drake partial menu Screen 80 must include a selection for item G organization type in NOTE order for Form 990 T to be produced correctly with the appropriate tax calculated Form 990 Form 990 must be filed by a tax exempt organization under section 501 a if it has either e Gross receipts of 1 million or more e Total assets of 2 5 million or more at the end of the tax year For more information on who must file Form 990 see the Form 990 instructions pub lished by the IRS Recommended Order for Completing Form 990 The sequence shown in Table 3 is suggested for efficiently completing a return for a tax exempt organization In general complete the core form first and then com plete alphabetically Schedules A through O and Schedule R except as specified below This order limits the
12. Schedules Schedule A is required At a minimum amounts must be entered for the current year even if the amounts are zero If there are no entries for Schedule A a message page is generated upon calculation and the N DOTES return cannot be e filed Field and screen level help resources within the program provide valu able supplemental information and tips for completing Schedule A in Drake Press F1 for field level help On screens A and A3 click Screen Help for screen level help Use Schedule B Schedule of Contributors with Form 990 Form 990 EZ or Form 990 PF to provide information on certain contributions reported by the organization Schedule B is required for contributions from at least one contributor in excess of 5 000 If there are no entries for the required Schedule B fields in the program a message page is generated and the return cannot be e filed In Drake use screen B to enter Schedule B information NOTE Contributor information on Schedule B is not publicly disclosed Schedule C is required for certain section 501 c organizations and section 527 orga nizations filing Form 990 or Form 990 EZ Use the following screens for Schedule C e Screen C Parts I A I B and I C e Screen C1 Part I C line 5 names addresses and EINs of 527 organizations to which payments were made e Screen C2 Parts II A and II B e Screen C3 Parts III A and III B e Screen C4 Affiliated group information See t
13. User s Manual pa Drake Supplement Charities and Non profits 990 990 EZ 990 N 990 PF 990 7 Drake Software User s Manual Tax Year 2010 Supplement Charities and Non Profits 990 Support DrakeSoftware com 828 524 8020 Copyright Trademarks Drake Software User s Manual Supplement 990 The 2010 Drake Software Manual Supplement Charities and Non Profits Drake Tax Software and any other related materials are copyrighted material All rights are reserved by Drake Enterprises LTD including all ownership rights This document associated software and related material are the property of Drake Enterprises LTD Drake Enterprises LTD hereby authorizes you to download display print and repro duce the material in this document in an unaltered form only for your personal non commercial use or for non commercial use within your organization Copyright trademark and other proprietary notices may not be removed O 2010 Drake Enterprises LTD All rights reserved While every attempt has been made to produce an accurate and complete manual there is no warranty expressed or implied to that effect Drake Enterprises LTD assumes no liability for damages or claims resulting from the use of the information contained herein The Drake Software Logo and Drake Tax are registered trademarks of Drake Enterprises LTD Other product names mentioned in this manual may be trademarks or registered trademarks of th
14. counting period ends By filing Form 8868 an organization can extend the deadline three months to August 15 for a calendar year return Form 8868 can be used to apply for an addi tional three month extension if the original three month extension was insufficient Use the EXT or 8868 screen to apply for an extension Select the applicable box at the top of the EXT screen to indicate the type of extension being requested Application for Extension of Time To File an Exempt Organization Return Filing for an AUTOMATIC three month extension I Filing for ADDITIONAL extension not automatic 3 Type ofreturn to be filed l Form 990 T corporation M Form 990 BL Form 5227 O E OA A IA Lf FLA BOBS A Figure 10 Select the type of extension being requested Ifrequesting an additional extension an explanation is required on the EXT screen NEW FOR Form 8868 Application for Additional Extension of Time to File an 201 Exempt Organization Return is now eligible for e file Amending a Return Indicate an amended return on screen 1 Note that an explanation is required for an amended return Tax Year 2010 19 Binary Attachments Drake Software User s Manual When you amend a return in Drake the amended information replaces the original in the data file Before amending a return you CAUTION should archive the original to avoid losing previously submitted data For more information on archiving returns see Archive Ma
15. e according to the latest IRS rules and regulations The 2010 program reflects all IRS changes to credits and deductions including discontinu ations For specific details to the IRS s changes see the IRS instructions for individual forms for tax exempt organizations The following sections list some of the main changes to the 990 package for 2010 General Changes Tax Year 2010 The following changes have been made in various packages within Drake s tax soft ware for 2010 e More Screen to Screen Hyperlinks New hyperlinks have been added within the 990 package These links allow you to access related screens and return to the original screen without the intermediate step of opening the Data Entry Menu e Improved EF Messages and NOTES Pages Many of the EF message and NOTES pages have been rewritten for improved clarity and to better help with troubleshooting returns e Improved Calculation Results Window The Calculation Results window now contains more links to EF messages and enhanced messages New EF Messages for Accepted Returns For returns that have been e filed and accepted by the IRS the program produces EF messages to remind you not to file the return again What s New in Drake for Charities and Non Profits Drake Software User s Manual Form and Screen Changes Form and screen changes to the 990 package include e Multiple Forms 8027 Available Returns can now include multiple Forms 8027 Emp
16. edit for excise taxes 7 D date to print on return 24 depreciation listing 23 diagnostic summary printing a 23 due date printed on letter amp instructions 2 Tax Year 2010 Index E EF messages 1 e filing and PIN signatures 2 19 Form 990 N e Postcard 4 Form 990 T not e fileable 7 PDF files 20 23 process 24 e Postcards Form 990 N 4 error reject codes 25 exempt achievement 13 purpose 13 expenses statement of 12 extension filing an 19 F filing an extension 19 instructions options for 24 filing instructions due date printed on 2 final returns 3 financial statements and reporting Form 990 Part XI 14 on Schedule D Form 990 17 fiscal year indicating a 10 foreign addresses 9 Form 1118 Foreign Tax Credit Corporations 2 Form 8027 Employer s Annual Information Return of Tip Income amp Allocated Tips 2 Form 8868 Application for Extension of Time to File an Exempt Organization Return 2 Form 8868 Application for Extension 19 Form 8941 Credit for Small Employer Health Insurance Premi ums 2 Form 990 Return of Org Exempt from Income Tax 8 19 Form 990 EZ short form return 4 5 Form 990 N e Postcard 4 Form 990 PF private foundations 5 7 Form 990 T business income returns 2 7 8 Form 990 W Estimated Tax on UBTI 2 form type selecting a 9 functional expenses 12 27 Index G governance management amp disclosure 15 gross receipts 12 H header information 3 9
17. eir respective companies Tax Year 2010 Drake Software User s Manual Supplement 990 Table of Contents What s New in Drake for Charities and Non ProfitS lt 0 lt lt 0 1 General Changes saida rr et a des A rd A id 1 Form and Screen Changes on pd a eh dk E REED a TALE inne ATE AD 2 E file Changes es ach sm a s i pa SUDESTE at 2 Printing Options sas ees Ae ee RE E A O A ETA a 2 Getting STATS EA AAA CS TIRED SGT AA 3 Creating a Rebe A A E en edhe S 3 Updating a Prior Year Return a aia a da IE e e TE EIS EE E ER 3 F rm 990 N A II a See E eee as 4 Form 990 EZ A OS A RR AE E ES NE Td dd da PARE 4 oo ASA E A e CR ade 18 EEN CCD IS ER AEE S TS TR e A 5 FONES E guinada wb cds ATA is ad dd Cidia a ER 5 Form 990 PF Screens ui ss pura E geben A ae bate o a 5 Recommended Order for Completing Form 990 PF cccccicicicic er 6 A aa ri dad A EE ssa ds 7 Form 990 T Screens e435 sis apoio od pague dogs ge a A a ERAS RU DD DOOR Ec a 8 POR ee ae oe oe ere Sra ri Dad eee eee an SC E ee dir laa 8 Recommended Order for Completing Form 990 1 0 eect tenet eens 8 Header Information Forms 990 990 EZ 990 PF 990 T 990 N 0 00 cc cece eee ee eens 9 Schedule Read dd a a A Gia GR e pia Ya Wei oa eee ares 10 Part VIL Section seek oe menines peii QD oe OM POG SOR Ew HE Peo hb SD eee 11 Parts VIIL IX and X 0 cece eee E MT E DE E AE A E ED dA 12 Header Line uosa dd rd dub apra 12 Parts MI V VIL and XI
18. eting the OFF screen be aware that the Columns D amp E and Column F sections must be completed e AAN O From From a the Related 990 Columns D amp E 990 EZ amp 990PF included in totals Organization Organization Base compensation 990 990 EZ 990PF Bonus amp incentive compensation 990 990 EZ amp 990PF Other compensation 990 990 EZ amp 990PF 990 Column F Organization amp Related Organization 990 EZ amp 990PF included in totals Deferred compensation Form 990 amp 990 EZ col d Nontaxable benefits 990 990 EZ col c amp 990PF totals o Prior reported compensation Form 990 only paptiputioo to penent pag 8 defe ged campgnsation Gz col A god PF GaN gets TA MA Figure 6 Complete all fields for columns D E and F of the OFF screen Ifan amount is zero enter a zero 0 NOTE Use the IND screen to enter information about compensation of inde pendent contractors Parts VIII IX and X Parts VIII IX and X of Form 990 comprise the financial statements for tax reporting purposes These sections are accessed from screens 8 9 and 10 of the program Tax Year 2010 11 Form 990 Drake Software User s Manual Statement of The program has two screens for Part VIII Statement of Revenue Go to screen 8 to Revenue complete items 1 and 3 through 10 Press PAGE DOWN or click the Lines 2 11 screen hyperlink to access fields for items 2 Program Service Revenue and 11 M
19. f Required Schedules Schedules Schedule A Tax Year 2010 An organization uses Part IV Checklist of Required Schedules to determine which schedules must be completed and filed with the tax return In Drake two screens con tain fields for Part IV Open screen 5 to access fields for lines 3 through 24d Press PAGE DOWN from screen 5 to access fields for lines 25a through 37 Use the Schedules A G and Schedules H R tabs to access schedules Specific schedules can also be accessed using hyperlinks within screens Click a schedule letter or title to open the screen for that schedule Some longer schedules require more than one screen to complete For NOTE example Schedule A consists of screens A A2 and A3 You can access screens A2 and A3 from the Schedule tab or you can press PAGE DOWN from screen A to access subsequent screens Use Schedule A Public Charity Status and Public Support with Form 990 or Form 990 EZ to provide information regarding public charity status and public support Use the following screens to enter data for Schedule A 15 Form 990 Schedule B Contributors Schedule C Political amp Lobbying Schedule D Financial Statements 16 Drake Software User s Manual e Screen A Part I Reason for Public Charity Status required by all organizations filling out Schedule A e Screen A2 Part I Line 11 Information about Supported Organizations e Screen A3 Parts II and III Support
20. ge in name Initial return of a former public charity XI G J Accounting method FT Cash Accrual Other is Is this a group return filed for affiliates l Yes T No Hb Are all affiliates included ocn Yes T No SCH4 Screen for List Hc F Group exemption number aante DA tee latent A A A Apm Figure 4 Screen 1 shows header labels for different forms 1 not all questions are required for all forms 2 If the 990 is a group return filed for affiliates but not all affiliates are included a list of affiliates must be attached to the return Screen SCHA4 is available for this purpose and includes fields for affiliate name address and EIN The Name Control field default on screen SCH4 is the four letter code NOTE used by the IRS to match the information This is an override field and must be completed if name of the affiliate has changed since the entity s last filed return The program uses the current calendar tax year beginning January 1 and ending December 31 by default If the organization uses a fiscal year enter the beginning and end dates in the If not calendar year box on screen 1 Figure 5 lfnot calendar year Fiscal year begins Fiscal yaar CNS oros Figure 5 If not calendar year box on screen 1 Once you have completed the header information on screen 1 the IRS recommends completing Schedule R Related Organizations and Unrelated Partnership Schedule R is used to submit data regarding
21. han 500 000 it can file Form 990 EZ instead 4 Tax Year 2010 Drake Software User s Manual Form 990 PF Form 990 EZ Screens The following screens are specifically provided for completing Form 990 EZ They are grouped under the 990 EZ only heading under the Form 990 990EZ tab Table 1 990 EZ Screens Under Form 990 990EZ Tab Screen Title Section on Form 990 EZ 21 Part Revenue and Expenses 22 Parts Il and III Balance Sheet Accomplishments 23 Part V Other Information Page 1 24 Part VI Section 501 c 3 Only O Schedule O Supplemental Information SCH3 Other Items SCHS5 Part I Line 5c SC21 Unreported Activities SC40 Part Grants and Similar Amounts Paid SC42 Part Il Other Assets Liabilities Screen O for Schedule O Supplemental Information is identical to the NOTE SCH2 screen used for other 990 returns To indicate that the supple mental note is for Schedule O select the appropriate schedule and line from the Schedule drop list on screen O Form 990 PF Form 990 PF must be filed by certain exempt private foundations see the IRS Form 990 PF instructions for specific information on who must file this form NOTE For information on signing a return prior to e filing see Part II Signa ture Block on page 18 Form 990 PF Screens The 990 PF specific screens are located under the Form 990PF tab Figure 2 Form 990 990EZ Schedules A G Schedules H RQForm 990PF Prorm 9907
22. he IRS form instructions for who is required to file Filers of Form 990 should use Schedule D to provide the required reporting for the categories listed in Table 5 Table 5 also shows which screens in Drake are available for completing specific information Table 5 Schedule D Items Covered and Screens Used Category Section of Screen to Use Schedule D in Drake Donor advised funds Part D Conservation easements Part Il D Certain art and museum collections Part III D2 Tax Year 2010 Drake Software User s Manual Form 990 Table 5 Schedule D Items Covered and Screens Used Category Section of Screen to Use Schedule D in Drake Escrow accounts and custodial arrangements Part IV D2 Endowment funds Part V D3 Investments Land Buildings Equipment Part VI D3 Investments Land Buildings Equipment Part VI line 1e D3 click Line 1e Other detail link Supplemental financial information Parts VII through X D4 Supplemental financial statements Parts XI through XIII D5 Press PAGE DOWN to go to the next Schedule D screen Note that Part VI line 1e Other requires a separate screen from the NOTE previous Part VI information To access the screen for this line go to screen D3 and press PAGE DOWN To enter data for Parts VII through X go to screen D4 and select the applicable part from the Part drop list Figure 8 Schedule D Supplemental Financial Statements Part r EA a
23. higher education provision of 13 L letter due date printed on 2 lobbying activities Schedule C 16 long term care services provision of 13 N Name Control field screen 1 10 name of organization 9 narrative information providing 18 natural disaster assistance 13 next year depreciation listing 23 O officer compensation 11 14 order for completing Form 990 8 Form 990 PF 6 organization contact information 9 other IRS filings and tax compliance 14 override of setup options 24 P partnerships unrelated Schedule R 10 PDF files e filing 20 23 PIN signatures 2 19 political campaigns Schedule C 16 preparer signature 18 19 primary exempt purpose 13 prior year returns updating 3 private foundation return Form 990 PF 5 7 proxy tax liability 7 public status amp support Schedule A 16 R real estate investment trusts REITs 7 receipts gross 12 regulated investment companies RICs 7 rehabilitation services 13 reject codes 25 related organizations Schedule R 10 28 Drake Software User s Manual Supplement 990 required schedules checklist of 15 returns creating 3 updating from the prior year 3 revenue statement of 12 S SCH2 attachment screen 7 Schedule A Public Status and Support 2 16 Schedule B Schedule of Contributors 16 Schedule C Political Campaign and Lobbying Activities 16 Schedule D Financial Statements 17 Schedule L Transactions with Interested Pers
24. ication of whether the specified officer signs the return The IND screen has fields for name and address type of service and compensation and a field to enter the number of contractors paid more than 100 000 50 000 for 990 PF in reportable compensation Part XI Financial Statements and Reporting is used for reporting information on the organization s accounting methods and financial statements The accounting method line 1 of Part XI is pulled from the method indicated on screen 1 Use screen 11 to answer all other items for Part XI Schedule L Transactions With Interested Persons 14 Screen L contains fields for completing Parts I through IV of Schedule L Transac tions With Interested Persons All or part of Schedule L may be required for certain organizations that file Form 990 or 990 EZ Schedule L is used for the following pur poses e Reporting information on certain financial transactions or arrangements between the organization and disqualified persons under section 4958 or other interested persons e Determining whether a member of an organizations governing body is an inde pendent member for purposes of Form 990 Part VI line 1b Enter the number of voting members that are independent For information on which organizations must complete all or part of Schedule L see the screen help in the program or consult the IRS instructions Tax Year 2010 Drake Software User s Manual Form 990 Part VI Governance
25. iscel laneous Revenue Statement of Use the organization s normal accounting method to complete Part IX Statement of Functional Functional Expenses Part IX should not be used to report expenses that belong on Expenses lines 6b 7b 8b 9b or 10b of Part VIII Statement of Revenue Part IX has two screens to access the first screen lines 1 though 14 go to screen 9 To access the second screen lines 15 through 26 press PAGE DOWN from screen 10 NOTE The screen help in the program provides further instructions on this section For additional information see the IRS instructions Balance All organizations must complete Part X A substitute balance sheet cannot be used Sheet Part X has two screens to access the first screen lines 1 through 15 go to screen 10 To access the second screen lines 17 through 32 press PAGE DOWN from screen 11 Some end of year amounts require separate schedules Screens for NOTE these schedules can be accessed by clicking the applicable links on screens 10 and 11 Header Line G The program calculates header line G gross receipts automatically based on the information entered in Part VIII lines 6b both columns 7b both columns 8b 9b 10b and 12 Part VIII figures are entered on screen 8 Parts III V VII and XI Once you have completed Box G of the header the IRS recommends completing Parts III V VII and XI of Form 990 screens 3 4 6 IND and 11 Purpose amp Par
26. item 1 in Figure 12 e An Attach PDF button on the toolbar item 2 in Figure 12 Tax Year 2010 21 Using the PRNT Screen Drake Software User s Manual ss SS E 2 O F Data Entry Print Setup Archive Email Refresh Basic Vie 2 Select Forms to View Print ELECTRONIC FILING MEs MUST be corrected before electroni MP celia a e ll mr rr ot e Figure 12 The red MESSAGES page and the Attach PDF button 2 Click MESSAGES to view EF messages including information on how to attach the required documents to the return 3 Click Attach PDF The EF PDF Attachments window displays the information entered on the PDF Attachments window in data entry A red X means the docu ment has not been attached a green check mark indicates an attached document Required PDF Attachments The list below contains PDF Attachments that are required for electronic filing Select an item from the list and click Browse to locate the associated PDF file Items with a green check mark already have the PDF file Items with a red are missing the required PDF File Reference Description Required PDF FileName O 31154 1Line 3 Profit Loss Statements SCHAPARTIPROFITLOSSSTATEMEN 3 3115 C Form 970 for Form 3115 FORM970FORFORM3115 001 PDF pan A mano gi uE SAA A Noga pernos adendo O Figure 13 The EF PDF Attachments window 4 Click the row of a document to attach a Click Browse 6 Browse to the proper folder
27. loyer s Annual Information Return of Tip Income amp Allocated Tips e Form 8941 As with the 1040 package Form 8941 Credit for Small Employer Health Insurance Premiums has been added Use screen 8941 to complete infor mation for this credit NOTE Form 990 T must be used in order to report the Form 8941 credit even if there is no unrelated business income e Schedule A Worksheet The software now produces a Schedule A worksheet for Part II line 5 e Screen W Screen W for Form 990 W Estimated Tax on UBTI is not new to the program but it is now accessible from both the Form 990 T and Form 990 PF tabs of the Data Entry Menu e Screen O Screen O for Schedule O Supplemental Information is not new to the program but it is now accessible from the 990 EZ only section of the Form 990 990EZ tab of the Data Entry Menu E filing Changes Form 8868 Application for Additional Extension of Time to File an Exempt Organi zation Return can now be e filed using Drake Printing Options Four new printing options located on the PRNT screen have been added to the 990 package for 2010 e Change in accounting If this box is marked the program indicates at the top of the 990 form that the organization has changed its accounting period e PIN for preparer s alternative electronic signature To be used for the cli ent s and preparer s copies of a return that has been e filed the PIN entered must match the PIN e
28. m Rela VII Investments Other Securities VIII Investments Program Related IX Other Assets Mi IX5 Other Assets less than 5 Xx Other Liabilities p Y leticia MP spas A sthotn ate apne se MB er Figure 8 For parts VII through X select the applicable part on screen D4 Press PAGE DOWN to access a blank D4 screen and enter data for additional parts Schedule O The IRS provides Schedule O for filers who must include narrative information for Supp Info specific lines Use screen O to provide narrative information for Schedule O and for other schedules N DTE Screen O allows you to enter narrative information for numerous sched ules not just for Schedule O To use screen O 1 Open the screen from the Schedule tab 2 From the Schedule drop list select the schedule and line number s to be addressed on the screen In the Figure 9 example the user has selected Escrow Account Liability in order to address Part IV line 2b of Schedule D Tax Year 2010 17 Form 990 Drake Software User s Manual Supplemental Information and General Explanation Attachment Schedule Escrow account liability Part IV line 2b Not reporting collections Part III line la Collections descriptions Part III line 4 Agent not reporting amounts on 990 Part IV line lb Escrow account liability Part IV line 2b D8 Endowment funds intended uses Part Y line 4 Ls Other change in net assets
29. nager in Chapter 6 Return Results of the Drake Software User s Manual Tax Year 2010 To provide an explanation for an amended return 1 Open screen O from the Schedule A R tab or type O into the selector field and press ENTER 2 From the Schedule drop list select AMD Amended Return Information This selection is located between the N and O items in the Schedule drop list as shown in Figure 11 AMENDED RETURN INFORMATION PAGE 1 LINE 1 Third party arrangements Part I line 32b No revenue reporting for contribution Part I line 33 Additional information Schedule M general Listed person s relations Pt I line 2e or Pt II line 2e Assets distribution Part I line 3 Bond liabilities discharged or defeased Part I line 7c Amended return information Page 1 line 1A Unrelated business income explanation Part YH ine 3b Officer directors etc family relationship Part VI line 2 Management duties delegation Part VI line 3 Organizational document changes Part VI line 4 Asset material diversion Part VI line 5 06 Members or stockholder classes and rights Part YI line 6 Det a A A dio Hall EEEE T dd O END tires Schedule gt A CR D E Figure 11 The AMD selection is listed between the N and O selections 3 Enter the explanation in the text box below the drop list Character limit for e fil ing is 5 000 characters IMPORTANT The amended return should i
30. nclude all information pertaining to the return not just the new or corrected data Binary Attachments Binary or PDF files can be attached to certain tax forms These attachments are gen erally signature or third party documents such as a copy of a signed lease or a signed appraisal statement In some instances the IRS requires that a document be attached to an e filed return in other instances a document can be attached voluntarily to sup port or explain an entry in the return In either case a document must be printed scanned into the computer and attached to the return in order to be e filed with it Attach files through the PDF Attachments screen accessible from the Electronic Filing section on the General tab of the Data Entry Menu This PDF attachment feature is available in several packages in Drake NOTE Some of the examples shown in this section are from other packages 20 but the feature works the same way in all packages Tax Year 2010 Drake Software User s Manual Binary Attachments The PDF Attachment Process Three main steps are involved in the PDF attachment process in Drake 1 Creating a PDF file to be attached 2 Informing the program that a PDF file will be sent with the return 3 Attaching the PDF file for e filing These steps are described in the following sections Creating a To create a PDF file PDF File 1 Scan the document to be attached to the return TIP It s a good idea t
31. need to jump back and forth from one part of the form to another as certain later parts are required in order to complete earlier parts Table 3 Form 990 Recommended Order Seq Section Screens Notes 1 A F H a M 1 This is the Heading section of Form heading 990 line M is completed automatically based on resident state entered 2 Schedule R R R2 R3 Determine related organizations disre garded entities and joint ventures for which reporting will be required See Sch R instructions Form 990 instruc tions Appendix F Disregarded Entities and Joint Ventures 3 Part VII Section A OFF 8 Tax Year 2010 Drake Software User s Manual Form 990 Table 3 Form 990 Recommended Order Seq Section Screens Notes 4 Part VIII IX and X 8 9 and 10 5 Header line G 1 Completed automatically in Drake 6 Parts Ill V VII 3 4 6 IND 11 and Xl 7 Schedule L L Complete if required see Schedule L instructions 8 VI 7 Transactions reported on Schedule L are relevant to determine independence of members ofthe governing body under Form 990 Part VI line 1b 9 l 2 Complete based on information derived from other parts of the form 10 IV 5 Complete this section to determine which schedules must be completed 11 Schedule O and Schedules A any other applica G and Sched ble schedules ules H R tabs 12 ll PIN Setup info See Part II Signature Block on
32. nic Filing Identification Number EFIN in the Return Header must be listed in the e File database and in accepted status F990 913 Tax exempt status specified in Item I must match data in the efile data base R0000 922 Filer s EIN and Name Control in the Return Header must match data in the e File database unless Name Change or Name or Address Change checkbox is checked if applicable R0000 032 If Amended Return or Superseded for 1120 1120S 1120 F checkbox is not checked then taxpayer TIN in the Return Header must not be the same as a TIN of a previously accepted electronic return for the return type and tax period indicated in the tax return 24 Tax Year 2010 Drake Software User s Manual Supplement 990 Index A accomplishments statement of 12 accounting method used 14 address books in care of 14 foreign 9 of 527 organization 16 of affiliates 10 of organization 9 adjustments to balance sheet 24 affiliates 10 amending a return 20 attachments from within data entry 7 general explanation 7 PDF 20 23 auto balance 24 B balance sheet adjustments to 24 screens 12 blank forms 3 books in care of 14 business income returns Form 990 T 7 C Change in accounting 2 charity care for hospital 13 checklist of required schedules 15 commas suppressing 24 compensation of officers etc 4 11 14 contributors Schedule B 16 coversheets options for 24 creating a new return 3 cr
33. ntered in Setup gt Preparer s e 990 T Gross receipts 10 000 or less To be marked if the amount in Part I line 13 column A is 10 000 or less If this box is marked all non required fields on Form 990 T will be blank e Due date to print on letter and filing inst An entry here overrides the default due date that is printed on letters and filing instructions For more information on individual options go to the PRNT screen click the option and press F1 for field level help 2 Tax Year 2010 Drake Software User s Manual Getting Started Getting Started Some early tasks you may need to perform when getting started on a 990 return include creating a return for new clients and updating a return for existing clients Blank forms are a good tool for helping clients collect tax related data NOTE you will need To access blank forms go to Tools gt Blank Forms and select the Tax Exempt tab Select a form from the list and click Print Creating a Return To create a new return in Drake 1 E Open New 2 ad 5 From the Home window click Open New or select File gt Open Create Returns or press CTRL 0 Inthe Open Create a New Return dialog box enter the organization s nine digit identification number Click OK Click Yes when asked if you want to create a new return In the New Return dialog box select Tax Exempt 990 and enter the organiza tion s name Click OK Screen 1 of the
34. o use the DDM scanning feature for this step 2 Save the document to your clients DDM file your computer s desktop or any where you can readily find it Adding PDF To indicate in the software that a PDF file will be sent with the return Files in Drake 1 Open the return in Drake From the Form 990 990EZ tab of the Data Entry Menu click PDF or type PDF in the selector field and press ENTER 2 Fill out the columns on the PDF Attachments screen See Table 6 for examples Table 6 PDF Attachment Window Columns Name of Column Description Examples Reference Source Name or number of regulation IRS Pub xxx 1 4 publication or form instruction that Form Instructions for 990 makes attachments necessary Description Description of form or documentto Title of house on Oak Street be attached Appraisal of Lot 1234 File name Distinctive easily recognizable file TitleHouseOakSt pdf name followed by pdf AppraisalLot1234 pdf 3 Exit the PDF Attachments window Because you ve indicated that a PDF file is attached the program generates an EF message page regarding the attachment when the return is calculated Attaching To attach a PDF file to a return Documents to the Return 1 From the return click View If anything was entered in the PDF Attachments window see Adding PDF Files in Drake previously there will be two PDF related items in the View Print window e A MESSAGES alert
35. ons 15 Schedule O Supplemental Information 2 18 Schedule R Related Organizations and Unrelated Partner ship 10 schedules checklist of required 15 SERVICES pages 13 setup options overriding 24 short form returns Form 990 EZ 4 signature block 18 19 statement see also financial statements of functional expenses 12 of program service accomplishments 12 of revenue 12 summary on Form 990 Part I 15 report printing 23 supplemental information Schedule O 18 suppressing commas 24 T tax compliance statements Part V of Form 990 14 excise credit for 7 liability reporting 7 year specifying a 10 transactions Schedule L 15 type of form selecting 9 U unrelated business income reporting 7 updating a prior year return 3 V volunteers 15 Tax Year 2010
36. orm 990 Other IRS Filings Compen sation Financial Statements amp Reporting Drake Software User s Manual To enter another achievement press PAGE DOWN and mark the box labeled Check this box if starting a new description The second description entered is shown or referenced on a SERVICES page if applicable see Figure 7 in section 4b of Part II A third description is printed or referenced in section 4c Additional descriptions are shown on a SERVICES page generated with the return The exempt achievement description has a 5 000 character limit for e NOTE filing if the description exceeds 5 000 characters the return must be paper filed Part V Statements Regarding Other IRS Filings and Tax Compliance is used to show the organization s compliance with the requirements of other federal tax laws for reporting and substantiation Use screen 6 in the program to enter data for Part V In Drake Part V consists of two screens use screen 6 to answer items 1 through 6b press PAGE DOWN from screen 6 to access items 7 through 12 Part VII reports compensation paid to officers directors trustees key employees highest compensated employees and independent contractors For Form 990 990 EZ or 990 PF use the OFF screen for officers etc and the IND screen for independent contractors to enter this information The OFF screen also has fields for entering an officer address books in care of information and an ind
37. p gt Firm s in order to e file a tax return For more information on setting up firm preparer and ERO informa tion in Drake see Drake Software User s Manual Tax Year 2010 Note about Generally anyone who is paid to prepare the return must sign the return and fill in the Preparer ID other blanks in the Paid Preparer s Use Only area of the return An employee of a filing organization is not a paid preparer In order to have the preparer ID number PTIN or SSN printed in the applicable space on the return the preparer must e Sign the return in the space provided for the preparer s signature 18 Tax Year 2010 Drake Software User s Manual Filing an Extension e Enter the preparer information e Give a copy of the return to the organization The paid preparer must enter the preparer s ID number PTIN or SSN and the firm s EIN only if filing Form 990 990 PF or 990 EZ for section 4947 a 1 nonexempt charitable trust that is not filing Form 1041 The IRS is not authorized to redact delete the paid preparer s SSN if the SSN is entered in the paid preparer s block Form 990 IMPORTANT is a publicly disclosable document Any paid preparer whose ID number must be listed on Form 990 may wish to apply for and obtain a PTIN using Form W 7P Filing an Extension Calendar year returns are due on May 16 2011 If an organization uses a fiscal year the return is due by the fifteenth day of the fifth month after the ac
38. preciation listing I Change in accounting PIN for preparer s alternative electronic signature Items to Suppress M Commas Form 990 Part IX print only column A if not 501 c 3 or 4 M 990 T Gross receipts 10 000 or less Figure 14 PRNT screen options The following items can be suppressed from the PRNT screen of a 990 return see Figure 14 e Commas from the amounts printed on the forms e Columns B C and D of Form 990 Part IX if the organization is not a 501 c 3 or 501 c 4 organization Only Column A Total expenses would be generated for this section of Form 990 e Ddata for non required fields on Form 990 T of gross receipts are 10 000 or less Overriding Other Setup Options Tax Year 2010 Filing instructions federal and state and envelope coversheets organization IRS and state can be either forced or suppressed from the PRNT screen to override the global setting in Setup NEW FOR A default due date for filing is printed on all letters and filing instructions generated with a return You can now override the default by entering 2010 an alternate due date in the Due date to print on letter and filing instructions field on the PRNT screen You can also enter the date to be printed on the return In Setup gt Options gt Optional Items on Return you can indicate if the return should have no date or if it should have the current system date Use the PRNT screen to override the setup option choice fo
39. r a return 23 Electronic Filing Drake Software User s Manual Turn Off Autobalance Autobalance forces the balance sheet to balance for both the beginning and end of year amounts by adjusting net assets or fund balance The program makes the adjustments due to differences in the balance sheet Incorrect data entry could cause these differences but they are usually the result of amounts being erroneously deleted or changed from the balance sheet screens To reconcile the differences it is best to compare the organization s beginning and ending balance sheet amounts for the tax year To turn off this feature for a specific return go to the PRNT screen and select Turn off autobalance Electronic Filing An organization has the option to e file Form 990 990 EZ 990 PF and related forms schedules and attachments If the organization files at least 250 returns during the cal endar year and has total assets of 10 million or more at the end of the tax year it is required to e file Form 990 NOTE Form 990 T cannot be e filed Steps for e filing Form 990 are the same as for e filing Form 1040 For detailed instructions on e filing returns in Drake see Drake Software User s Manual Tax Year 2010 IRS Error Reject Codes If the following IRS error reject code is generated when e filing a 990 return the pre parer must contact the IRS for further information The e file help desk number is 866 255 0654 R0000 905 Electro
40. select the PDF file to attach and click Open or dou ble click the file name Repeat for all documents with a red X When all documents have been attached to a completed return the return is ready to be e filed Printing Generated Documents In some instances Drake generates a document that must be printed signed and scanned back into the computer to be attached to the return An EF message will states that attachments are required You would then need to obtain or complete the state ments scan them into the computer save them as a PDF file and attach them to the return Using the PRNT Screen Use the PRNT screen to override most program defaults 22 Tax Year 2010 Drake Software User s Manual Using the PRNT Screen Suppressing Forcing Items To suppress or force printing of certain items go the PRNT screen and select the desired options Selections override the options established in Setup For more on set ting up options globally in Drake see Drake Software User s Manual Tax Year 2010 The following items can be forced from the PRNT screen see Figure 14 e Diagnostic summary report listing the forms calculated and providing a brief sum mary of the return e Next year depreciation listing for the organization e Indication on return that organization has changed its accounting period e Preparer PIN for preparer and client copies of a return that has been e filed Items to Print Summary M Next year de
41. ss cana de ton ESSA a te Ww EE amp EGO wk o o Sole ed lech eles RSE ee AER ew al ee 12 Schedule L Transactions With Interested Persons eu EREA A 15 Part VI Governance Management and Disclosure un e a ea e e cece ccc eee eens 15 Part Summary aa areal wate Ea a E AA E 15 Part IV Checklist of Required Schedules 0 0 cc ccc eect nen e nes 15 Schedules a a da a Bi a aaa ve 16 Part ll Signature Block sara scene coating Gwe Wane A A ai 18 Filing ANEXA cierra Cr id RPE Deda CATA CIA ee ee ee ened 19 Amending a EEUU caist Seti asp ns E tee a e dias 20 Binary Attachments sasssnpasasiars rsss GRSA E ES a deen 20 The PDF Attachment Process 21 Printing Generated Documents o ooo ooo 23 Using the PRNT S6re n si AA EU a 23 Suppressing F rcing Hs a a io 23 Overriding Other Setup Opti0NOS o oooooooooor ea 24 Turn Off Autobalante nt a ii 24 Tax Year 2010 iii Drake Software User s Manual Supplement 990 Electronic PINO varices tana ETA AAA 24 IRS Error Reject Codes mis sons tds Eee Soda da aa os 25 o Ag 27 iv Tax Year 2010 Charities and Non profits 990 Data entry on a tax exempt organization 990 return is the same as data entry on the 1040 Help shortcut keys and navigation through data entry all function as they do in the 1040 See Drake Software User s Manual Tax Year 2010 for the basics of using the program What s New in Drake for Charities and Non Profits Drake programs its tax softwar
42. t III Statement of Program Service Accomplishments requires that the organiza Achievement tion report its new ongoing and discontinued exempt purpose achievements along with any related revenue and expenses In Drake Part III of Form 990 consists of two screens Use screen 3 to answer items 1 through 3 exempt purpose Use screen 4 to complete the line 4 items exempt pur pose achievements From screen 3 you can access screen 4 by pressing PAGE DOWN Exempt Use the Primary exempt purpose field on screen 3 to describe the organization s Purpose mission The mission statement can address why the organization exists what it hopes to accomplish whom it intends to serve and activities it will undertake and where See IRS instructions for further information on what constitutes a mission 12 Tax Year 2010 Drake Software User s Manual Form 990 NOTE If the organization does not have a mission that has been adopted by its governing body type None as the Primary exempt purpose Ifyou answer Yes to question 2 or 3 on screen 3 use Schedule O screen O to describe any new services or changes to services From screen 3 you can click the Sch O Screen hyperlink to access this screen See Schedule O Supp Info on page 18 for more information about filling out Schedule O in the program Exempt Enter expenses revenue and a description of the exempt purpose achievements on Achievement screen 4 Examples of exempt achievements include
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