Form 990-T

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Form 990-T

A form that a tax exempt organization files with the IRS to report its unrelated business income and to figure the tax owed on that income.
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6104(d)(1)(A) (ii), Sec 501(c)(3) organizations now have to disclose publicly their Forms 990-T, Exmpt Organization Business Income Tax Return.
The new disclosure provisions are contained in the Pension Protection Act of 2006, Section 1225, and are effective for Forms 990-T filed after Aug.
Recently released IRS statistics for 2002 show a decline in the number of Forms 990-T filed and UBIT paid over the previous four years; four out of 10 Forms 990 filed could not be reconciled with Forms 990-T; and 28% of returns reported no gross UBI on Form 990 and net UBI losses on Form 990-T (see Riley, "Unrelated Business Income Tax Returns, 2002: Financial Highlights and Special Analyses of Exempt-Organization Repotting Quality," available at www.
Exempt organizations can expect that watchdog groups and the media will scrutinize Forms 990-T.
Taxable profits from "unrelated business income" reported by 39,302 nonprofit organizations on Forms 990-T, Exempt Organization Business Income Tax Returns, rose 18 percent between Tax Years 1996 and 1997, amounting to $1.
IRA trusts that reported $10,000 or less of gross UBI made up 92 percent of all IRA trusts filing Forms 990-T for 1997; for 1996, the proportion was 94 percent.
Given the large share of the IRA trust population in the smaller-size-organization group, the $1,000 gross UBI threshold for filing a Form 990-T, and the fact that partnership income (less loss) traditionally is the principal source of income (86 percent for 1997) for IRA trusts reporting gross UBI of $10,000 or less, it is reasonable to assume that changes in partnership investment activities experienced by organizations in the smaller gross UBI bracket can be tied to the decline in Forms 990-T filed between 1996 and 1997.
For comparison, only about 19 percent of section 501(c)(3) "charitable" organizations (the largest Code section group in terms of the number of Forms 990-T filed) with gross UBI of $10,000 or less filed a 1996 return, but not a 1997 return [3].
About 5 percent of all Tax Year 1997 Forms 990-T were filed by the large organizations, but they accounted for slightly more than three-quarters of the $7.
8 billion, or 23 percent of the total for 1997, and accounted for 53 percent of all Forms 990-T filed.
These organizations filed 42 percent of all Forms 990-T, but represented less than 1 percent of total gross UBI reported by all organizations for 1997.
6104(d)-3(b)(4)(ii), Forms 990-T, Exempt Organization Business Income Tax Return, 1120-POL, U.