Form 990 Schedule G details a nonprofit’s financial activities, focusing on fundraising events, grants, and supplemental information, ensuring IRS compliance and transparency.
Overview of Schedule G
Schedule G, officially titled “Supplemental Information Regarding Fundraising and Gaming Activities,” is a crucial component of the Form 990 series for tax-exempt organizations. It serves as a dedicated space to report detailed information about fundraising campaigns, professional fundraising services utilized, and any gaming activities undertaken during the tax year.
This supplemental form isn’t a standalone document; it must be attached to either Form 990 or Form 990-EZ when specific conditions are met. It’s designed to provide the IRS with a clearer picture of how a nonprofit generates revenue beyond standard contributions, ensuring accountability and adherence to tax regulations. The information disclosed on Schedule G helps the IRS assess compliance and prevent misuse of tax-exempt status.
Essentially, Schedule G promotes transparency in the financial dealings of nonprofits, allowing stakeholders and the public to understand how these organizations fund their missions.
Purpose of Schedule G for Tax-Exempt Organizations
The primary purpose of Schedule G is to ensure tax-exempt organizations fully disclose details regarding their fundraising and gaming activities to the IRS. This detailed reporting fosters transparency and accountability, vital for maintaining public trust and upholding the integrity of the nonprofit sector.
Specifically, Schedule G allows the IRS to scrutinize revenue sources beyond typical donations, like professional fundraising services and gaming income. This scrutiny helps prevent potential abuses of tax-exempt status and ensures funds are used appropriately for the organization’s mission.
By completing Schedule G, organizations demonstrate their commitment to compliance with IRS regulations and provide a comprehensive financial picture. It’s a key tool for the IRS to assess an organization’s financial health and operational practices, ultimately safeguarding the public interest.
Who Must File Schedule G?
Organizations filing Form 990 or 990-EZ, answering “Yes” on Part IV lines 17, 18, or 19, or exceeding $15,000 in fundraising/gaming, must file.
Form 990 Filers
If your organization files the comprehensive Form 990, you are generally required to complete and submit Schedule G alongside your annual return. This is because Form 990 collects detailed financial information, and Schedule G provides the necessary supplemental data regarding fundraising and gaming activities. Specifically, if you answered “Yes” to any of the questions on Form 990, Part IV, lines 17, 18, or 19, you must include Schedule G with your filing.
These lines pertain to professional fundraising services, fundraising events, and gaming activities, respectively. Schedule G allows the IRS to gain a clearer understanding of how your organization generates revenue through these specific avenues. Completing all relevant sections of Schedule G accurately is crucial for maintaining your tax-exempt status and ensuring compliance with IRS regulations. Remember to thoroughly review the instructions for Schedule G to ensure you are reporting all required information correctly.
Form 990-EZ Filers and Filing Thresholds
Organizations filing the simplified Form 990-EZ may also be required to file Schedule G, but the requirements differ from those for Form 990 filers. Generally, 990-EZ filers are not required to complete Part I of Schedule G. However, you must file Schedule G if your organization’s gross receipts from fundraising events exceed $15,000, or if your gross income from gaming activities surpasses the same $15,000 threshold.
These thresholds trigger the need for the supplemental reporting provided by Schedule G, even with the streamlined 990-EZ form. It’s important to note that exceeding either of these thresholds necessitates the inclusion of Schedule G with your 990-EZ filing. Carefully assess your organization’s income from these sources to determine if Schedule G is required to maintain compliance with IRS regulations and avoid potential penalties.
Schedule G: Part I ‒ Fundraising Activities
Part I of Schedule G reports details about professional fundraising services and fundraising events conducted by the tax-exempt organization during the reporting year.
Reporting Professional Fundraising Services
When reporting professional fundraising services on Schedule G, organizations must disclose details about any firm or individual hired to solicit contributions on their behalf. This includes providing the name of the fundraising service provider, the total amount of gross receipts received from the professional fundraiser, and the amount paid to the fundraiser for their services.
Organizations are also required to indicate whether the fundraising services were conducted on a transaction basis (where the fundraiser retains a percentage of contributions) or on a salary or fee basis (where the fundraiser receives a fixed payment). Accurate reporting of these details is crucial for ensuring transparency and accountability in fundraising practices. The IRS uses this information to assess compliance with regulations governing charitable solicitations and to prevent potential fraud or abuse. Proper documentation supporting these reported amounts is essential during an audit.
Reporting Fundraising Events
Schedule G requires detailed reporting of fundraising events, particularly for organizations filing Form 990-EZ with gross receipts exceeding $15,000 from such events. Organizations must report the gross income and expenses associated with each fundraising event conducted during the tax year. This includes events like galas, auctions, concerts, and other activities specifically designed to raise funds for the organization’s mission.
The reporting should clearly differentiate between direct fundraising expenses (costs directly related to the event) and other expenses. Accurate reporting helps the IRS evaluate the efficiency and effectiveness of fundraising efforts. Organizations should maintain thorough records of event income and expenses to support the information reported on Schedule G, as this information is subject to review during an audit.
Schedule G: Part II — Gaming Activities
Schedule G’s Part II reports gaming income and expenses, including details on activities like bingo, raffles, and casino-style games conducted by the organization.
Reporting Gaming Income
When completing Schedule G, organizations must meticulously report all income derived from gaming activities. This encompasses gross revenue generated from various games, such as bingo, raffles, and casino-style events. Accurate reporting is crucial for maintaining compliance with IRS regulations and demonstrating financial transparency.
Specifically, organizations need to detail the type of gaming activity, the gross income received from each, and any direct expenses associated with those activities. This includes the cost of prizes, supplies, and any other expenditures directly related to running the games. The IRS requires a clear distinction between gross income and net income from gaming, as this impacts the organization’s tax-exempt status.
Furthermore, organizations should be prepared to substantiate the reported income and expenses with supporting documentation, such as game records, receipts, and bank statements. Proper record-keeping is essential in case of an IRS audit. Failing to accurately report gaming income can result in penalties and jeopardize the organization’s tax-exempt status, so diligence is paramount.
Reporting Gaming Expenses
Schedule G requires tax-exempt organizations to comprehensively report all expenses directly related to their gaming activities. These expenses are crucial for calculating net gaming income, which impacts the organization’s financial reporting and tax obligations. Accurate expense tracking demonstrates responsible financial management and adherence to IRS guidelines.
Reportable gaming expenses include the cost of prizes awarded, supplies used in the games (like bingo cards or raffle tickets), advertising and promotional costs specifically for gaming events, and any direct labor costs associated with running the games. It’s vital to distinguish between direct and indirect expenses; only direct costs should be included here.
Organizations must maintain detailed records to support the reported expenses, such as invoices, receipts, and payroll records. The IRS may request this documentation during an audit. Proper expense reporting ensures transparency and helps avoid potential penalties. Thoroughness and accuracy are key when completing this section of Schedule G.
Schedule G: Part III ‒ Supplemental Information
Part III of Schedule G allows nonprofits to provide additional details regarding fundraising and gaming activities, enhancing transparency and clarifying reported information.
Providing Additional Details on Fundraising and Gaming
Schedule G’s Part III serves as a crucial space for tax-exempt organizations to expand upon the information initially presented in Parts I and II. This section isn’t merely a formality; it’s an opportunity to offer the IRS a more comprehensive understanding of your organization’s fundraising and gaming endeavors.
Specifically, organizations can utilize this part to clarify any unusual circumstances or complexities related to their fundraising campaigns or gaming activities. For instance, if a fundraising event involved significant in-kind donations, detailing these contributions in Part III provides a clearer picture of the event’s true economic impact.
Similarly, for gaming activities, organizations can elaborate on any unique aspects of their operations, such as the types of games offered, the methods used to ensure fair play, or any specific challenges encountered. Thoroughly completing Part III demonstrates a commitment to transparency and can help avoid potential scrutiny from the IRS. It’s a vital component of maintaining compliance and upholding the public trust.
Filing Requirements and Deadlines
Annual filing of Form 990 with attached Schedule G is mandatory for eligible tax-exempt organizations; extensions are available using Form 8868.
Annual Filing Requirement
All tax-exempt organizations that routinely file either the comprehensive Form 990 or the simplified Form 990-EZ are generally required to complete and submit Schedule G alongside their annual information return.
This requirement is triggered if the organization answered “Yes” to questions on Form 990, specifically Part IV lines 17, 18, or 19. These lines pertain to whether the organization conducted professional fundraising services, fundraising events, or gaming activities during the reported tax year.
Even Form 990-EZ filers aren’t exempt; if their fundraising event totals or gaming gross income surpass $15,000, they must also file Schedule G. It’s crucial to note that 990-EZ filers typically do not complete Part I of Schedule G, focusing instead on relevant sections pertaining to their specific activities.
Extension of Time to File (Form 8868)
If a tax-exempt organization anticipates difficulty meeting the standard filing deadline for Form 990, including the attached Schedule G, an extension of time to file can be requested using Form 8868, officially titled “Application for Extension of Time To File an Exempt Organization Return.”
Filing Form 8868 doesn’t grant an extension to pay any taxes owed; it solely extends the deadline for submitting the information return and Schedule G. Organizations must still estimate and remit any tax liability by the original due date to avoid penalties.
The extension period granted is typically six months from the original due date. It’s vital to submit Form 8868 before the original filing deadline to ensure the extension is processed and approved. Proper and timely filing of Form 8868 is crucial for maintaining compliance with IRS regulations.
Resources and Where to Find More Information
The IRS website offers official Schedule G instructions, while Tax990 and similar sites provide helpful guidance and resources for nonprofits.
IRS Website and Official Instructions
The Internal Revenue Service (IRS) website is the primary and most authoritative source for information regarding Form 990 Schedule G. You can directly access the official instructions in PDF format, providing a comprehensive guide to completing each section accurately. These instructions detail specific requirements for reporting fundraising activities, gaming income, and any supplemental information the IRS may need to assess your organization’s compliance.
Navigating the IRS website (irs.gov) can sometimes be challenging. Search specifically for “Form 990 Schedule G Instructions” to locate the relevant document quickly. The instructions include detailed explanations, examples, and definitions of terms used on the form. It’s crucial to consult the latest version of the instructions, as they are updated periodically to reflect changes in tax law or IRS policy. Furthermore, the IRS provides frequently asked questions (FAQs) that address common issues encountered by filers, offering additional clarity and support. Utilizing these official resources ensures you remain compliant with all applicable regulations.
Tax990 and Other Helpful Websites
Beyond the IRS website, several reputable online resources offer valuable assistance with Form 990 Schedule G. Tax990 (tax990.org) is a particularly useful platform, providing updated information, articles, and guides specifically focused on nonprofit tax compliance. They frequently publish content addressing Schedule G filing requirements and common challenges faced by organizations.
Other helpful websites include those maintained by accounting firms specializing in nonprofit taxation and organizations dedicated to supporting the nonprofit sector. These resources often feature blog posts, webinars, and downloadable templates to streamline the filing process. However, always verify the information against the official IRS instructions to ensure accuracy. Remember that while these websites can offer valuable insights and practical guidance, they should not be considered a substitute for professional tax advice or the official IRS documentation. Prioritize the IRS instructions for definitive guidance on Schedule G completion.