Financial information and user fees Applications for exemption and miscellaneous determination requests are assigned to Exempt Organizations specialists for review. If additional information is necessary to make a determination, a specialist will contact the organization for the information. Here’s a list of questions that might be asked on this topic. Your application didn't contain sufficient information about your revenues and expenses. Provide your revenues and expenses following the guidelines in a. or b. below. We recommend you complete and submit the information in a similar format to Form 1023, page 13. If you've been in existence for less than 5 years, provide actual revenue and expenses for each year in existence. Provide projections of your likely revenues and expenses based on a reasonable and good faith estimate of your future finances. If you haven't completed 1 tax year, include projections for 3 years of financial information. If you've completed 1 tax year, provide 4 years of financial information. If you've been operating for 5 or more years, provide your actual revenue and expenses for your most recent 5 tax years. Note: If using Form 1023, page 13, to submit your information, you'll need to provide a separate statement that includes information for 1 tax year because the data table only contains 4 years. Form 1024 revenues and expenses incomplete or missing Your application didn't contain sufficient information about your revenues and expenses. Provide your revenue and expenses following the guidelines below. We recommend you complete and submit Form 1024, page 12. Provide actual information for your current year and each of the 3 years immediately before (or the years the organization has existed, if less than 4). If you've existed less than 1 year, provide information for the current year and proposed budgets for the following 2 years. Form 1024-A revenues and expenses incomplete or missing Your application didn't contain sufficient information about your revenues and expenses. Provide your revenue and expenses following the guidelines below. We recommend you complete and submit Form 1024-A, page 13. Provide actual information for your current year and each of the 2 years immediately before (or the years the organization has existed, if less than 3). If you've existed less than 1 year, provide information for the current year and proposed budgets for the following 2 years. Itemized revenue information needed Provide your expected revenue, itemized for tax years [insert years]. Include both the type and amount of the revenue. Be as specific as possible. Itemized expense information needed Provide your expected expenses, itemized for tax years [insert years]. Include both the type and amount of the expense. Be as specific as possible. Statement of revenues and expenses lists UBI (line 4 of Application Statement of Revenue and Expenses) You reported income from unrelated business income on your Statement of Revenues and Expenses. Describe the sources of this income. Statement of revenues and expenses lists interest expense (line 19-1023, line 15-1024) You reported interest expense on your Statement of Revenues and Expenses. Describe the sources of this expense. If the interest is related to a mortgage or note payable, then list each payable and: If the mortgage or note is with an unrelated, established bank, provide a copy of the loan term and rate. If the mortgage or note is with a related party, provide a copy of the mortgage or note that clearly indicates the terms and interest rates. Explain how loan terms were determined or negotiated and provide documentation, if available, of average loan rates at the time of the loan. Balance sheet lists bonds and notes receivable (line 4 of Application Balance Sheet) You reported “bonds and notes receivable” on your balance sheet. Send an itemized list of these assets. Balance sheet lists mortgage and notes payable (line 14 of Application Balance Sheet) You reported “mortgages and notes payable” on your balance sheet. List all mortgages and notes payable and provide the following for each: If the mortgage or note is with an unrelated, established bank, provide a copy of the loan term and rate. If the mortgage or note is with a related party, provide a copy of the mortgage or note that clearly indicates the terms and interest rate. Explain how loan terms were determined or negotiated and provide documentation, if available, of average loan rates at the time of the loan. Balance sheet lists “other liabilities” (line 15 of Application Balance Sheet) You reported “other liabilities” on your balance sheet. Send an itemized list of these liabilities. Unusual grant (line 12 of Form 1023, Statement of Revenue and Expenses) You indicated for the year ended [year], you received an unusual grant of [amount] from [donor]. Provide answers for the following and explanations when needed: Was the donation unusual compared to donations that you normally receive? Did you receive the donation unexpectedly? Was the donation cash, marketable securities or other assets that directly further your exempt purposes (for example, a gift of a painting to a museum)? Did the donor place any material restriction or conditions on the award? If so, what are they? Was the donation a bequest or an inter vivos transfer (a transfer or gift during one's lifetime)? Before you received the donation, did you have a program to attract broad public support? If so, please describe. Do you expect to attract a significant amount of public support in the future? Was the donor a creator of your organization or do they stand in a position of authority, such as foundation manager? Does the donor, or any person related to the donor, exercise direct or indirect control over you? Additional information See the complete list of applying for exemption/miscellaneous determination sample questions by topic.
