Related Organizations - Everything You Need to Know

Session 1 of Borenstein's Form 990 Foundational Series (NOTE: CREDITS & LEVEL HAVE BEEN EXPANDED FOR 2023-2024 YEAR!) A "related organization" for ...

12/5/2023 12:30pm - 3:00pm  |  Online  |  CPA Crossings


CPE Categories: Taxation (2.5 CPE)

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Session 1 of Borenstein's Form 990 Foundational Series (NOTE: CREDITS & LEVEL HAVE BEEN EXPANDED FOR 2023-2024 YEAR!) A "related organization" for Form 990 purposes is a unique concept that does not tie to generally employed business or accounting definitions. Identifying such entities is a crucial first preparation step called for in the 990 instructions. Indeed, the presence of "related organizations" impacts the managers reported on the Core Form's Part VII-A and various other 990-reporting disclosures! This 990 "term-of-art" is deceptive, starting out with "parents," "subsidiaries," and "siblings," but applying a unique and extremely broad definition of "control". This session fully illuminates, with real-world explanations, both key "basics" and common nuances that readers and preparers of the 990 need be aware of in testing for "control" of a nonprofit organization or when control is not direct but may be "indirect." Multiple examples covering the precepts in this realm are provided. While the focus here is on properly identifying a filer's related organizations, the disclosures required on Form 990's Schedule R are also covered. This event may be a rebroadcast of a live event and the instructor will be available to answer your questions during the event.

Presented by Eve Rose Borenstein, LLC

Instructor: Eve R. Borenstein, J.D.

Target Audience

Public accounting tax staff and audit personnel, nonprofit organization's Treasurers and CFOs, and finance or compliance consultants serving 990 filers.

Course Objectives

After attending this presentation, you will be able to...

  • Identify the principles by which control vests in determining parent (of subsidiary), subsidiary (of parent), or sibling status between the filer and a not-for-profit organization
  • Identify how control vests over an entity that is a stock corporation
  • Apply the principles that yield "commonly controlled" related organizations (i.e., sibling organizations)
  • Distinguish the baseline information required when reporting existence of related organizations in Schedule R's Parts II (tax-exempt entities), Part IV (corporations or trusts), and Part III (partnerships)
  • Recognize the info disclosure sought in Schedule R's Part V with respect to TYPES of transactions with related organizations and when specific dollar disclosure is required


The major topics covered in this class include:

  • The reach of "parent-subsidiary" and "sibling" status when the party who is the subject of "control" is a nonprofit/nonstock entity [note this applies both to ascertaining whether the filer is "controlled by" a related organization OR itself "controls" another nonstock entity]
  • Understanding what is considered "control" when a potential related organization is: a stock corporation versus a partnership or an LLC taxed as a partnership versus a trust
  • The challenges of both finding "directly-controlled" related organizations versus imputing related organization status through "indirect control"
  • The two automatic status categories of related organizations: supporting organization connections (one entity being a 501(c)(3) with 509(a)(3) sub-classification from connection to another entity) and VEBA-unique categories
  • Overview information sought on Schedule R's Parts II-IV once the presence of one or more related organizations is ascertained
  • Schedule R Part V disclosure demands when a related organization is a "controlled entity" under, and thus subject to, Code section 512(b)(13)'s UBIT-reach
  • Overview of the Schedule R Part V disclosure requirements for 501(c)(3) filers who have a related organization itself recognized as tax-exempt under 501(c)(x) other than 501(c)(3)