2008 Form 990: Related Organizations
In the 2008 Form 990 instructions, the I.R.S. recommends a sequencing list for completing the core form and schedules. Chronologically second on this list, after completing some basic information on the core form, the I.R.S. recommends determining the filing entity’s “related organizations”?
What is a related organization?
The I.R.S. definition, simplified, characterizes a related organization as an organization that stands in a parent, subsidiary, brother/sister, and/or supporting/supported relationship with the filing organization. Disregarded entities (for example, single member LLCs) are treated as part of the filing organization and not as related organizations.
If you are not directly responsible for preparing Form 990, why might you care about this definition of related organization?
The related organization concept is significant to various disclosures in separate parts of the 2008 Form 990. By way of example:
(1) If you are a listed person in Part VII, Section A of the core form (i.e., director/trustee, officer, key employee, or highest compensated employee), compensation from a related organization may be reportable on the core form or Schedule J. (We will save discussion on listed persons and compensation for another day.)
(2) Transactions with related organizations are transparent under Schedule R of the 2008 Form 990, which, among other disclosures, generally requires identification of related organizations and disclosures on transactions with related organizations.
