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FORM 990 - WE ARE FAMILYOn page 6 of the 2005 990, you will find a question that has not been asked on previous versions of the form. Question 75b asks you, “Are any officers, directors, trustees, or key employees, … highest compensated employees, …. or highest compensated professional and other independent contractors… related to each other through family or business relationships.” The IRS wants to know if the Executive Director is the brother of a Board member and if the Senior Program Manager is a partner is the consulting firm that provides evaluation services. Staff of the IRS was asked how much effort must the 990 preparer undertake to obtain the information requested. The response was that the filing organization must make a reasonable effort to obtain the information and provide accurate information on the 990. The IRS further stated that an example of a reasonable effort would be for either an officer eligible to sign the 990 or the preparer of the 990 to distribute a questionnaire annually to those individuals (officers, directors, trustees, etc.) The dated and signed questionnaires would provide documentation to support the response to 75b. Below is a sample questionnaire to use when preparing the 990.
FAMILY AND BUSINESS RELATIONSHIP QUESTIONNAIRE Attached is a listing of officers, directors, trustees, key employees, the five highest compensated employees, and the five highest compensated professional and independent contractors. The IRS Form 990 requires that the organization report if any of these individuals are related to each other through family or business relationships. The IRS definitions are: Family relationships include an individual’s spouse, ancestors, children, grandchildren, great-grandchildren, siblings (whether by whole or half blood), and the spouses of children, grandchildren, great-grandchildren, and siblings. Business relationships are employment and contractual relationships, and common ownership of a business where any officers, directors, or trustees, individually or together, possess more than a 35% ownership interest in common. Ownership means voting power in a corporation, profits interest in a partnership, or beneficial interest in a trust. _________________________________________ _____________ o I have a family or business relationship with someone on the attached list. Name of related person:_______________________________________ (Use reverse of this form if more than one related person.) _________________________________________ _____________
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