Section I, Page 1



Filing Procedure for YFC 2004-2005 Charter Reports

Please read the following instructions carefully before filling out the forms.

If you do not fill out the forms on the computer, but do them manually, carefully type or print in black ink the required information on all forms. (Blue ink does not reproduce well on photocopying machines.) Please do not use pencil.

It is imperative that the Executive Director and Board Chairperson sign the Certificate of Review for both Packet 1 and Packet 2, plus the Annual Chapter Report, Annual Participation Fee Report upon their completion. IRS Forms 990, 990T and 990EZ must be signed by an officer of the corporation, which may or may not be the Executive Director. Please note that the preparer, if paid, must also sign the IRS forms.

By August 30, 2005 - Send two copies of the following reports to your Regional Service Center and retain the original for your files. (See 2005Chapter Report Checklist.doc)

➢ 2005 Annual Ministry Impact Census Report.xls

➢ 2005 Paid Staff Listing – make corrections and return the list included in this packet – this is a paper copy NOT a computer file.

➢ 2005 Board Member Roster.doc – If you have a list compiled that includes all of the information requested, you may send that in place of this form.

➢ 2005 Charter Covenant.doc (this is for reference – only return the signature page)

➢ 2005 Charter Covenant Signature Page.doc This must be signed by both the Chapter E.D. and Board Chair.

➢ 2005 Certification of Review of Materials Packet 1.doc

• By September 30, 2005 - Send two copies of the following reports to your Regional Service Center. (See following pages for explanation of requirements) Retain a copy for your files.

➢ June 30, 2005 independent CPA reviewed or audited financial statements

➢ Review or Audit

➢ The original and two copies of all required 2004 Internal Revenue Service forms (990 or 990EZ, Schedule A, Schedule B, and 990T)

➢ 2005 Annual Participation Fee Report.doc (with a check for balance due if indicated – your application will not be processed without full payment of outstanding fees.)

➢ 2005 Annual Chapter Report.doc

➢ 2005 Certification of Review of Materials Packet 2.doc

• Please be sure that the Certification of Review of Materials forms have been signed by the ED and Board Chairperson for each packet submitted. Two copies of this form should accompany the packets being sent to the Regional Service Center by August 30th and September 30th.

Financial Accountability Requirements

You will need to arrange for a CPA outside of your local organization to complete the

audit, review or compilation requirement prior to September 30, 2004 according to the

schedule below.

1. 990 Reports to the Internal Revenue Service -- These must be completed and

signed by a CPA.

2. Please follow this schedule:

Total Revenue Minimum Level of Financial Reporting

$1 - $ 50,000 Year end financial reports (income statement of

cash flows) prepared by an accountant or

compilations by a Certified Public Accountant*

$50,000 - $200,000 Compilation or review prepared by a Certified

Public Accountant

$200,000 - and up Review or audit prepared by a Certified Public

Accountant

Note #1: Any accountant can prepare financial statements. Compilations, reviews and audits are definitions of standards set by the CPA profession, and thus require the completion by a CPA. For chapters $50,000 or less, the accountant need not be a CPA.

Note #2: To insure the September 30 financial reporting compliance, you should have your financial data to your CPA no later than August 1st !

Other Forms

Annual Paid Staff Listing and Annual Board Member Roster are self-explanatory.

Please note that they must be in to the Regional Service Center by August 30, 2005. Names that you list on these forms should be for the 2005-2006 fiscal year.

The Annual Ministry Impact Census Report includes definitions (see tab #5 for definitions) and should be self-explanatory. Questions about this form should be directed to your Regional Service Center. Please note that two copies of this report must be sent to your Regional Service Center by August 30, 2005.

Annual Participation Fee Report - If you have questions, please contact your Regional Service Center. The Annual Participation Fee Report is due in the Regional Service Center on September 30, 2005 along with the other financial information. Remember, if you owe a balance on 3.5 %, a check MUST accompany this form in order for your report to be processed. Most of the calculations on this report will be done automatically. Start with the first tab “Supplement C”.

If reports are received after the due date, Charter Status will be affected.

Annual Chapter Report

General Information

• “Chapter Legal Name” – The name that appears on your Annual Chapter Report must be your program’s legal name. It must coincide with your IRS forms, state incorporation, unemployment, stationery, donor receipts, etc.

• “Employer Identification Number” – must coincide with the number that you are using on your 990 form. If your chapter is new and you have not applied for this number, you should obtain Form SS-4 from IRS to do so.

• “Incorporation”; “Regulations”; “Self-Evaluation”; “Board of Directors”; and “Financial Status” are self-explanatory.

• “Financial” – Please include your June 30, 2005 independent CPA reviewed or audited financial statements with the Annual Chapter Report.

• “Signatures” – All board and staff members are to sign the Youth For Christ Statement of Faith and Vision/Mission Statement. A signed form for each Board and staff member should be kept on file in your office. A form incorporating the Statement of Faith and Vision/Mission Statement is attached. You may duplicate this for use by new Board and staff members. Do not return copies of these forms with your reports.

Internal Revenue Service Forms

General Information

Due in the Regional Office no later than September 30, 2005

DO NOT send any IRS forms directly to the IRS

• 990 For those organizations exempt from income tax

• Schedule A An informational supplement to Form 990

• Schedule B Required by IRS – if it does not apply, indicate with “N/A”

• 990T For unrelated business income

• 990EZ Short form return for organizations exempt from income tax (for chapters with gross receipts for the year of less than $100,000 and total assets at the end of year less than $250,000.)

990, Schedule A & Schedule B MUST be filled out by all local programs

• By ensuring that your 990 forms are completely filled out in accordance with IRS requirements, you protect your privilege of operating as a tax exempt organization. For this reason, YFC/USA recommends that these forms be filled out by the Certified Public Accountant who is doing your financial statement.

• It is a must that these forms be in on time. We find that report forms and financial data often arrive late in the Regional Service Centers due to local chapters not taking information to accountants early enough. They must be completed early and turned in to Regional Service Center no later than September 30, 2005. This deadline is a MUST for the chartering process of YFC/USA.

If your accountant is donating his or her services, it is ABSOLUTELY IMPERATIVE that you get the necessary information into his/her hands NO LATER THAN AUGUST 1, 2005. This should allow ample time for your reports to be prepared and returned to you in time to meet the deadline of September 30th.

• If your accountant is donating his or her services in completing the IRS forms, he/she need not sign the IRS forms under “Paid Preparer’s Signature”.

• Specific instructions for certain sections of the IRS forms are on the following pages.

• If you have any questions concerning the IRS forms, please contact the National Field Office at 303-843-6732.

Internal Revenue Service Forms

Specific Information

You may either use the IRS forms that are included in this packet or the ones sent to you directly by the IRS. In either case, certain information must be filled in as follows:

990

1. Item “A” above the address block, page 1 – We go by the fiscal year (not calendar year) beginning July 1, and ending June 30. Be sure to fill this in.

2. Item “J” under the address block, page 1. – We are exempt under Section 501 (c) (3). This box must be checked and the “3” inserted where indicated.

3. Item “H” under the address block, page 1.

Question a – “Is this a group return filed for affiliates? Answer is “No”

Question d – “Is this a separate return filed by an organization covered by a group ruling?” Answer is “Yes”

4. The GEN number that must be entered is 1277.

990-Schedule A & Schedule B

To repeat the “General Instructions,” ALL YFC Affiliates must file a Schedule A and a Schedule B as well as a 990

1. Mark non-applicable sections with “N/A” on both forms

2. Part IV, page 2 usually causes some confusion. YFC affiliates should check item #12 – “An organization that normally receives: (a) no more than 1/3 of its support from gross investment income and unrelated business taxable income . . .” Local YFC programs are not item #5 – “a church, convention of churches, or association of churches. . .”

3. Because you have checked item #12 in Part IV, you must fill out the support schedule, items #15 through 25, and 27.

4. For 990 Schedule B – First calculate how much 2% of your line 1d income on page 1 of the 990 amounts to. Then fill out the report for every contributor who during the year gave your chapter “directly or indirectly, money, securities, or any other type of property totaling” [an amount equal to or more than the figure you determined is 2% of your income]. Please see the Schedule B General Instructions for more detailed information. Be sure to check the box for “501” (c) and enter “3” in the parenthesis on page 1 of Schedule B.

Several YFC chapters were cited by the IRS last year for not filing a Schedule B form. If you do the 2% calculation and find that you did not have any contributors in that category, just write “N/A” in the form and attach it to your 990.

990-T

If you have had income from business unrelated to the actual ministry of YFC, you are required to file a 990-T. (Gross receipts less the cost of goods sold over $1000.) If you are not sure about what constitutes “unrelated business income,” contact your IRS office.

If the form is applicable to your situation, please be aware of the following:

1. Item “A” – fiscal year = July 1, 2004 ending June 30, 2005.

2. Item “B” under the address block should be filled out with 501(c)(3).” Check this box.

3. Item “F” should be filled out with our group exemption number, which is “1277”

4. Item “I” check box for “NO”

990EZ

If your gross receipts during the year are less than $100,000 and your total assets at end of year are less than $250,000, you may file Form 990EZ, Short Form Return of Organizations Exempt From Income Tax, instead of Form 990. Even if you meet this dual test, you can always file a Form 990. Be sure to fill in

1. Item “A” fiscal year = July 1, 2004 ending June 30, 2005.

2. Item “F” group exemption number is 1277.

3. Item “J” check box for “501” and insert the number 3 in the parenthesis.

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