IRS Form 990-T (2015): Exempt Org. Business Return

What Form 990-T (2015) Is For

An exempt organization uses Form 990-T for 2015 to report unrelated business income tax when income comes from a trade or business that is not substantially related to its exempt purposes. Most organizations must file when unrelated business taxable income from regularly carried activities reaches the filing threshold.

When You’d Use Form 990-T (2015)

Organizations use this form when they discover unrelated business income that was not reported, need to amend an older return, or determine that business activity produced taxable income. Late or amended filing helps maintain the organization’s exemption and ensures compliance with tax law requirements under the Internal Revenue Code Section governing UBIT.

Key Rules or Details for 2015

• Section 179D deduction: This deduction applied to certain real property improvements, and qualifying organizations could reduce UBIT tax liability through recognized energy-efficient expenditures reported for the fiscal year.
  
  
• Qualified specified payments: These payments from controlled entities remained excluded, and organizations needed to determine whether exceptions applied under chapter rules for unrelated business taxable income.
  
  
• American Samoa credit: This credit applied to activities conducted in that jurisdiction, and qualifying exempt organizations could claim it based on guidance issued for the relevant tax year.
  
  
• Health insurance credit: This credit offered a higher percentage for eligible employees and allowed organizations to offset income tax obligations associated with unrelated production or service activities.

Browse more tax form instructions and filing guides in our Forms Hub.

Step-by-Step (High Level)

Step 1: Gather transcripts and financial records

Collect IRS transcripts, receipts, account statements, advertising revenue details, rental records, and documentation for all business activity. These records help determine unrelated business income and support deductions that the Internal Revenue Service may review.

Step 2: Use the correct-year Form 990-T and schedules

Use the 2015 Form 990-T because tax-exempt organizations must follow the tax law in effect for that year. A correct-year form ensures proper treatment of income, credits, and requirements tied to the organization’s exemption.

Step 3: Attach all required schedules for 2015

Attach Schedule A, Schedule K, or any related schedule required for interest, dividends, research income, real property rentals, or corporation-controlled entities. These schedules provide the details needed to compute unrelated business taxable income accurately.

Step 4: Choose the correct filing method and address

Mail the completed form to the IRS processing center listed for exempt organizations in 2015. Filing by mail remained standard for most cases, and organizations should use an educational method, such as certified mail, to document timely submission.

Step 5: Keep copies and supporting documentation

Maintain copies of the form, schedules, and correspondence for a minimum of three years. These records support the organization if the Internal Revenue Service requests additional information about activities, deductions, or receipts related to unrelated business income.

Learn more about federal tax filing through our IRS Form Help Center.

Common Mistakes and How to Avoid Them

• Missing unrelated business activities: Some organizations overlook income from advertising, services, or certain rentals. Reviewing all activities helps identify unrelated business income and prevents errors that could affect the organization's exemption.
  
  
• Incorrect expense allocation: Some filers allocate expenses without a proper methodology in place. Using a reasonable allocation method ensures that deductions support the business activity and comply with the requirements of Internal Revenue Code Section.
  
  
• Ignoring the filing threshold: Some assume only profit creates liability. Filing is required once gross unrelated business income reaches the threshold, and understanding this rule prevents filing delays that could result in penalties.
  
  
• Overlooking proxy tax rules: Some exempt organizations overlook the fact that certain lobbying activities trigger proxy tax. Reviewing chapter guidance ensures that proxy tax requirements are recognized even when no unrelated business income tax applies.
  
  
• Using incorrect NOL rules: Some filers mistakenly apply later limitations. Reviewing the 2015 tax law ensures net operating losses receive correct treatment and avoids incorrect tax calculations that the IRS could question.

Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.

What Happens After You File

The Internal Revenue Service generally processes Form 990-T within several weeks, though amended or late filings may take longer. Notices may request missing information, clarify deductions, or review business activities that produced income. Filers unable to pay taxes immediately may request payment options while interest continues to accrue.

FAQs

Can I still file IRS Form 990-T 2015 if my exempt organization missed the deadline?

Yes, an exempt organization can file even when the form is late. Filing helps limit further interest and demonstrates compliance with Internal Revenue Service requirements for unrelated business income.

How does unrelated business income tax apply when an organization has multiple unrelated business income sources?

The IRS requires all unrelated business income sources to be reported. Most organizations must combine income and apply deductions before computing unrelated business taxable income for the year.

Does a tax-exempt organization with regularly carried activities always need to file, even without profit?

Filing depends on gross unrelated income, not profit. When an activity is regularly carried out and generates sufficient income, filing is required, even if deductions eliminate the profit.

How does unrelated business taxable income affect income tax obligations for Form 990?

Unrelated business taxable income generates a separate income tax liability, which is reported on Form 990-T. Form 990 itself does not compute UBIT, so the organization must use this form when business activity generates taxable income.

How does business income tax apply when an exempt purpose and business activity overlap?

Only income substantially related to an exempt purpose avoids taxation. When business activity does not further that purpose, the IRS treats the revenue as taxable under unrelated business income rules.

Does an S corporation investment create unrelated business income for an exempt organization?

Income from an S corporation is generally treated as unrelated business taxable income. The IRS requires the organization to report it because the entity is a pass-through and the income is recognized as business income taxable under UBIT.

What trade or business rules determine when regularly carried activities become taxable to an exempt organization?

The IRS evaluates whether the activity resembles a commercial business and is conducted on a regular basis. If the activity is unrelated to exempt purposes, the resulting income becomes subject to UBIT.

For more resources on filing or understanding prior-year IRS forms, visit our guide on Nonprofit & Exempt Organization Forms.