What the Form Is For

Form 990-BL is the annual tax filing used by black lung benefit trusts—specialized funds created by coal mine operators to provide medical benefits and compensation to miners suffering from black lung disease (also called pneumoconiosis). These trusts are tax-exempt under section 501(c)(21) of the Internal Revenue Code and were established following the Black Lung Benefits Revenue Act of 1977.

The form serves two main purposes: first, it acts as an information return reporting the trust's financial activities, revenues, expenses, and assets to the IRS; second, when necessary, it reports excise taxes through an attached Schedule A. These excise taxes apply when the trust or related parties engage in prohibited transactions—specifically "self-dealing" (improper financial dealings between the trust and disqualified persons) or "taxable expenditures" (spending money on purposes other than approved benefits).

Not every black lung benefit trust must file. If the trust normally receives $50,000 or less in gross receipts each year, it's exempt from filing Form 990-BL but must file an annual electronic notice (Form 990-N) instead. The form is filed by the trustee on behalf of the trust and is generally available for public inspection, except for sensitive sections like Part IV (contributor information) and Schedule A (tax calculations).

When You’d Use This Form (Regular, Late, and Amended Filings)

Regular filing

Form 990-BL must be filed annually by the 15th day of the 5th month after the trust's tax year ends. For calendar-year trusts (most common), this means a May 15 deadline. For example, a trust following the 2013 calendar year would file by May 15, 2014. If the deadline falls on a weekend or holiday, file on the next business day.

Extensions

If you need more time, file Form 8868 (Application for Extension of Time To File an Exempt Organization Return) to request an automatic six-month extension. This moves the deadline to November 15 for calendar-year trusts. However, an extension to file is not an extension to pay—any excise taxes owed under sections 4951 or 4952 must still be paid by the original May 15 deadline to avoid interest and penalties.

Amended returns

If you discover errors after filing—such as unreported self-dealing transactions, incorrect financial figures, or missing schedules—you should file an amended Form 990-BL. Write "AMENDED RETURN" at the top of the form and complete it in full with corrected information. Explain the changes in an attached statement. This is particularly important if you initially failed to report taxable events that trigger excise taxes.

Late filing penalties

Filing after the deadline (without an approved extension) triggers penalties of $20 per day ($100 per day for "large organizations" with gross receipts over $1 million), up to a maximum of $10,000 ($50,000 for large organizations) or 5% of gross receipts, whichever is less. Additional penalties apply if the IRS makes a written demand for the return and you still don't file.

Key Rules and Requirements for 2013

Several important rules governed Form 990-BL filing in 2013:

Who must file

The trust's authorized trustee must sign and file the form. If the trust is liable for excise taxes under sections 4951 (self-dealing) or 4952 (taxable expenditures), it must attach Schedule A. Additionally, individual trustees or disqualified persons who are personally liable for these taxes must file their own Form 990-BL with a completed Schedule A, entering their own name and identification number.

Approved trust activities

Black lung benefit trusts can only engage in specific activities and investments. Permitted uses include: (1) paying black lung benefit claims; (2) covering administrative expenses; (3) purchasing insurance for black lung liabilities; (4) providing certain health benefits to retired miners and their families; (5) investing in U.S. public debt securities, state/local government obligations, or bank deposits; (6) transferring funds to the Federal Black Lung Disability Trust Fund; and (7) returning excess contributions to the mine operator.

Self-dealing prohibitions (Section 4951)

The trust cannot engage in financial transactions with "disqualified persons"—including the contributing coal mine operator, trustees, officers, directors, major contributors (over 10% ownership), and their family members. Prohibited acts include selling or leasing property, lending money, providing goods or services, or transferring trust assets to these parties. Violations trigger a 10% excise tax on the "amount involved" for each year of the "taxable period," paid by the disqualified person, plus a 2.5% tax on any trustee who knowingly participated.

Taxable expenditures (Section 4952)

Spending trust money on anything other than the seven approved purposes listed above is a "taxable expenditure." This triggers a 10% excise tax on the expenditure amount, paid by the trust itself, plus a 2.5% tax on trustees who knowingly agreed to the expenditure.

Public inspection requirements

The completed return (except Part IV and Schedule A) must be made available for public inspection for three years after the filing deadline. Anyone can request copies, and the trust must provide them within 30 days of a written request or the same business day for in-person requests (unless unusual circumstances exist). The trust may charge a reasonable photocopying fee.

Step-by-Step Filing Process (High Level)

Step 1: Gather financial records

Collect all documentation of contributions received from the coal mine operator, investment income from approved securities and bank deposits, payments made for black lung benefits, insurance premiums, administrative expenses, trustee compensation, and year-end balance sheet information (cash, investments, liabilities).

Step 2: Complete the identification area

Enter the trust's name, address, employer identification number (EIN), and tax year. Check the "Trust" box under "Return filed by." If the address changed or exemption application is pending, check the appropriate boxes. Enter the fair market value of trust assets at the beginning of the operator's tax year.

Step 3: Fill out Part I (Revenue and Expenses)

Report all contributions, investment income, and other revenue on lines 1-3. Enter all expenses including Federal Black Lung Disability Trust Fund contributions, insurance premiums, benefit payments, trustee compensation, salaries, and administrative costs on lines 4-10. Calculate total expenses and excess of revenue over expenses.

Step 4: Complete Part II (Balance Sheets)

Enter beginning and end-of-year amounts for all assets (cash, savings accounts, investments in approved securities, office supplies, equipment) and liabilities (approved claims due but unpaid, accrued fees). Assets minus liabilities equals net assets.

Step 5: Answer Part III questions

Respond "Yes" or "No" to questions about changes to governing documents, self-dealing activities, taxable expenditures, and corrective actions. List all officers, directors, trustees, and their compensation in line 26. These answers determine whether Schedule A is required.

Step 6: Complete Part IV (Contributors)

List names and addresses of anyone who contributed $5,000 or more during the year (counting only individual contributions of $1,000 or more). Answer whether excess contributions were received.

Step 7: If taxes are due, complete Schedule A

If you answered "Yes" to self-dealing or taxable expenditure questions (and no exceptions apply), attach Schedule A. Section A reports self-dealing acts (dates, descriptions, parties involved, amounts). Section B reports taxable expenditures. Calculate initial taxes in Part II—these must be paid in full with the return.

Step 8: Sign and submit

The trustee must sign under penalty of perjury. If a paid preparer completed the return, they must also sign and provide their PTIN (preparer tax identification number). Mail the return to: Internal Revenue Service, 201 W. River Center Blvd., Stop 31, TE/GE, Covington, KY 41011. If taxes are owed, include payment made to "United States Treasury."

Common Mistakes and How to Avoid Them

Mistake #1: Missing the filing threshold

Some trusts incorrectly assume they're exempt from filing because they're small, but the $50,000 gross receipts threshold is based on what the trust "normally" receives over a multi-year period, not just one year. Solution: Calculate average gross receipts over the current and prior two years to determine filing requirements, and remember that even small trusts must file Form 990-N.

Mistake #2: Failing to recognize self-dealing

Trustees often don't realize that having the trust's bank account at a bank where a trustee works, or paying "reasonable" compensation to a disqualified person, can still constitute self-dealing. Solution: Review the complete list of disqualified persons (including family members and related corporations) and the special exceptions carefully. When in doubt, consult the instructions or a tax professional before engaging in transactions.

Mistake #3: Incomplete Schedule A reporting

When self-dealing or taxable expenditures occur, filers sometimes report only the trust's tax liability and forget that individual trustees and disqualified persons must file separate returns with Schedule A to report their personal tax liability. Solution: Notify all potentially liable parties of their filing obligation, and ensure each person files their own Form 990-BL with Schedule A by the deadline.

Mistake #4: Including unapproved investments on the balance sheet

Listing assets that aren't permitted investments (such as corporate stocks, mutual funds, or real estate) signals a potential taxable expenditure violation. Solution: Limit investments to the three approved categories: U.S. public debt securities, qualifying state/local government obligations, and bank/credit union deposits.

Mistake #5: Not attaching required schedules

Failing to attach explanations for "Other income" (line 2d), "Other expenses" (line 10), administrative expenses (line 9), or changes to governing documents results in an incomplete return subject to penalties. Solution: Review every line that says "attach schedule" and prepare detailed supporting documentation.

Mistake #6: Claiming the wrong taxable period

For self-dealing, the taxable period can span multiple years from the act's occurrence until correction or tax assessment, meaning one act can generate taxes for several years. Solution: Carefully determine the taxable period for each violation and pay taxes for all applicable years, not just the current filing year.

What Happens After You File

Once the IRS receives your Form 990-BL, it enters the public record (except for the protected sections). The agency processes the return and may:

• Issue a notice of acceptance—Most returns are accepted as filed without further contact. The IRS typically processes returns within several months. You won't receive formal confirmation unless there's an issue.
• Request additional information—If the return is incomplete, contains errors, or raises questions, the IRS may send a letter requesting clarification, missing schedules, or supporting documentation. Respond promptly with the requested materials to avoid penalties.
• Audit or examine the return—The IRS may select the return for examination, particularly if it reports excise taxes, shows unusual transactions, or is part of a broader compliance initiative. During an exam, the IRS will review books, records, and supporting documentation and may interview trustees.
• Assess additional taxes—If the IRS determines that unreported self-dealing or taxable expenditures occurred, or that reported taxes were calculated incorrectly, it will issue a notice of deficiency proposing additional taxes, interest, and penalties. You have the right to contest this determination.
• Impose penalties for violations—Beyond late-filing penalties, the IRS can assess penalties for substantial understatement of tax, negligence, fraud, or willful failure to file. Violations of public inspection requirements carry separate $20-per-day penalties.
• Monitor for correction—For reported taxable events, the IRS expects violations to be corrected. Failure to correct self-dealing or taxable expenditures within the taxable period can trigger additional "second-tier" taxes (though these are reported on a different form if they apply in subsequent years).

The trust must retain copies of the filed return and make them available for public inspection for three years. Keep supporting financial records for as long as they may be material to tax administration (generally at least four years).

FAQs

Q1: What exactly is a "disqualified person," and how do I identify them?

A disqualified person includes: the coal mine operator who contributed to the trust; any trustee; anyone owning more than 10% of a contributing corporation, partnership, or other entity; officers, directors, and employees of contributors; spouses, ancestors, and lineal descendants (children, grandchildren) of the above individuals; and any corporation, partnership, or trust where these individuals collectively own more than 35%. Family relationships and indirect ownership are counted. Review the instructions' detailed definitions and construct a list of disqualified persons for your trust.

Q2: Our trust paid reasonable compensation to a trustee for administrative work. Is this self-dealing?

Generally, yes—paying compensation to a trustee or disqualified person is self-dealing. However, there's a critical exception: if the compensation is for personal services that are reasonable and necessary to carry out the trust's exempt purpose, and the amount is not excessive, it's not treated as self-dealing. Document that the services were necessary, the compensation was reasonable (comparable to market rates), and the person qualified for the exception. When uncertain, consult a tax professional.

Q3: We discovered a self-dealing transaction from 2013 that wasn't reported. What should we do?

File an amended Form 990-BL for 2013 clearly marked "AMENDED RETURN," checking "Yes" to the relevant self-dealing question and attaching Schedule A with complete details. The disqualified person and any knowingly participating trustees must also file their own amended returns with Schedule A. Pay all taxes, interest, and penalties owed. Additionally, "correct" the transaction by undoing it to the extent possible and restoring the trust to the position it would have been in under the highest fiduciary standards. Document all corrective actions.

Q4: Can we invest trust funds in a mutual fund that holds government bonds?

No. The law specifies that trusts may only invest in: (1) public debt securities of the United States; (2) obligations of state or local governments not in default; and (3) time and demand deposits in banks or insured credit unions. Mutual funds, even those holding government securities, are not on this list. Purchasing mutual fund shares would constitute a taxable expenditure subject to excise tax.

Q5: What's the difference between the Section 4951 tax on self-dealing and the Section 4952 tax on taxable expenditures?

Section 4951 taxes improper transactions between the trust and disqualified persons (self-dealing)—the tax is 10% of the transaction amount paid by the disqualified person, plus 2.5% paid by any trustee who knowingly participated. Section 4952 taxes spending on unauthorized purposes (taxable expenditures)—the tax is 10% of the expenditure paid by the trust itself, plus 2.5% paid by trustees who knowingly agreed to the spending. Self-dealing involves who you transact with; taxable expenditures involve what you spend money on.

Q6: Is the return really available for anyone to see?

Yes. Form 990-BL is a publicly disclosable document under section 6104(b). Anyone can request to inspect it at the trust's office during regular business hours, request copies (which must be provided within 30 days), or obtain copies from the IRS using Form 4506-A. However, Part IV (listing contributors) and Schedule A (excise tax calculations) are NOT public. Also, the return filed by individual trustees or disqualified persons to report their personal tax liability is not publicly disclosed.

Q7: How do we calculate whether our trust "normally" has $50,000 or less in gross receipts to determine if we're exempt from filing?

The IRS uses a multi-year averaging test. For your first year of existence, use that year's receipts. For your second year, average the current and immediately preceding year. For your third and subsequent years, average the current year and the two immediately preceding years. If the average is $50,000 or less, you're exempt from filing Form 990-BL but must file the simpler Form 990-N (e-Postcard) instead. If the average exceeds $50,000, you must file Form 990-BL.

Note: This summary is based on the 2013 version of Form 990-BL and its instructions. Tax laws and forms change over time. For the most current information, visit www.irs.gov/form990bl or consult a qualified tax professional familiar with black lung benefit trust taxation.

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