To remain in compliance with IRS reporting requirements, theological schools and seminaries must know exactly what is required of them by law. This can sometimes prove difficult, as tax laws can yield ambiguous answers to common questions trustees have.

In order to provide answers to some of these questions, In Trust interviewed the former director of the IRS Exempt Organizations Division, Marcus Owens. This 2011 article addressed IRS Form 990 and exemption filing requirements for seminaries.

Among the topics discussed during the interview, Owens addressed the question of whether seminaries are considered churches by the IRS and how that affects reporting requirements. According to Owens, seminaries that are affiliated with a church or denomination fall into a category called “integrated auxiliary,” meaning they conduct activities affiliated with a church or denomination. Schools that fall in this category are not required to fill out a Form 990; however, many of these institutions still choose to do so for the sake of financial transparency.  Furthermore, although they are not required to complete the Form 990, these schools do have other reporting requirements. As such, trustees should be well versed in what is expected of their specific institution.

Of course, not all theological schools or seminaries are associated with denominations. These institutions have a different set of reporting requirements. Fortunately, Owens provides a number of insights into regulatory and legal compliance issues that cover all types of institutions. He suggests taking a look at the governance section of the Form 990 for some basic guidelines for nonprofit best practices.

Reporting requirements can be tricky to navigate. What are some tips, issues, or questions you have about the reporting process?

Read the whole interview with Marcus Owens on Form 990 and other required reporting. 

Click here to see the entire series of 990 forms and instructions. Go to page 18 at this link to read the instructions on the "Governance, Management, and Disclosure" section of Form 990, which is especially relevant for board members.