Almost all nonprofits have an obligation to file an annual return with the IRS - even those that are so small that they are not required to apply to the IRS for recognition as tax-exempt (such as those that normally do not have more than $5,000 in annual gross receipts), as well as organizations exempt under other Code Sections, such as 501(c)(4). (Of course, there are some exceptions.) Annual IRS returns are known as the "990 series" because there are several forms that use the number 990, including Form 990, Form 990-EZ, Form 990-N, Form 990-PF, for private foundations, and 990-T, used to report unrelated business income. Which form applies to your nonprofit?
Guidance for small nonprofits (with annual gross receipts under $50,000): Your nonprofit must file Form 990-N, Electronic Notice (known as the "e-Postcard") for Tax-Exempt Organizations not Required To File Form 990 or 990-EZ.
Practice Pointer: Should the board review the annual report to the IRS? The redesigned Form 990 asks in Section B, line 11: “Has the organization provided a copy of its Form 990 to all members of its governing body prior to filing the form?” The Form goes on to ask the organization to “describe the process used by the organization to review” the Form 990." As a result, many nonprofits choose to adopt a basic financial policy that requires full board review of the Form 990 before filing with the IRS. Read about other Form 990 good governance practices.
When is the deadline? The deadline for filing the Form 990 with the IRS depends on the fiscal year of the nonprofit. The forms are due no later than 5 ½ months after the end of the nonprofit’s fiscal year. What happens if your nonprofit misses the deadline to file? There are penalties for failure to file a timely and/or inaccurate return that range from monetary penalties, to automatic loss of tax-exempt status if an organization fails to file annual returns for three consecutive years. (Automatic revocation applies even to those organizations that normally have less than $25,000 in annual gross receipts.) Note: While penalties for failing to file the 990 and 990-EZ can be steep, there is no financial penalty for late filing of the 990-N. However, remember that failing to file for three consecutive years will result in automatic revocation of tax-exempt status.
Loss of tax-exempt status: Organizations that lose their tax exempt status are no longer eligible to receive tax-deductible contributions, and may be required to pay corporate income tax. Read guidance about losing tax-exempt status and what to do if your nonprofit’s status has been revoked.
Learn all about how to apply for reinstatement on IRS.gov.
Is your nonprofit listed as revoked? IRS automatic revocation list is updated regularly by the IRS. Check the list. If your organization is listed, or if your nonprofit has received a letter from the IRS informing it that its tax-exempt status is revoked, read the Council of Nonprofits' special webpage on automatic revocation and download a tip sheet on what to do if your organization's tax-exempt status is revoked. Learn all about automatic revocation of exemption and how to apply for reinstatement on IRS.gov.
If you believe that your nonprofit’s tax-exempt status was automatically revoked in error, the IRS encourages you to contact its Customer Account Services (toll-free): (877) 829-5500. NOTE: Before calling the IRS, be sure to obtain copies of all documentation that you have showing a real mistake was made (such as copies of correspondence from the IRS or you proving that you had submitted a 990 in the last three years).
All about automatic revocation of tax exempt status.
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