End of Year Reporting (IRS Form 990)

A little less than a month from now (December 31) marks the end of most organizations’ fiscal year. Have you been preparing for your IRS annual reporting requirement?  Do you at least know where your records are?  Or who has them? (If the answers to the last two questions have you concerned, you might want to see our new Vital Document Archive product.)

Most 501(c)(3) organizations must file an annual information return called Form 990.  Small 501(c)(3) organizations will file a Form 990EZ. Really small organizations with gross revenue normally less than $25,000 may only have to file an electronic information “postcard” return called the Form 990-N.  This form will require the organization’s name, any name it operates under, mailing address, web site, EIN, name and address of a principal officer, organization’s annual tax period, verification that the organization’s annual gross receipts are still normally $25,000 or less, and notification if the organization has terminated.  Large 501(c)(3)s typically file Form 990.

The goods news is that the gross revenue threshold for having to file a full-blown Form 990 (instead of 990EZ) has been significantly raised (see chart below).  Not that a 990EZ is a piece of cake…but, it is nothing compared to the 990 long form.

2008 Tax Year

(Filed in 2009 or 2010)

Form to File

Gross receipts normally < $25,000

990-N

Gross receipts > $25,000 and < $ 1 million, and Total assets < $2.5 million

990-EZ

or 990

Gross receipts > $1 million, and/or

Total assets > $2.5 million

990

All 990s due by the 15th day of the fifth month after the close of the tax year (May 15 if your accounting year ends December 31).

This filing requirement doesn’t apply to churches or private foundations. Churches are not required to file an annual information return and private foundations have their own form to file, called Form 990-PF, regardless of the amount of gross receipts.

Any organization that fails to meet its annual reporting requirement for three consecutive years will automatically lose its tax-exempt status. To regain its exempt status an organization will have to reapply for recognition as a tax-exempt organization.  Needless to say, if your 501(c)(3) is required to file, don’t forget to do it.  If you did forget, file it late.  The penalties will be painful, but not as painful losing you tax exempt status.

One more important note…Maybe your organization has been operating for a while, but has not yet applied for 501(c)(3) status.  Or maybe you have applied, but not yet been approved by the IRS.  In either case, if your organization’s tax year is ending, you still owe the IRS a Form 990.  Don’t be caught unaware!

Form 990 and 990EZ can be downloaded from the IRS website, though we recommend using the services of an accountant or tax preparer familiar with 501(c)(3) requirements.

UPDATE

After a hiatus of four years, Foundation Group is once again offering Form 990 preparation services.  The IRS has radically changed the form, making it many times more complex than what it once was.  Due to the circumstances, and the constant client demand, we determined to reenter the Form 990 field.  Who better to offer the service than the 501(c)(3) experts you already know and trust?!

Greg McRay is the founder and CEO of The Foundation Group. He is registered with the IRS as an Enrolled Agent and specializes in 501(c)(3) and other tax exemption issues.

This Post Has One Comment

  1. Yvonne Simpson

    thank you for this invaluable information. I will make good use of it

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