It’s that time of year again… time to start thinking about your organization’s tax return filing. Some may not be aware of this annual requirement, or what even goes into this form. We created an FAQ to give a better understanding of this essential filing requirement:
Why File Form 990?
For starters, nearly every type of 501(c)(3) organization is required to file some version of Form 990 to the IRS for each fiscal year (churches are the exception). Form 990 gives the IRS an overview of an organization’s activities throughout its last fiscal year. Filing this document also gives donors an understanding of how the organization is being managed and operated.
Which Version of Form 990 Should My Organization File?
There are several versions of Form 990: 990-N, 990-EZ, 990 long form, 990-PF (for private foundations), and 990-T (for organizations with unrelated business income). Filing Forms 990-N, EZ, and long form depend upon the organization’s gross revenue. Our sales and compliance team can help you determine which Form 990 is appropriate for your organization’s filing.
What Is Included in Form 990?
Forms 990 require significantly more information than a corporate tax return. The IRS made changes to the form in 2008, so there is now in-depth scrutiny in the areas of compliance, governance, structure, procedures, and the organization’s programs, in addition to detailed financial activity. GuideStar.org provides a database where individuals can see copies of an organization’s Form 990. It’s a great place to review the type of information included.
What Happens if I Don’t File?
If an organization fails to file the appropriate Form 990 for three consecutive fiscal years, the IRS will revoke the organization’s tax-exempt status. The ramifications of losing that status are significant. The organization would then have to re-apply for 501(c) status, which requires a form even more complex than the standard Form 1023 application.
If you haven’t already prepared the IRS Form 990 for your organization’s fiscal year, now is the time to do so. It is imperative for your organization to file on time. Organizations whose fiscal year ended on December 31st must file a completed return or a six-month extension by May 15th. Please contact our office to discuss your filing for this tax year. If you would prefer, click here to submit an inquiry about our Form 990 services.