Most not-for-profit organization (NPOs) must file one of three informational returns with the Internal Revenue Service (IRS) annually. Which form a NPO must file is based in its gross receipts and/or total assets. In most instances, the following guidelines will normally dictate which form a NPO should complete.
|Form 990||Form 990-EZ||Form 990-N|
|Forms||Return of Organization Exempt From Income Tax||Short Form Return of Organization Exempt From Income Tax||Electronic Notice (e-Postcard)|
– OR –
|greater than or equal to $200,000||less than $200,000 but typically more than $50,000||$50,000 or less|
|Total Assets||greater than or equal to $500,000||less than $500,000|
Certain NPOs are not required to file annual information returns with the IRS. These include churches; schools below college level affiliated with a church or operated by a religious order; and governmental instrumentalities such as public schools. Private foundations file Form 990-PF, Return of Private Foundation, and not Form 990, Form 990-EZ, or Form 990-N.
Form 990, Form 990-EZ, and Form 990-N are due annually by the 15th day of the fifth month after the close of the NPO’s tax year. So, the due date for a NPO with a June 30 year end is November 15, additionally November 15 is the extension deadline for NPOs with a December 31 year end. Generally, a six-month automatic extension is available to a NPO that is unable to meet the due date. NPOs that file at least 250 returns of any type with the IRS (W-2s, 1099s, 941s, etc.) during the calendar year within the NPO’s tax year and have $10 million or more in total assets at the end of the tax year must file their Form 990 electronically.
Penalties for failure to file a timely return range from $20 to $100 per day depending on the NPO’s gross receipts. The penalties are capped between 5% of the NPO’s gross receipts and $51,000 per return for the organization. In addition, penalties may apply to officers and directors who fail to file the return after receiving a notification from the IRS. If an organization fails to file its required forms for three consecutive years, the IRS automatically revokes the NPO’s exempt status. If you have any questions about filing requirements for Form 990, Form 990-EZ, or Form 990-N, please do not hesitate to contact us.