Filing Requirements for IRS Form 990 Annual Information Return

All nonprofits are required to file either a Form 990-N, 990-EZ, or 990 each year with the IRS.



Nonprofits don’t pay income taxes like for-profit businesses do, and they don’t file tax returns like businesses either. However, that doesn’t mean they don’t have IRS tax filings to deal with. Subject to some important exceptions, tax-exempt organizations are required to file an annual information return with the IRS. If, like most nonprofits, your organization uses the calendar year as its tax year, your return is due on May 15.

An information return is just what it sounds like: a tax form that gives the IRS detailed financial and other information about your nonprofit. It helps show the IRS how your nonprofit spends its money, operates, and whether it is in compliance with the tax laws that govern tax-exempt organizations. These IRS filings are important because if they aren’t done properly and on time, a nonprofit risks losing its tax-exempt status.

What Type of Return to File

There are three different types of nonprofit information returns:

As shown in the chart below, which form a nonprofit must use depends on its gross receipts and, in the case of larger nonprofits, the value of its assets. “Gross receipts” means a nonprofit’s total income for the tax year from all sources without subtracting any costs or expenses.

Annual Gross Receipts

Form to File

Gross receipts “normally” $50,000 or less

990-N

Gross receipts $50,001 to $199,999

Total assets less than $500,000

990-EZ

Gross receipts $200,000 or more

Total assets $500,000 or more

990

Form 990 must be used by larger nonprofits. It is by far the longest and most complex form, requiring the most disclosures. Form 990-EZ is a shorter form for medium-sized nonprofits. Form 990-N is for the smallest nonprofits—it is nothing more than an electronic postcard with the organization’s address and the name of the principal officer.

Churches and church-related organizations are not required to file annual returns. In addition, a nonprofit that is a subsidiary of another larger nonprofit is exempt from the IRS information filing requirement if the parent nonprofit files a consolidated return for its subordinate organizations, including the particular subsidiary nonprofit. For example, individual Boy Scout troops usually do not file their own information returns—they are covered by the Boy Scout parent organization’s filing on behalf of all its subsidiary organizations.

Obtaining an Extension to File

All nonprofits are allowed one automatic three-month extension of the time to file Form 990 or 990-EZ. Thus, you have as much as seven and one-half months to file either of these forms following the end your tax year. It is very common for nonprofits to obtain the automatic extension. To do so, you must file IRS Form 8868, Application for Extension of Time to File an Exempt Organization Return. The IRS will send you a notice that your request is granted. Do not attach Form 8868 to your return when you file it because it will delay IRS processing of your return.

You can get an additional three month extension by filing a second Form 8868, but this extension is not automatic—it is granted only at the IRS’s discretion. Your nonprofit must set forth a good reason for the additional extension in the Form 8868—for example, its financial records were lost or destroyed.

There is no extension of time available for filing Form 990-N.

What Happens If You Don’t File

It’s important for your nonprofit to file its information returns. If it fails to do so for three consecutive years, its federal tax exemption will be automatically revoked as of the due date of the third required filing. If your nonprofit loses its tax-exempt status, you will have to apply all over again to get it back by filing IRS Form 1023. There is a hefty fee to file this form. Not to mention all the hassle of redoing the form. Reinstatement of tax-exempt status may be retroactive if you can show that you had a good reason for not filing.

If you fail to file Form 990 or 990-EZ, or file an incomplete or false return, the IRS can impose monetary penalties against both your nonprofit and those responsible. There is no monetary penalty for failure to file Form 990-N.

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