REMINDER: IRS Form 990 Deadline is November 15 (and some traps for the unwary)
Almost all tax-exempt organizations must file annual returns (IRS Form 990, Form 990-EZ, Form 990-N, or 990-PF, as applicable) with the IRS. An organization’s return is due on the 15th day of the 5th month after the end of the organization’s fiscal year. For example, if the organization has a fiscal year end of December 31, the return is due on May 15; and if the organization has a fiscal year end of June 30, the return is due on November 15. Organizations may apply for a three month extension by filing IRS Form 8868, Application for Extension of Time To File an Exempt Organization Return, before the due date. Click here for more details on the IRS Website about the various filing requirements for tax-exempt organizations. Click here for a chart of IRS exempt organization annual return due dates and extension dates. Click here if you want to sign up to receive the IRS’s Exempt Organization Updates.
Here are a few other annual filing reminders and traps for the unwary that we have gleaned through our experiences as legal counsel for nonprofit organizations.
Traps for the Unwary:
• If your organization fails to file its annual return for three consecutive years, your organization will automatically lose its federal tax-exempt status. This rule doesn’t just affect small start-ups that fail to file the e-Postcard (see the third bullet point below); it can affect organizations with more complex organizational structures, too!
• Even if your organization is not required to apply to the IRS for tax-exempt status (for example, if it is a “self-declared” 501(c)(4), 501(c)(5) or 501(c)(6) tax-exempt organization), your organization still has an obligation to meet these annual filing requirements.
• With very few exceptions, most small tax-exempt organizations with gross receipts that are normally $50,000 or less (the threshold was $25,000 for tax years ending on or after December 31, 2007 and before December 31, 2010) must file the IRS Form 990-N (e-Postcard). NOTE: Organizations may not request an extension to file the e-Postcard.
• If your organization is a newly formed entity and its IRS Form 1023 application is pending with the IRS, your organization still must meet the applicable filing requirements. We recommend you work with a tax professional or nonprofit lawyer to help enter your organization into the e-Postcard filing system.
• The first 3-month extension is granted automatically. If you need another extension, submit it in advance so that if it is not approved, you can still file a timely return.
• Even if you have obtained a filing extension, any tax due on an IRS Form 990-T is due on the original filing deadline, and the IRS imposes penalties and interest on the failure to timely pay the tax. This rule tends to nail newer leaders in the nonprofit sector.
• If sending returns to the IRS by mail, send them by U.S. Mail certified return receipt requested. Keep all copies and records of documents sent and your date-stamped proof of mailing.
• Remember, an incomplete return is treated the same as a late return. If your organization files a return with missing information or required schedules penalties could apply. Review your return before submitting, and if you have questions, contact a nonprofit lawyer or tax professional before submitting to the IRS.
• Don’t include personal information, such as social security numbers and bank account numbers, on returns. The IRS is required to publicly disclose information returns, attachments filed with the return, and correspondence with the IRS about the filing. Therefore, don’t include personal information in any of those filings.