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Meeting Your Obligations as a Tax-Exempt Organization: Filing the Form 990

Nonprofit organizations that are exempt from tax under Section 501(c)(3) are required to file a Form 990 with the IRS each year.  Only certain religious organizations are exempt from this requirement.

Private foundations file the Form 990-PF.  Depending on the size of the organization, public charities must file one of three versions of the Form 990:  the Form 990, the Form 990-EZ or the Form 990-N.  The following chart illustrates which of the three versions of Form 990, your organization must file:

Organization's annual gross receipts normally less than or equal to $50,000: 990-N

Organization's annual gross receipts more than $50,000 but less than $200,000, and total assets less than $500,000: 990-EZ

Organization's annual gross receipts equal to or greater than $200,000 or total assets equal to or greater than $500,000: 990

An organization which meets the threshold requirements for filing a Form 990-N can file a Form 990 or 990-EZ and an organization that would normally file a Form 990-EZ can elect to file a Form 990.  An organization which has applied for exempt status, but has not yet received a determination letter from the IRS, must also file a version of the Form 990, based on its gross receipts.

The form is due 4 ½ months after the close of your organization's fiscal year.  This means that an organization whose fiscal year ends on December 31 must file the Form 990 by May 15. If your organization files a Form 990 or 990-EZ, your organization may request an extension of time to file.

However, you cannot request an extension of time to file the Form 990-N.  Therefore, if your organization files a Form 990-N and its fiscal year ends December 31, you must file your organization's form by May 15.

The Form 990-N is filed electronically via the IRS's website. It is a very simple form that asks eight questions:  the organization's name, address, trade-names, if any, taxpayer identification number, name and address of the principal officer, tax year, website address, if any, and an affirmation that your organization's gross receipts do not exceed $50,000.

If your organization does not file a version of the Form 990 for three consecutive years, the IRS will automatically revoke your organization's tax exempt status.  You will then have to reapply for exemption.

In addition, the IRS has the right to impose a penalty of $20 per day (up to a maximum of $10,000 or 5 percent of the organization's gross receipts, whichever is less) if an organization files a late return.  For organizations with gross receipts of more than $1 million, the penalties increase to $100 per day and $50,000.

Therefore, it is important that your organization file its form in a timely manner.