A Brighter Way
A Brighter Way
The IRS is getting tough on not-for-profit groups this year. The agency recently issued a reminder that all nonprofit organizations that have not filed a Form 990-N or other form in the past three years will have their tax-exempt status automatically revoked this year.
The automatic revocation results from the Pension Protection Act of 2006, which became effective at the beginning of 2007. The IRS plans to publish a list of all revoked organizations on its website. If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and the renewed exemption may be taxable.
Tax-exempt organizations with annual receipts above $25,000 are required to file the Form 990 or Form 990-EZ annually, while private foundations file Form 990-PF. Smaller not-for-profit organizations with annual receipts of $25,000 or less can file an electronic notice, Form 990-N, which is an e-postcard. Churches and integrated auxiliaries of churches are the only nonprofit groups that are not required to file the Form 990.
The IRS made significant changes to the Form 990 and Form 990-EZ for the 2008 tax year, so organizations will need additional time to complete and verify the information. Larger organizations that complete the Form 990 must provide information about policies and procedures that demonstrate good governance.
The Form 990-series returns and e-postcards are due by the 15th day of the fifth month after an organization’s tax year ends.
Rea & Associates’ not-for-profit professionals are experienced in completing the revised Form 990 and can assist your organization in this process. Contact your Rea advisor for additional information.
This article was originally published in Illuminations: Facts & Figures from people with a brighter way, a Rea & Associates enewsletter, 3/15/2010.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.
