Federal Taxation Issues for Tax-exempt Non-profit Organizations
In general, exempt organizations must file annual tax returns (Form 990 Series) to the IRS, even though they do not pay federal taxes.
Form 990 is an annual information return required to be filed with the IRS by most organizations exempt from income tax under section 501(a), and certain political organizations and nonexempt charitable trusts. There are exceptions to file annual returns (Form 990 Series), such as an integrated auxiliary of a church, or a school below college level affiliated with a church or operated by a religious order.
Which form an exempt organization must file generally depends on its financial activity, as indicated in the chart below.
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Status
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Form to File
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Gross receipts normally ≤ $50,000
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990-N
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Gross receipts < $200,000, and Total assets < $500,000
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990-EZ or 990
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Gross receipts ≥ $200,000, or Total assets ≥ $500,000
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990
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Private foundation - regardless of financial status
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990-PF
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An exempt organization must disclose the following information on Form 990 series:
- Describe its mission or other significant activities;
- Disclose financial details on its revenues, expenses, assets and liabilities;
- List officers, directors, trustees, and key employees, and compensation paid to certain persons;
- Report the organization’s exempt and other activities, finances, compliance with certain federal tax filings and requirements;
- Additional schedules are required to be completed depending on the activities and type of organization.
The due date to file Form 990 Series is the 15th day of the 5th month after the organization’s accounting period ends (May 15th for a calendar-year filer). You can electronically file Form 8868 to request a 6-month automatic extension of time, except for 990-N (postcard) filers.
If an organization does not file a required annual tax return or files late, the IRS may assess penalties. In addition, if an organization does not file as required for three consecutive years, it automatically loses its tax-exempt status. There is no extension request for Form 990-N filers, thus there is no penalty assessments for filing Form 990-N late. If your 990-N is late, the IRS will send a reminder notice to the last address received.
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