ExpressTaxExempt Blog

How To: Filing An Annual Tax Exempt Return For a New Organization

Are you new to the wonderful world of nonprofit/tax exempt organizations? Express990.com would like to be the first to welcome you and get you ready for e-filing your organizations IRS Form 990.

Let's take a look at the process...

Once you receive a confirmation from the IRS that they have you filed as a tax-exempt organization, you may begin gathering the information you need to file. You need to determine which 990 form to file by knowing your total gross receipts for the tax period...
  • Form 990-N - $50,000 or less a year in gross receipts
  • Form 990-EZ - $200,000 or less a year, or total assets of less than $500,000
  • Form 990 - $200,000 or more a year, or total assets greater than or equal to $500,000
Next, after you determine which 990 form to file and have all the needed information to enter, it's time to get started.

Express990.com has designed our filing experience to feel more like a conversation than a tax form. Simply go to the homepage and select "New User". From there, you will enter in your email address, create a password, set up a username, and provide a phone number.

After creating your account, you will be redirected to your "Dashboard" page, where you will immediately be able to start creating your return. From there just follow the directions and transmit to the IRS, it really is that easy. Once your return has been accepted, you will receive a confirmation email form us. Should your return be rejected, you will also receive an email containing details as to why it was rejected. You can quickly correct the information and re-submit the form to the IRS at no cost.

If you have any questions about e-filing Form 990 for your new organization, please do not hesitate to give us a call. You can contact our US-based Express990 Support Team via phone: 704.839.2321 or email: support@expresstaxexempt.com 

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When is the 990 e-Postcard due?

Express990.com provides Form 990-N, which is an annual IRS e-filing requirement for small exempt organizations and charities that typically gross in receipts of $50,000 or less in a year. It is an electronic notice that the IRS can can quickly use to update their database of basic information on all active nonprofits. There is not one set deadline to file the 990-N, instead the deadline is dependent on your tax period.

A Little 990-N Back Story:
Nowadays most small nonprofits must file an "e-postcard": IRS From 990-N. Prior to 2007, nonprofits with annual gross receipts under $25,000 did not have to make any yearly filings with the IRS. But in 2008, the IRS introduced a new form just for small nonprofits: Form 990-N ( called the Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required To File From 990 or 990-EZ).

Congress passed this tax filing requirement in response to concerns that smaller nonprofits were not keeping the IRS up to date on new business addresses and changes to other key information. In fact, the IRS suspects that thousands of small nonprofits have closed their doors without notifying the agency. The new 990-N should allow the IRS to maintain an up-to-date database of basic information on all active nonprofits. This will help the IRS meet its administrative goals, but it will also come in handy for donors who want to make sure they are giving money to the recognized nonprofits.

Exempt Organization Return Due Dates - Tax Year 2013

The IRS explains, "return due dates are always on the 15th of the month. However, when the 15th of the month falls on a weekend or holiday, IRS accepts returns as timely filed if received by the next business day. This applies to extended due dates as well as original due dates". 

Your 990-N due date is dependent on your tax period. If your tax period beginning and ending dates are the same as the calendar year then your due date is May 15th. If your tax period beginning and ending dates are not the same as the calendar year, then your due date will be different. The IRS has published a schedule of the 990 filing deadline according to your tax period. The 990 filing schedule shows when your e-Postcard is due, as well as, the new deadline if you file for an extension.

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IRS Form 990: Frequently Asked Questions

When e-filing the IRS Form 990, you might have some questions? Here are 8 FAQs that should help you out when e-filing your tax-exempt return through Express990.com:

1) What information is needed to file Form 990-N?
To file Form 990 you will need your Employer Identification Number (EIN), also known as the Tax ID Number (TIN). You will need the correct Tax Year, Legal Name and Address, different names the Organization uses, principal officer details, website (if you have one), confirmation of gross receipts of $50,000 or less, and a statement that the organization is going out of business (if applicable).

2) What is the due date for Form 990-N?
The deadline for filing Form 990 is the 15th day of the 5th month after the end of the organization's fiscal year. If the organization is liquidated, dissolved, or terminated, file the return by the 15th day of the 5th month after liquidation, dissolution, or termination.

3) Who is eligible to file Form 990-N?
You may only file an e-Postcard if you are a tax-exempt organization that totals $50,000 or less a year in gross receipts.

4) Are there any penalties for not filing Form 990-N?
There is no penalty if you decide not to use the e-Postcard option, filing late or not filing at all. But an organization that fails to either send an e-Postcard or file Forms 990 or 990-EZ manually, the IRS will revoke all privileges and the organization will automatically lose tax exempt-status.

5) Is there an extension for Form 990-N?
Yes, there sure is! Use Form 8868, Application for Extension of Time to File an Exempt Organization Return, to request an automatic 3-month extension if the original 3 months was not enough time. To obtain this additional extension of time to file, the organization must show reasonable cause for the additional time requested. For a quick and easy way to e-file Form 8868, visit our sister product, ExpressExtension.com

6) Who are principal officers?
The current president, vice president, treasurer, assistant treasurer, chief accounting officer, or other corporate officer (such as the tax officer) qualify as principal officers.

7) Does my organization have to file the e-Postcard if it is a subordinate organization in a group exemption?
If the parent organization added the subordinate organization to the parent's group filing, you are not required to file an e-Postcard. If your parent organization failed to file and your annual gross is $50,000 or less you are still required to file an e-Postcard. You must get in contact with your parent organization to verify your standing in regards to the list of subordinate organizations for the IRS> Otherwise, your parent organization will have to contact the IRS and mail a request in writing for the information to be updated to:

Internal Revenue Service
1973 North Rulon White Blvd
Ogden, UT 84404-5402
ATTN: M/S 6273

8) Can I go to the IRS office to file?
Unfortunately no, the e-Postcard can only be filed online.

If you have any further questions about e-filing your Form 990, please don't hesitate to call the Express990 support team, located in Rock Hill SC via phone: 704.839.2321 email: support@expresstaxexempt.com

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How To Reinstate Tax-Exempt Status

Greg McRay, CEO The Foundation Group, has shared the process to regaining your Tax Exempt status after it has been revoked.

Greg explains:
The Internal Revenue Service has issued new guidance (in the form of Revenue Procedure 2014-11) for small nonprofits looking to regain lost tax-exemption. The process outlined in the Rev.Proc. significantly changes the reinstatement process...mostly for the better.

Under the old procedure, nonprofits that had their 501(c)(3) status revoked due to failure to file Form 990 for three consecutive years had a difficult time establishing sufficient reasonable cause, i.e., a good reason why they missed filing their Form 990 three years in a row. Reasonable cause was necessary to have their reinstatement be retroactive to when they lost their status. If they could somehow manage to establish reasonable cause, they also had to prepare and file Form 990-EZs for each of the years missed, even if one or two of those years only required Form 990-N originally. This proved to be a very time-consuming and expensive process.

Nonprofits could choose to forgo retroactivity, but had to settle for a new 501(c)(3) effective date that matched the postmark date of the reinstatement application. The big problem with that scenario was the creation of a taxable "gap" period between the date the nonprofit first lost its tax exemption and when it got it restored.
  • For Example: If a nonprofit lost its 501(c)(3) status effective May 15, 2012 and could not establish reasonable cause for retroactive reinstatement, and filed a new 501(c)(3) application on July 15, 2013, they would have a taxable gap of 14 months
Now, small nonprofits, defined as those whose From 990 requirement was either Form 990-N or Form 990-EZ, can apply for retroactive reinstatement by filing a new Form 1023, along with Form 990-EZs for those years in which it was required, but missed. If any or all of the missed years required From 990-N, they do not have to be filed arrears. Reasonable cause will now be assumed and not required to be articulated in writing. In addition, late filing penalties for the prior year From 990-EZs will be abated. This is no small change to the process and one that should benefit thousands of small organizations dealing with lost exemptions.

Please Note: This Revenue Procedure does not change the requirements for larger nonprofits seeking reinstatement of tax-exemption. They will still be required to provide definitive reasonable cause and will not have late filing penalties waived. 

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What Can Cause Your Tax-Exempt Status To Be Revoked?

Answer: IRS regulations prohibit 501(c)(3) public charities from engaging in specific types of activities and require a certain level of reporting and public disclosure. An organization that fails to abide by these rules may be placed under sanction or have its tax-exempt status revoked by the IRS. These regulations include:

Private benefit/inurement - An organization may not permit an insider (someone with a personal or private interest in the organization) to benefit substantially from the activities of the organization.

Lobbying - While 501(c)(3) organizations are permitted to engage in lobbying on some level, the amount of lobbying activities must be limited so as not to constitute a substantial portion of the organization's activities.

Political campaign activity/electioneering - 501(c)(3) organizations and their representatives (while acting in an official capacity) may not campaign for or against candidates for elected office.

Unrelated Business Income (UBI) - An organization may lose its exempt status if it generates excessive income from a regularly-carried-on trade or business that is not substantially related to the organization's exempt purpose.

Annual reporting obligation - With the exception of churches and subordinate organizations, all 501(c)(3) public charities are required to file some version of the Form 990 with the IRS on an annual basis. While smaller organizations with gross receipts under $25,000 were previously exempt from this requirement, these charities must now file the Form 990-N (e-Postcard) each year in order to stay compliant.

Operation in accord with stated exempt purpose - An exempt organization is expected to operate in accordance with the charitable purpose or purposes outlined in its application for recognition of tax-exempt status (Form 1023). An organization must notify the IRS of any substantial changes to its operating purpose.

The IRS publishes a list of organizations that have had their federal tax-exempt status automatically revoked for failing to file an annual information return or notice with the IRS for three consecutive years ( Auto-Revocation List.) The Auto-Revocation list may be viewed and searched on Exempt Organizations Select Check (EO Select Check) on IRS.gov. The Auto-Revocation List provides the organization's name, employer identification number (EIN), exemption type, last known address, effective date of revocation and the date the organization's name was posted on IRS.gov.

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Frequently Asked Questions

Find answers related to e-filing IRS Form 990, 990-EZ, 990-PF, 990-N (e-Postcard), Form 1120-POL and Extension Form 8868 with our Frequently Asked Questions.

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