ExpressTaxExempt Blog

Tax Tips To Avoid Late Filing Penalties For Form 990-EZ

Unfortunately, just like the 990-N, there’s no sure-fire way avoid IRS penalties for late filing the 990-EZ, except filing on time. In order to understand the gravity of this situation, let’s look at what the penalties could be if you fail to file:

“If an organization whose gross receipts are less than $1,000,000 for its tax year files its Form 990 after the due date (including any extensions), and the organization doesn't provide reasonable cause for filing late, the Internal Revenue Service will impose a penalty of $20 per day for each day the return is late. The maximum penalty is $10,000, or 5 percent of the organization's gross receipts, whichever is less. The penalty increases to $100 per day, up to a maximum of $50,000, for an organization whose gross receipts exceed $1,000,000.
  • “An organization that fails to file the required information return (Form 990, Form 990-EZ, or Form 990-PF) or e-Postcard (Form 990-N) for three consecutive tax years will automatically lose its tax-exempt status.”
That’s a hefty payment for a tax-exempt organization and losing your exempt status is no joke. You can make filing your 990-EZ less...dare we say it...taxing by having all of your information ready before you begin filing. Nothing ratchets up the stress meter like a fast-approaching deadline and not being able to find the address of a big contributor.

We also recommend making this a group effort: have those in your organization that know it best to divide the work between the, based on who is better at what. Assign fundraising events to whoever puts together your events. Give the donor list section to the person who knows your biggest donors best. Let the public relations officer handle the explanation of the organization’s exempt purpose. Long story short, “teamwork makes the dream work.”

You can avoid pesky and potentially organization-ending IRS penalties by filing in a timely manner, filing a Form 8868, Extension of Time to File, or adding an explanation as to why you’re filing late. The IRS will assess penalties on a case-by-case basis given an adequate explanation can be produced. In any case, being proactive can reduce your stress and keep you out of hot water, so file with Express990.com and stop letting those taxes get to you.

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Tax Guide To File Form 990-EZ With The IRS

The fastest and easiest way to file your Form 990-EZ is to file with Express990.com. Simply navigate to the site, click on “New Users,” and create an account. Once your account has been created, you will be taken to your Dashboard and can immediately begin filing your return. Filing with Express990 is fast, easy, and simple. They offer around-the-clock, U.S.-based customer support at no charge.

Before you begin, here’s a few tips for a seamless and stress-reduced filing process:
  • Make sure you have all of your information - for security reasons, our system will time you out if you go too long without activity and it’s always much easier when everything is right next to you
  • Split it up, if necessary - have different people working on different sections; work in shifts; sharing the load greatly reduces the stress and hassle of taxes
  • Get comfortable - even though our system is designed to be quick and efficient, there’s still a lot of information to be processed and you may be there a while
  • Skip around - complete the easiest parts first so you can concentrate on the more difficult sections afterwards
  • Use your resources - Express990 offers three-way support: phone calls, chats, and emails; don’t hesitate to contact us if you need assistance
  • Take a break - the 990-EZ is a hefty tax form that requires a lot of attention; be sure to step away for a little while to regain your focus...and your sanity
  • Take a deep breath - you can do this! Each question is a question sooner to being done, don’t give up hope now
As you can see, though the stresses of filing Form 990-EZ are completely avoidable, there are many things you can do to help stem the tide of woe and despair. Don’t think you’re in this alone, we’re here to help any way that we can. For legal reasons, we can’t give you direct tax advice, but we can help you navigate through the software and point you in the right direction.

Call, live chat, or send the Express990 team an email. You can reach us from 8 a.m. to 6 p.m. EST at (704) 839-2321 or 24/7 at support@expresstaxexempt.com. Once you submit your 990-EZ, you should hear back from the IRS in around 15 minutes. You will receive an email from us confirming your form’s acceptance or rejection. Should it be rejected, we’ll help you find out why and there’s never a charge to re-submit your form.
Express990.com also provides e-filing of:

Form 990-N (e-postcard) for current and previous tax years

Form 8868 - Application for Extension of Time to File an Exempt Organization Return

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How To Recover Payments Due to IRS Penalties

Unfortunately, there is no way to recover penalties and fees paid to the IRS. However, you can avoid those penalties by filing in a timely manner, e-filing a Form 8868 (Extension of Time to File), or adding an explanation as to why your filing late. The IRS will assess penalties on a case-by-case basis given an adequate explanation can be produced.

The best way to avoid IRS penalties is to file on time or, if you won’t be able to file on time, to file for an extension. Extensions of time to file for tax-exempt organizations are usually in 3-month increments. The first, like all extensions, is automatic and does not require an explanation. The second, non-automatic extension is granted based on the reasons the organization lists on the application. So what are appropriate reasons to file for an extension, or even to try and escape hefty penalties?

The IRS looks for something they call “facts and circumstances,” or reasonable explanations as to why the organization is delinquent in their filing. Here is what they are looking for:
  • What prevented the organization from requesting an extension of time to file its return, if the organization did not request such an extension
  • How the organization was not neglectful or careless, but exercised ordinary business care and prudence
  • What steps have been taken to prevent the same situation from occurring in the future
Should an organization be able to give all of these explanations, they stand a much better chance of having their taxes abated. The penalties may also be forgiven if the organization can show that it was delinquent due to events outside of its control or because of advice given by a certified tax professional.

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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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