ExpressTaxExempt Blog

990 Penalties & How To Avoid Them

The main questions the Express990 Team receives are almost always about penalties. When it comes to 990 penalties, things get a little tricky. But don't you worry, I will explain them in detail and how you can avoid them or reinstate your tax exempt status.

Incomplete Returns
If you file an incomplete return, say you didn't fully complete a certain schedule on your 990-EZ, the IRS will contact you to notify you of the problem.

Late Filing Penalty
Late filing penalties are completely avoidable. First know, if you need more time you can e-file Tax Extension Form 8868 for an automatic 3-month deadline extension. Form 8868 can save you from having to pay hefty late filing penalties. The IRS states:
"If an organization whose gross receipts are less than $1,000,000 for its tax year and 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%, 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."

  • Note there is no penalty assessed for late filing of the 990-N (e-postcard). If you do not file your 990-N, the IRS should send you a reminder notice. If you do not file your 990-N for three consecutive years, your tax exempt status will be automatically revoked. 
Reinstating Tax Exempt Status
If you have found out your tax exempt status has been revoked, you will need to contact the IRS. For most cases the IRS can reinstate your status over the phone, or they will let you know what you need to do. The IRS publishes an Automatic Revocation of Exemption List that has the names of organizations whose tax exempt status has been revoked so you can know for sure where your status stands. 

The best way to avoid 990 penalties is to file by your deadline. Your 990 deadline will be determined by what type of tax year you follow; Fiscal or Calendar. If you have any questions about e-filing your 990 or Form 8868 (application for extension of time to file an exempt organization return) don't hesitate to contact the Express990 team via phone: 704-839-2321 or email: support@expresstaxexempt.com

For More Information on 990 Penalties, check out these blogs:

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Top 5 Ways To Prepare for Spring

We are in the home stretch to warmer weather and bright beautiful colors. The Express990 team is very excited to see the colors of spring and weather above 45 degrees. We all started thinking about what will be happening once spring has finally sprung and realized that there is a lot that needs to be done before March even arrives. After a little research and some talking with the Express990 team, I have put together the Top 5 Ways To Prepare for Spring, and they aren't exactly what you would be expecting...

Anticipate the Allergy War
If you are prone to allergies, then spring might not be your favorite season. You can start to prepare yourself now for the major pollen surge that is about to happen. There are a lot of homeopathic remedies for allergies like eating a teaspoon of local honey, probiotics, and certain diet changes. These work great if you want to start building up your body's defense now. If you are more of the over-the-counter type person, then make sure your allergy medication is not expired and that you have some ready to go.

Purge, Clean, & Organize
You knew this one was going to be somewhere on this list. Why wait until spring to freshen up your work area or jump on organizing those files and documents building up on the table? Now is the perfect time to breathe new life into your work space. Start with throwing away, or recycling, any un-needed items from your work area. Next, clean every surface and wipe out desk drawers. Last, organize. Make sure everything is organized and put somewhere you know where it is.

Once your work space is all clean and organized, it's time to plan. It is always good to have a designated time set aside to plan out your next few weeks. You want to know what is coming up, important dates, and everything else. As a tax exempt organization, when you are well prepared that will be reflected in your organization, and help you achieve your goals. Don't forget to plan for your Form 990 deadline. If you do not file for three consecutive years, then your tax exempt status can be revoked.

Find Your Center
With the Holiday Season and long winter months, you might find yourself a little out of balance. Now that a new season is almost here, it is time to come back to your center and prepare your mind to focus on the months ahead. There are tons of ways to do this from a simple daily walk to meditation and yoga. Even a consistent workout routine will clear your mind and help you get rid of all the stress that has built up through the winter. If you are not sure where to start when it comes to de-stressing and finding a calm, check out this amazing search engine called Healing Radius. It is an amazing resource for finding holistic healing in your area, as well as great blogs and heath + fitness information. 

Let The Ideas Flow
The last way you can prepare for spring is to come up with new ideas on how to improve your organization. This can be from social media to interacting with the community. Try creating an idea board where people can post up ideas on a certain improvement project or different ways you can get your organization's name out to the community. Once you have an organized work space and a clear mind, those ideas will just flow.

Before you go, I just want to mention again to not forget your 990 deadline. I have a whole blog on how to know when your deadline is and how to extend it if you need more time - Tax Exempt & Nonprofit Tax Extension. Have fun preparing for spring because life should never be too serious.

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990-N: Frequently Asked Questions

If you are new to e-filing a 990-N (e-postcard), then you might have a few questions? The Express990 support team has got you covered. We gathered up the most popular FAQs to go over, so let's get started!

1. When do I file my 990-N?
Not going to lie, this question stumps a lot of people because there is not set date for everyone. Confusing, I know, but it is pretty easy to figure out when you need to file. Your 990-N deadline will be determined by what type of tax year you follow; Fiscal or Calendar. Once you know your type of tax year, then all you need to know is your deadline is on the 15th day of the 5th month after the last day of your tax year. For example; if your tax year ended on December 31st, the 990-N will be due on May 15th.

2. Who would be considered a principal officer?
Your principal officers are your current president, vice president, treasurer, assistant treasurer, chief accounting officer, or other corporate officers (such as a tax officer).

3. Are there any penalties for filing late/not filing Form 990-N?
There are no penalties for filing late but there are for not filing at all. If you go three consecutive years without filing a 990-N, the IRS will revoke your tax-exempt status.

4. Can I e-file a 990-N for a previous year with Express990.com?
You sure can! Better late than never, right? Once you are logged into your Express990 account and choose to e-file your 990-N, you will be able to select the year you want to e-file for.

5. How do I e-file a 990-N if I'm not around a computer?
Don't you worry; we have a 990-N App. It is free to download for Apple and Android devices.

6. How much does it cost to e-file a 990-N?
It cost nothing to e-file a 990-N for the current tax year. You read that right, it is completely free to e-file a Form 990-N with Express990 for the current tax year.

7. What do I need to e-file a 990-N?
You only need a few bits of information to e-file a 990-N:
 Employer Identification Number (EIN) or your Tax ID Number (TIN)
 Tax Year
 Legal name and address
 Different names the organization uses
 Website (if you have one)
 Name and Address of a Principal Officer
 Confirmation of gross receipts of $50,000 or less
 (if applicable) A statement that the organization is going out of business

E-filing a 990-N only takes a few minutes with Express990.com. If you do have questions about the e-filing process, don't hesitate to contact our Support Team via phone: 704-839-2321 or email: support@expresstaxexempt.com.

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Tax Exempt & Nonprofit Tax Extension

Do you know the #1 reason why tax exempt organizations lose their tax exempt status? They do not file Form 990.

Side note: It is a lot easier for me to refer to both tax exempt and nonprofit organizations as simply -tax exempt. It's almost like all nonprofits are tax exempt organizations, but not all tax exempt organizations are nonprofits. Similar to all thumbs are fingers, but not all fingers are thumbs. You get what I'm saying? I believe you do, so lets get to what this blog is really about.

There are a million reasons why a tax exempt organization doesn't file their Form 990, but if this form is not filed for three consecutive years or more, tax exempt status is automatically revoked. One main reason this form is not filed is because the deadline is during a very inconvenient time and can be easily forgotten. The IRS doesn't send any notices letting you know that  your 990 is due soon, or you missed filing your 990, or if your tax exempt status has been revoked. So you really need to mark your calendar for your 990 deadline.

When is the 990 deadline?
The 990 deadline is the 15th day of the 5th month after the last day of your tax year (fiscal or calendar). For example; if your tax year ended on December 31st, then your 990 is due by May 15th of the following year.

If you need more time to file your Form 990, you can extend your deadline with Form 8868.

  • You can't extend the deadline for a 990-N, but honestly the 990-N only takes a few moments to complete and can be e-file from anywhere with our 990-N App
Form 8868
Form 8868 is an application for extension of time to file an exempt organization return. When e-filed, it will give you an automatic 3 month extension. If you need additional time, Form 8868 can be e-filed a second time to request an added 3 months (but it's not automatic). Organizations that can file Form 8868 include: charitable organizations, churches and religious organizations, private foundations, and other nonprofits.

Form 8868 is pretty simple to complete and transmit to the IRS, and you could have your return accepted in as little as 15 minutes. This form needs to be filed by the deadline of your Form 990.

Just remember, if you are a tax exempt or nonprofit organization, you need to file a Form 990 (whether is be the 990-N, 990-EZ, 990-PF, or 990) every year. If you do not file for more than three consecutive years, your tax exempt status will be revoked. When more time is all you need to file Form 990, e-file an extension to save you from deadline stress. If you have any questions about e-filing Form 8868, don't hesitate to contact our Express990 Support team via phone: 704-839-2321 or email: support@expresstaxexempt.com

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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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