ExpressTaxExempt Blog

Never Too Late For 990-N

The year is winding down into its final quarter, and if you still haven’t e-filed your Form 990-N (e-Postcard), it’s not too late. Even if your original tax deadline was all the way back in May, you can still e-file. Even if you didn’t file last year, you can still e-file. Even if your organization didn’t bring in a single dime this tax year, guess what… you can still e-file.

Calendar Tax Year or Fiscal Tax Year
You may already know that filing your tax return has to be done by the 15th day of the 5th month after your organization’s tax year has ended. Your actual tax period end date may vary depending on whether your organization operates on a calendar tax year or a fiscal tax year.

Calendar Tax Year: Your tax year runs from January 1 to December 31, and your tax deadline will always be May 15.

Fiscal Tax Year: Your tax year runs on any day other than January 1 to December 31, and your tax deadline will be the 15th day of the 5th month after your tax end date.

Example: Your tax begin date is April 1, 2014, and the tax end date is March 31, 2015. Your tax deadline will be August 15, 2015.

Little or No Income
A lot of you have asked why you should even file if you have little or no revenue to report. That’s exactly what the 990-N (e-Postcard) is for. You’re basically letting the IRS know that your organization doesn’t have much money to report, at the very least, nothing over $50,000 to report.

However, a great deal can happen within the course of a year. Your exempt organization could grow substantially, or you could receive a lot more contributions. That’s why you have to file each year. If nothing much has changed, you can continue e-filing your 990-N (e-Postcard). If a drastic change has occurred, then you’ll file the most appropriate form for your organization.

You Can Still E-File
The reason why you can still e-file your Form 990-N (e-Postcard) long after your deadline has passed is simple… there are NO penalties for filing an e-Postcard late. Now that doesn’t give you a free pass to just be neglectful or careless, but if you find yourself a few months past due, you don’t have to panic or worry.

While there isn’t a penalty for e-filing late, there is a penalty for not filing at all. After failing to file for three consecutive years, you can lose your tax-exempt status. In order to get it back, you’ll be subjected to fees and a filing process with the IRS. For more information about reinstating your exempt status, check out the following blog: Reinstating Tax-Exempt Status

The year may be inching ever close to the end, but that doesn’t mean it’s too late to e-file. You can e-file your 990-N (e-Postcard) in less than 10 minutes with Express990. And it’s FREE for the current tax year. 

Simply enter your organization details, choose your tax period, indicate you make less than $50,000, authorize your form, and then transmit to the IRS. We even offer live assistance if you need a little extra help. So whether you’re on-time, a few weeks late, or a few months late, Express990 can transmit your tax form quickly and securely.

For any questions or assistance with our e-filing service, feel free to contact our live, expert help at our headquarters in Rock Hill, South Carolina.

Phone: (704) 839-2321 (Monday - Friday, 9am - 6pm, Eastern Standard Time)
Email: support@expresstaxexempt.com
Live Chat: www.expresstaxexempt.com

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Private Foundations

In the recent blog, “Public Charity Test,” we mentioned briefly how Private Foundations have more regulations than Public Charities along with paying a tax on investment income. But that was just a small tidbit about the differences between private foundations and public charities. All exempt organizations listed under section 501(c)(3) are considered private foundations until they can prove they qualify for public charity status.

What is a Private Foundation?
The main difference between a private foundation and a public charity is donor control, that’s it. If your organization operates as a private foundation, then you receive all of your funding from a single donor or a limited group of donors. These donors are usually just one person, a family, or a corporation, but not the general public.

Generally, private foundations have about four sub-categories:
  • Traditional - This is your most common type of private foundation. It may be fully funded by an endowment, or receive funding annually by its donor. The main function of a traditional private foundation is typically to produce grants.
  • Pass-Throughs or Conduits - These types of private foundations keep their donor’s contribution under lock for a short amount of time. The contribution from the donor, and any acquired income with it, is dispersed after the end the tax year in which the contribution was made - usually within two months.
  • Operating - An operating, private foundation works like a public charity in which it has its own charitable activities such as a museum or library; however, that doesn’t make it a public charity - remember about donor control. The only difference with an operating, private foundation is that engages more in working programs than grants.
  • Pooled Common Funds - Both the donor and donor’s spouse can annually choose the recipients of their funds. Generally, the recipients are public charities and even after the end of the donors’ lives, the funds still go to the charity that they have chosen.
Even if your organization has the word “foundation” in its name, that doesn’t mean that you operate as a foundation; it’s all about how you receive your donations. Usually, private foundations are privately created, funded, and managed by either a single person, a family, or a corporation.

Because of the donor control of private foundations, they do not rely on public donors for support; therefore, they are not under the same close, public examination as public charities are. One thing you can bet that private foundations and public charities have in common is both of their tax returns are due on the 15th day of the 5th month after the end of the tax period.

Select your organization status in Schedule A and complete the rest of your tax return form with Express990. We support Form 990990-EZ, and 990-N (e-Postcard), and we offer a safe, secure, and accurate e-filing process that will save you time and money.

For any assistance with e-filing our available 990 forms, you can contact our live professionals by phone (704-839-2321, Monday through Friday from 9am to 6pm, Eastern Standard Time), by email (support@expresstaxexempt.com), or by live chat (www.expresstaxexempt.com).

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Public Disclosure

Your tax season was a breeze. You were able file and transmit your exempt tax return, and it was easily accepted by the IRS. Everything is going so well. And then, one day, you have someone at your place of business requesting information about your organization and its tax filings. No, this isn’t an audit, but just a local citizen asking about the dealings within your organization. Why would a person want to know that stuff? There could be a million and one reasons why, but the main issue here is that your organization has to comply with the request.

FACT: All organizations, except for private foundations, that are under Code Section 501(c) exemption, are required to disclose certain information to whomever is interested.

The IRS regulations require that nonprofits and tax-exempt organizations make the following available to be viewed by the general public:

Annual Information Returns
You have to provide the last three annual information returns filed by your exempt organization, which includes a Form 990, 990-EZ, 990-N (e-Postcard), 990-T, and all submitted schedules and supporting attachments.

Under these same regulations, you don’t have to provide your
  • Form 1120-POL
  • Schedule A of Form 990-BL
  • Schedule K-1 of Form 1065
  • Lists of received contributions, grants, and gifts

Application For Tax Exemption
You also need to provide your Form 1023, Application for Recognition of Tax Exemption, or a Form 1024, along with all the supporting documents and statements that were sent to the IRS.
However, you don’t have make public any applications the IRS haven’t approved or any section 501(c)(3) applications that were filed before July 15, 1987.

So if someone shows up to your organization’s main office, and they request your Form 1023 or your last three tax returns, you must allow that person to see them. This is called an On-Site Request, and the person can even photocopy the forms if the equipment is present. You can also have a representative be there for the copying.

If your organization receives a Written Request, you must satisfy the request within 30 days of receiving it. Here are some key things to keep in mind about written requests:
  • Requests have to include an address in which the information can be sent
  • You’re allowed to charge a reasonable fee for processing the request
  • Fees cannot be higher than $1 for copying the first page and $.15 for each additional page
  • You can request for advance payment of fees before processing the request
  • The request is considered complete as of the date of the postmark or delivery 
If a person’s request is sent and fulfilled through email, the process is considered complete on the date the replied email was sent.

You’re exempt organization is covered under Exemption for Website Posted Documents if your documents are widely available on the Internet, and you don’t have to honor requests for copies. But you do have to provide
  • The website address
  • Steps on how to download the information
  • A format that displays the information exactly how it looks when it was filed 

The IRS may charge a fine for any exempt organization for not complying with regulations. Penalties can be $20 per day with a maximum penalty fee of $10,000 for each return that isn’t provided. There’s no maximum penalty for failing to provide your section 501(c)(3) application; you can expect a daily fee until you do.

Stay in compliance with these disclosures by already having your tax returns e-filed with Express990. We work closely with the IRS in order to provide you with a safe, secure, and accurate e-filing process that will save you time and money. And you receive direct confirmation when your form is transmitted, and whether it’s been accepted or rejected.

For assistance with e-filing any of our available 990 forms, contact our live support by phone Monday through Friday from 9am to 6pm, Eastern Standard Time, at (704) 839-2321, by email at support@expresstaxexempt.com, or by live chat at the Express990 website.

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Automatic Extension Deadline is August 15

Time is quickly winding down, and if you filed an Exempt Organization Extension Form back in May, it’s now time to file either your Form 990 or Form 990-EZ to the IRS. Honestly though, where has the time gone? It seems like just yesterday we had the entire summer season ahead of us with clear skies, hot temperatures, and a laundry list of summer plans. While warm temperatures may still linger for a bit longer, the year pushes forward–tax deadlines and all.

When filing for your August 15 deadline, make sure you file the appropriate 990 form for your organization.
  • Form 990 (Long Form) - For tax-exempt organizations with gross receipts greater than or equal to $200,000 and total assets greater than or equal to $500,000.
  • Form 990-EZ - For tax-exempt organizations with gross receipts less than $200,000 and total assets less than $500,000.
Filing the improper form for your tax-exempt organization could leave you burned (summer pun) with fees and penalties.

Another important step is to double-check your information. Yes, you just had three months for this, but there’s nothing wrong with a last minute look. Make sure the following is current and accurate:
  • Organization’s Name and Address
  • Employer Identification Number (EIN)
  • Internal Revenue Code Subsection (Found in your determination letter from IRS)
Your organization, or any tax-exempt organization that files a Form 990 or 990-EZ, must fully complete Parts I through XII of the tax return. Otherwise, your chances for a rejected form will be at an all-time high, much like the heat index has been this season.

You also should know which schedules need to be filed along with your tax return. When you’re completing schedules,
  • Carefully read the instructions for each required schedule
  • Complete all applicable parts and lines
  • Answer “yes” or “no” to each question (unless otherwise instructed for a particular question)
  • Make an entry on all total lines including the number zero when appropriate
For last minute checks, makes sure that your form has a signature from a current officer of your organization. Also, there’s no need for you to include any personal information not required by the IRS on the return. By doing so, you could potentially set yourself up for identity theft.

Finally, if the summer season got the best of you, it’s possible for you to file a Part II of the Extension Form 8868 to receive an additional, non-automatic 3-month extension.

Whether you’re prepared to file your 990 form or need another extension, you can finish off the Summer in good standing by e-filing with Express990. Our service supports both the Form 990, 990-EZ, and the Extension Form Part II along with other tax return forms required for exempt organizations.

For professional assistance with e-filing any of our 990 forms, contact the live experts at our Rock Hill, South Carolina headquarters by phone (704-839-2321, Monday through Friday from 9am to 6pm EST), email (support@expresstaxexempt.com), or live chat (www.expresstaxexempt.com).

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SPAN Enterprises Ranks #1150 in 2015 Inc. 5000

It’s A Celebration!!!
Express990’s parent company, SPAN Enterprises, ranks #1150 in 2015 Inc. 5000 list of fastest-growing companies. Along with its Inc. 5000 ranking, SPAN also ranks #11 in the Charlotte Metro Area and #1 in South Carolina for software in the entire state.

From our Rock Hill headquarters, SPAN has developed, launched, and supported over 20 cloud-based and mobile applications including the successful line of e-filing products - Express990, ExpressExtension, ExpressTaxFilings, ExpressTruckTax, and ExpressIFTA.

By working closely with the IRS, our service fulfills our passion for helping nonprofits by providing a safe, secure, and accurate process that saves you time and money. Because of the continued use and loyalty of our services by you, and our clients, we are the market leader for 990 forms with nearly 5,000 non-profit organizations filing their returns with Express990. Our purpose with Express990 is to make tax filings simple and easy so that you can quickly get back to serving your community with through your nonprofit or exempt organization.

With your feedback and support, Express990 is always updated and improved with our dedicated team working effortlessly to stay up-to-date with the ever-changing industry. Your satisfaction is a priority here at Express990, which is why we choose to have live professionals on stand-by whenever you need extra help. Our USA-based support team understands the importance of being able to communicate well with you, and to provide the most correct information without all the difficult tax-based jargon.

Providing an easy accessible service is what we do, but the close-knit, individual attention that we give to each of you is what makes us who we are. As we continue to operate in Rock Hill, South Carolina, we believe that big ideas can thrive into limitless possibilities, even within small towns. All of our successes are based from the impact made in your life each and every time you use our services.

We, at Express990, would like to thank you all for your support of our services. Keep the celebration of our parent company’s deserved recognition with your continued use of Express990 for all your tax-exempt, e-filing needs. For assistance with e-filing any of our available 990 forms, contact our live support by phone Monday through Friday from 9am to 6pm, Eastern Standard Time, at (704) 839-2321, by email at support@expresstaxexempt.com, or by live chat at the Express990 website.

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Steep Penalties

Tax Update: If you filed Part I of an Exempt Organization Extension Form 8868, your extended deadline of August 15 is coming up soon - next week, to be exact.

You must be ready to file your Form 990 or Form 990-EZ by then or you could incur some pretty steep penalties from the IRS. “How steep,” you may ask? Some are as much as $50,000 for tax-exempt organizations that have revenues of $1 million or $10,000 for organizations with revenues less than $1 million. These penalties may be charged for either a late return, an incomplete return, or both.

Penalties: As mentioned earlier, penalties are usually based on your organization’s gross receipts. If your organization has gross receipts of less than $1 million, and you have no reasonable cause for filing late, the IRS may impose a charge of $20 for each day your return is late. Your max penalty charge climbs up to $10,000, or 5% of your total gross receipt - whichever amount is less.

For tax-exempt organizations with revenues of $1 million or more, your max charge reaches up to $50,000, and the IRS may charge you $100 for each day your return is late.

Redemption: If for some reason, even after filing an extension, you still have to file late, all hope is not lost. Code Section 6652(c)(3) states that penalties due to late filing may be waived if you can prove “reasonable cause.” As such, the IRS may consider waiving the penalty, but not the interest that has incurred.

To prove your reasonable cause, the request must be a written statement that includes a declaration by an officer or director that the statement is being made under penalties of perjury. Your statement must have all the facts regarding what kept your organization from filing its return on time. This can include
  • What prevented the organization from requesting an extension of time to file its return if an extension was not requested
  • How your 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
Your statement needs to be attached to your Form 990 or 990-EZ along with any necessary documents. Your request could also be submitted as a response to a penalty notice.

Avoid filing late and dealing with IRS penalties by e-filing your Form 990 or 990-EZ with Express990. We work closely with the IRS in order to provide you with a safe, secure, and accurate e-filing process that will save you time and money.

For professional assistance with e-filing a Form 990, contact the live experts at our Rock Hill, South Carolina, headquarters by phone (704-839-2321, Monday through Friday from 9am to 6pm EST), email (support@expresstaxexempt.com), or live chat (www.expresstaxexempt.com).

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Public Charity Test

When you’re filling out a Form 990 or a Form 990-EZ, you’re going to come across Schedule A, which asks if your tax-exempt organization is considered a Public Charity or Private Foundation. According to experts, there’s a default rule that all 501(c)(3) organizations are labelled private foundations until they can prove public charity. 

Private Foundations are exposed to more regulations than Public Charities, and they have to pay a tax on investment income. But that’s information for another blog. To prove that your tax-exempt organization is a Public Charity, you have to pass one of two tests administered by the IRS.

Test 1
The first test states that your organization receives a substantial support in contributions from publicly supported organization, governmental units, or from the general public.

Example: Your organization’s revenue is made through widespread public fundraising campaigns, federated fundraising drives, or government grants.

Experts may explain this as the Donate Charity Test in which your organization normally receives at least one-third its total income from government grants, grants from other public charities, and from members of the public. However, there is a limit.

Only two percent of your funding can come from any one donor, foundation, or corporate fund that’s counted as the numerator, while the entire amount of the gift is counted as the denominator.

Test 2
The second test states that your organization receives no more than one-third of its support from gross investment income, and more than one-third from contributions, membership fees, and gross receipts from exempt-related activities.

Example: You have a membership-free organization like a parent-teacher group, or an art group with box office revenue.

This is also explained as the Gross Receipts Charity Test, which includes receiving at least one-third of your support from government grants, grants from other public charities, and from members of the public. But also by receiving your support from revenues generated by activities within the organization’s exempt purpose.

The second test has a different limit on the amount that can be counted as the numerator. Receipts only up to the greater of one percent of the charity’s total support during the year, or $5,000, is counted as the numerator. The total amount of the gift is the denominator.

These are only glimpses of the complexity of these two test. Of course, there are exceptions, like the Unusual Grant Exception, exclusions, and even exceptions from exceptions. For a careful analysis of your organization’s Schedule A classification, you would want to consult with an accountant or tax professional.
E-file your Schedule A, along with the rest of your Form 990 or 990-EZ, with Express990. We offer a safe, secure, and accurate e-filing process that will save you time and money. We are also backed by expert help with technical and support teams that are the most experienced in the industry, knowing the in’s and out’s of the filing process better than anyone else.

For any assistance with e-filing our available 990 forms, you can contact our live professionals by phone (704-839-2321, Monday through Friday from 9am to 6pm, Eastern Standard Time), by email (support@expresstaxexempt.com), or by live chat (www.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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