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ExpressTaxExempt Blog

Thursday, April 21, 2016

Is Your Nonprofit at Risk? Don't Miss the Warning Signs!

It’s about that time—the time when tax-exempt organizations scramble to find an accountant who will file their Form 990 returns before it’s too late.

But what are the mistakes you’ve made with your nonprofit? Are you ready for the deadline day? Is your nonprofit at risk?

You Haven't Filed Form 990 in Years


The IRS is pretty clear about this—if you haven’t filed in a while, you might be in danger.

The IRS has an automatic revocation for non-filing for three consecutive years.

According to the IRS, if an organization fails to file their annual return as required for three consecutive years, its tax exempt status is automatically revoked after the due date for filing its third annual return.

When an organization loses their tax-exempt status, they may need to file income tax returns and pay income tax, but they will also get the chance to apply for reinstatement of exemption status.

You Don't Know What You're Doing


Of course, filing your 990 forms can be confusing. Instead of getting stuck in the mire, we’re going to break down the basics real quick.

  • Form 990-N (the e-Postcard): You may only file an e-Postcard if you have an organization that makes $50,000 or less a year in gross receipts. 
  • Form 990-EZ: You can use this form if your gross receipts are less than $200,000 or total assets are less than $500,000.
  • Form 990 (long): Form 990 must be filed by an organization if it has either gross receipts greater than or equal to $200,000 or total assets greater than or equal to $500,000 at the end of the tax year.
  • Calendar Tax Year: If your nonprofit organization’s tax period is listed from January 1 to December 31.
  • Fiscal Tax Year: If your nonprofit organization’s tax period begins or ends any date other than January 1 or December 31, like April 1 to March 31, for example. 

You Didn't Know You Can Get More Time


But your tax exempt organization doesn’t have to hit deadline season in a panic!

With Form 8868, you can request an automatic 3-month extension of time to file for your organization.

You can also e-file Form 8868 to apply for an another (non-automatic) 3-month extension to file if the original extension was not enough time.

While the first extension is automatic, the organization must show reasonable cause for the additional time requested in order to get the non-automatic extension.

Don’t worry, though. These mistakes are easy to fix with ExpressTaxExempt.

Need to file Form 990-N? We offer the e-Postcard FREE for the current year! E-filing the 990-EZ and the 990 Long is just as easy with our interview-style, cloud-based software.

And if you’re not ready to file, e-file for an extension or check out the 8868 App!

So ask yourself—is your nonprofit at risk?


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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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