Level Grinding Your Tax-Exempt Status

Managing a tax-exempt organization isn’t always sunshine and perfect endings, we know. While your main concern is meeting the goals of your organization, you probably have 10 or 15 extra matters that require your attention, least of all your financial obligations in order to keep your organization up and running smoothly. You already know that you’re required to file one of the Form 990 series to avoid automatic revocation your tax-exempt status, but… It’s Levels To This!

We couldn’t agree more. There are levels to maintaining a tax-exempt status and losing it is like being beaten in an epic boss battle in which you’ll have to start over. No one wants that. So build up your EXP (experience) with these tips and level up your tax-exempt status to its ULTIMATE FORM!!!

Level 1: Prove Your Tax-Exempt Organization Acts In Agreement With Its Mission
Along with following IRS filing regulations, have your organization’s employees or Board of Directors compare activities with the mission on record with the IRS to make sure they flow in harmony.

Level 2: Elect Dedicated Members
Make sure that those who are serving as your Board of Directors are committed to your organization’s yearly reporting responsibilities to the IRS as well as to any other state filing requirements.

Level 3: Stay Informed & Avoid Participating In Excessive Or Restricted Lobbying Activities
Too much lobbying can result in your organization being fined or stripped of exempt status as described in a section 501(c)(3). If lobbying is necessary, you should think about possibly creating a separate affiliation to engage in these activities.

Level 4: Guarantee That Each Of Your Organization’s Employees’ Compensation Is Evaluated Annually
Compensation should be in sync with industry guidelines so no one receives an excessive amount of pay or benefits, which could inadvertently conflict with your organization’s mission. Overpaying can result in a loss of tax-exempt status or impose an excise tax on those who approved and received the compensation.

Level 5: Outsource Assistance To Stay In Compliance
Working alongside an association management company (AMC) can help reduce the amount of responsibilities, minimize risk, and keep your organization up-to-date and compliant with tax laws and regulations. AMC’s can assist in day-to-day operations as an extension of your organization’s staff or volunteers.

Level 6: File The Appropriate Form 990 For Your Organization On Time
There are 3 different 990 forms for tax-exempt organizations:

  • Form 990 (Long Form) – Your organization has gross receipts greater than or equal to $200,000 and total assets greater than or equal to $500,000.
  • Form 990-EZ – Your organization has gross receipts less than $200,000 and total assets less than $500,000.
  • Form 990-N (e-Postcard) – Your organization has gross receipts less than $50,000.

The deadline to file the appropriate return is the 15th day of the 5th month after the end of your tax period. Failing to file for three consecutive years will result in an automatic loss, or “Game Over,” of your tax-exempt status.

Gain an extra power boost by e-filing your return with Express990. We support all three 990 forms, and you can get your Form 990-N (e-Postcard) for the current year e-filed for FREE.

For any help or questions about e-filing your Form 990, feel free to contact our live professionals at (704) 839-2321 Monday through Friday, from 9am to 6pm, Eastern Standard Time. We’re also available through email at support@expresstaxexempt.com or live chat at www.expresstaxexempt.com.

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