Do you ever have a question about your IRS Form 990 and can’t seem to find the answer? Today we’ll give you some valuable information concerning your filings, written in plain English with links to forms, websites, and information that will hopefully keep your fiscal year-end stresses at bay.
Serious Business
Nobody likes taxes or the IRS, but don’t let that stop you from acknowledging the seriousness of filing your 990 annually. The IRS is the real deal. Like Santa except far more aggressive, they have a list that tells them whether or not your nonprofit has filed its 990 consistently and on time. It’s called the IRS Automatic Revocation of Exemption List.
The IRS website states that “the Internal Revenue Code automatically revokes the exemption of any organization that fails to satisfy its filing requirement(s) for three consecutive years.” This means you have to file your 990 completely and on time each to year to avoid joining the 28,000 nonprofits that are revoked annually on average, of which only 20 percent are reinstated. Keep in mind that even if you’re reinstated after revocation, you remain on this list.
While you may be happier and a great deal less stressed out ignoring your IRS requirements, doing so will not have a happy ending.
Below are the answers to common 990-related questions:
What is a 990?
In “IRS Speak” the 990 Form is the annual reporting tax return document required to be filed by all federally tax-exempt organizations. This form is the way the government (via the IRS) ensures your compliance and evaluates how your institution is doing financially.
In plain English, the 990 is the report card for your nonprofit. Like your personal tax returns, it allows the government and your donors to ascertain whether you are a reliable, honest institution.
Do we have to file?
If you are a tax-exempt organization, you are probably a 501(c)(3) public charity or private foundation and are required to file a 990.
If your project is a fiscally sponsored initiative within an established nonprofit, it’s on them to file. Finally, if you’re a church or state institution, filing requirements are different—see the hyperlinks I just shared for details.
Which form do we need?
Determining which form to complete is based on the amount of your Gross Receipts. Gross receipts are the total amount your nonprofit received from all sources during your accounting period (fiscal year), without subtracting costs or expenses.
Once you know your Gross Receipts, it’s easy to figure out which form to complete:
- Smaller nonprofits (Gross Receipts ≤ $50,000) file a 990-N (e-postcard)
- Mid-size organizations (Gross Receipts < $200,000, and total assets < $500,000) file a 990 or 990-EZ
- Larger organizations (Gross Receipts ≥ $200,000, or total assets ≥ $500,000) file a 990
- Private Foundations file a 990-PF
When is our 990 due?
Forms 990 are due on the 15th day of the fifth month following the end of your organization’s taxable year. For nonprofits on a calendar fiscal year, your due date will be May 15th of the following year.
When is our organization’s fiscal year?
You can find your organization’s fiscal year printed on the upper right section of your IRS Determination Letter. It will be listed as “Accounting Period Ending.”
What if we can’t meet the deadline?
To obtain an automatic six-month extension for your 990, simply file a Form 8868, also known as the Application for Extension of Time to File an Exempt Organization Return.
What happens if we don’t file?
Many consequences can come from not filing your 990 return, including (but not limited to):
- Ineligibility to receive tax-deductible contributions
- Losing your 501(c)(3) status
- Your organization’s name and information being added to the IRS Automatic Revocation List
- Liability to pay federal income taxes
- Fees averaging $20 a day, up to $10,000
- Loss of donor confidence, and often donors themselves!
Do I have to file with my state?
Maybe. Each state has individual requirements for tax-exempt filings, some of which require greater detail or additional forms to accompany your 990 filing. For example, the state of New York requires Form CHAR500 to be filed each year. See the IRS’ list of states and their requirements to ease your journey.
Who can see my organization’s 990?
You are required to make your 990 available for public inspection (without charge, except the cost of any copies printed) at regional and district offices during regular business hours, but this burden can be minimized by posting your 990 to your website. There are numerous websites that provide information on exempt organizations, and many of them provide previously-filed 990’s. Anyone can view the 990 you file—in fact, many donors will specifically search for them and other details prior to making donations. A copy can also be viewed on Guidestar.org or by request through the IRS.
Death and Taxes
The only things certain in life are death and taxes; this is as true now as it was in the 1700’s when Ben Franklin wrote it. For that reason, you should keep your relationship with the IRS a healthy one. If you haven’t had any extenuating issues with them as of yet, 2019 isn’t the year to start! If you have, set a resolution that it won’t happen again.
Although taxes are daunting for many, there are so many resources out there to ease the burden. Can’t find an answer to a 990 question on the IRS website? No problem! Free resources like Blue Avocado and GuideStar offer a helping hand for all of your nonprofit tax questions. Now that you know all the essentials to your 990 filing, you should be ready for a stress-free tax season!
Pop Quiz!
Test your 990 knowledge by answering the following questions and checking the answers at the bottom of the page.
1) What 2 types of organizations do not require filing a 990?
2) What type of 990 should your organization file if:
a) Your gross receipts are less than $50,000 a year?
b) Your gross receipts are less than $200,000 a year but more than $50,000 a year?
c) Your gross receipts are greater than $200,000 a year?
3) When is your 990 due?
4) What form must you file if you cannot meet your 990 deadline?
5) Does your state require any additional documentation to file your 990?
Pop Quiz Answers:
1) Churches and State Institutions; 2a) 990-N; 2b) 990 or 990-EZ; 2c) 990; 3) the 15th day of the 5th month following the end of your organization’s tax year; 4) Form 8868; 5) Check your state here
Cassie Strain has focused the last five years supporting the nonprofit sector as a Sales Executive at Jitasa. As a bookkeeping, accounting, and tax expert, she enjoys working with nonprofits every day and volunteering her free time serving at local elementary schools.
Would you be able to offer some advice on the following issue?
My client is a non profit and owns property that they would like to transfer ownership to the non profits affiliate to boost the affiliate’s borrowing power and then have the affiliate to lease back to the parent for a nominal amount between $0-50/year. Would the transaction have any audit or tax challenges with this?
From my understanding, for consolidated financials, there would be no change in consolidated assets but they would still need to record the transfer since our audit report does include supplementary information that breaks out assets between both entities and any eliminating entries from intercompany transactions.
Hello,
I am a treasurer of a Non-profit Booster group. We used PayPal last year to have our students make trip payments in installments. Since I went over the threshold of $20,000, PayPal issued a 1099-k form. These payments were just filtered from PayPal to our bank so that we did not have to deal with physical checks. I usually file a 990-e postcard but have never dealt with reporting a 1099-k form. Other than contacting a tax accountant, does anyone happen to know how to report a 1099-k? I believe I would also have to report this to the state as well. Any advice appreciated.
Corinne,
Though you collected payments in over $20,000, it doesn’t automatically translate to revenue. If those payments were being held on behalf of the students to subsidize their cost, then those payments were not revenue. Pass-through transactions such are liabilities until the funds are pass to the intended beneficiaries.
990 PF-
Where does a PF submit to get retroactive reinstatement after automatic revocation?
What conditions constitute “Establishing reasonable cause requires a showing that you made every effort to file the returns”
Thanks-
Hello Diane,
Where form 990 PF must be filed:
To file the return, mail or deliver it to:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0027
If the organization’s principal business, office, or agency is located in a foreign country or U.S. possession, mail or deliver the return to:
Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409
(Source)
What Constitutes Reasonable Cause:
Taxpayer’s reason, with dates and explanations – “To show reasonable cause, the dates and explanations should clearly correspond with events on which the penalties are based. If the dates and explanations do not correspond to the events on which the penalties are based, request additional information from the taxpayer that may clarify the explanation.”
Compliance history – “ If this is the taxpayer’s first incident of noncompliant behavior, weigh this factor with other reasons the taxpayer gives for reasonable cause, since a first- time failure to comply does not by itself establish reasonable cause.”
Length of time – “Consider: (1) when the act was required by law, (2) the period of time during which the taxpayer was unable to comply with the law due to circumstances beyond the taxpayer’s control, and (3) when the taxpayer complied with the law.”
Circumstances beyond taxpayer control – “Reasonable cause is generally established when the taxpayer exercises ordinary business care and prudence, but, due to circumstances beyond the taxpayer’s control, the taxpayer was unable to timely meet the tax obligation.”
(Source)
What should I do if a nonprofit ignores or denies a direct request to provide me with a copy of their 990?
Please bear in mind most nonprofits are small, resource-strapped organizations. They tend to share their 990s on their website, plus they’re available via Guidestar USA (now Candid) and other resources, so try and search online first and when contacting them, ask them where they’re posted vs. for a personal copy. Hopefully that’ll work and if they’re really delinquent, your only recourse is to report them to the IRS nonprofit division, see IRS.gov.
Hello!
Thank you for the very helpful article! My question is, as a Private Operating Foundation that accepts, and welcomes ;-), public donations, at what dollar amount am I required to disclose the name and address of the donor on the 990-PF and fill out Schedule B? Is it for any donations of $5000 or more?
Thank you!
Sarah,
We are not tax professionals here at Blue Avocado, so you may want to check with a nonprofit tax professional for a definitive answer. However, we checked in with one of our authors, David Greco, who specializes in finance, and his response was, “I’m not a tax expert but my understanding is that for an organization filing Form 990-PF that received, during the year, contributions totaling $5,000 or more (in money or property) from any one contributor they have to list the name and address of the donor on Schedule B. There are however some special rules for certain types of organizations but in general all 501(c)3’s need to report donors about $5000.”
Good article on 990 requirements – much needed subject. We are a 501(c)(3), all volunteer organization. We build 3-wheel, hand powered transporters (carts) for people in developing countries who have lost use of their legs due to polio, land mines, accidents, and birth defects. All of our carts are built here in the U.S. and all are shipped overseas. We are sponsored by a local church as part of their missions outreach.
My question: do we even have to file a 990? I copied this part of an IRS publication some time ago:
B. Organizations Not Required To File Form 990 or 990-EZ
An organization does not have to file Form 990 or 990-EZ even if it has at least $200,000 of gross receipts for the tax year or $500,000 of total assets at the end of the tax year if it is described below (except for section 509(a)(3) supporting organizations, which are described earlier). See Section A. Who Must File to determine if the organization can file Form 990-EZ instead of Form 990. An organization described in paragraph 10, 11, or 13 of this Section B is required to submit Form 990-N unless it voluntarily files Form 990, 990-EZ, or 990-BL, as applicable.
4. A mission society sponsored by, or affiliated with, one or more churches or church denominations, if more than half of the society’s activities are conducted in, or directed at, persons in foreign countries.
Hi Don,
Thank you for your comment. In response to your questions:
1) If your organization has an EIN and has already obtained tax-exempt status, then you would need to file a Form 990, per your Determination Letter, since you are recognized by the IRS as an exempt entity separate from the church.
However…
2) If your organization has an EIN, but does NOT have exempt-status, it can operate under the church, but should consider applying for its own exempt status. Because if it has an EIN, but is not tax-exempt, it is technically a taxable organization based on the type of entity it applied for its EIN as, and may be subject to filing a taxable business tax return.
Also…
3) if your group does NOT have an EIN, nore exempt-status, then no, technically you do not need to file a Form 990.
Here are also some IRS resources that may be helpful:
https://www.irs.gov/charities-non-profits/annual-exempt-organization-return-who-must-file – list of organizations expected from filing Form 990.
https://www.irs.gov/pub/irs-pdf/p1828.pdf – IRS Publication 1828 – Tax Guide for Churches & Religious Organizations.
https://www.irs.gov/pub/irs-pdf/i990.pdf – IRS 2018 Form 990 Instructions.
If you have any additional questions, please do not hesitate to reach out to either Blue Avocado or Jitasa. Thank you!
How can we find out if our 990N filing was received and accepted by the IRS?
Thanks for the question! We asked one of our regular contributors, David Greco, and here’s his reply:
From what I understand (and I am not an IRS expert), orgs filing the 990-N will not receive a confirmation from the IRS. So it is a very valid question!
To check the status of their electronic filing, they would need to log into the Form 990 Electronic Filing System (e-Postcard) and go to the “Manage Form 990-N Submission” page.
There, they should see the status for each Form 990-N they submitted – indicating whether the form was accepted or rejected. If rejected, they could click on the “Submission ID” link for additional details.
Here is the link:
https://sa.www4.irs.gov/epostcard/
Hope that helps!