What is the Form 990?
Form 990 is the annual information return required to be filed with the IRS by most organizations exempt from income tax. The form requires disclosure of information about the organization’s mission, program achievements, governance, and finances. The Form 990 is subject to Federal public disclosure laws. There are many websites that make 990s available for the public to review.
What is the purpose of Form 990?
Form 990 is an information return which the IRS and those invested in the organization (donors, recipients of grants, press media, etc.) can use to evaluate a nonprofit’s performance. The 990 should be used by a nonprofit as a platform to display their accomplishments and to enhance transparency.
Are there any exceptions to the requirements to file Form 990?
Certain church-affiliated organizations and governmental organizations are not required to file annual information returns with the IRS.
Who must file Form 990?
If your organization is required to file an annual information return, the organization’s financial activities generally determine which form you must file. Table below is copied directly from the IRS website.
Form to File
|Gross receipts normally ≤ $50,000|
Note: Organizations eligible to file the e-Postcard may choose to file a full return
|Gross receipts < $200,000, and|
Total assets < $500,000
|Gross receipts ≥ $200,000, or|
Total assets ≥ $500,000
|Private foundation – regardless of financial status|
Note that 509(a)(3) supporting organizations, Section 527 political organizations, and private foundations are not eligible to file the 990-N e-Postcard, regardless of their financial activities.
In addition, tax exempt organizations that generate over $1,000 in unrelated business income must file a 990-T return annually. Deadlines to file the 990-T are the same as other 990 returns.
When is the Form 990 due?
The form is due to the IRS on the 15th day of the 5th month after the fiscal year end of an organization. For example, if the fiscal year end was December 31st, the filing deadline would be May 15th of the following year. Likewise, if the fiscal year end was June 30th, the filing deadline would be November 15th. There are a two 3-month extensions which can be filed to extend the filing due date for a total of six months. The second extension must include a signature and reasonable cause why the return cannot be filed by the first extended due date.
What is the penalty for late filing or failure to file?
Late filing penalties for organizations whose gross receipts are less than $1 million are $20 per day up to either $10,000 or 5% of the organization’s gross revenue, whichever is less. For an organization with gross receipts over $1 million, the penalty is $100 a day up to a maximum of $50,000.
The IRS will automatically revoke the tax exempt status of any organization that fails to file the Form 990 return for three consecutive years. Once an organization’s exempt status is revoked, the organization will have to file Form 1023 in order to receive reinstatement of its exempt status. This process can be lengthy and costly and should be avoided if at all possible.