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501(c)(3) Non-Profit Compliance — Understanding IRS Forms 990, 990-EZ, and 990-N

by: Anthony Parent   2019-01-23

All non-profit, tax-exempt organizations are required to file specific forms with the Internal Revenue Service (IRS) every year. These forms are known as 990, 990-EZ, and 990-N. You need to file them to make sure your non-profit remains compliant with IRS rules — this means you can maintain your 501(c)(3) tax exempt status.

 

 

We’ll explore how these forms work, the information you need to include, and how to file them with the IRS.

 

Non-profit, foundation, and charity Annual Information Return requirements

All tax-exempt organizations, including non-profits, foundations, and charities must file an “annual information return” or notice with the IRS, unless you have an exception, which is rare. These annual information returns mean that you must complete and file one of Form 990, Form 990-EZ, Form 990-N, or Form 990-PF.


 

Managing a non-profit — The form you need to return to maintain tax-exempt status

The specific form you need to fill in and file tends to depend on how much money your non-profit takes in — your “Gross Receipts,” and the total value of the assets of your non-profit.

 

Annual gross receipts and total assets

Type of 990 form

Gross receipts less than $50,000

File 990-N*

Gross receipts less than $200,000 and total assets less than $500,000

File 990-EZ or 990

Gross receipts more than $200,000, or total assets more than $500,000

File 990

Private foundation, regardless of financial status

File 990-PF

 

*Note that even if you only need to file a Form 990-N, you can still choose to file a full 990 return if you choose to do so.


 

What a Form 990 tax-exempt return and variant forms are used for

The IRS and non-profit organizations use Form 990 and related forms in various ways including:

 

  • IRS — Get information about tax-exempt organizations.

  • IRS — Educate non-profits about tax law requirements to maintain 501(c)(3) status.

  • IRS — Promote compliance with IRS rules to remain tax-exempt.

  • Non-profits — Share information with the public about the organization and programs.

  • State gov. — Complete charitable and regulatory oversight of non-profits.

  • State gov. — Manage state income tax filing requirements for state income tax-exempt organizations.


 

Key information for filling in a Form 990-N tax-exempt return

Form 990-N, also known as an e-postcard can only be filed online with the IRS, there is no paper version of the form. You will need the following information to fill in and file a 990-N:

 

  • Employer identification number (EIN).

  • Legal name of the non-profit and mailing address.

  • Any other names the organization uses.

  • Name and address of a principal officer.

  • Web site address.

  • Confirmation that the organization’s annual gross receipts are $50,000 or less.

  • If applicable, a statement that the organization has terminated or is terminating.

 

That’s it — nice and simple.


 

Key information for filling in a Form 990-EZ tax-exempt return

The EZ (easy) version of Form 990 is more complex than the 990-N, but not as detailed as the full 990. Here are the key areas you’ll need to provide information on, in addition to what you’d provide in a 990-N.

 

  • Summary of grants, contributions, membership dues, investment returns received, and other income.

  • Summary of operational expenses and money spent on running the organization and charitable activities.

  • Summary of gross and net income, profit, or loss and total revenue.

  • Benefits and salaries paid to various parties and employees.

  • Summary of types of assets, their value, and changes in asset value over the year.

  • What the non-profit has accomplished in its three largest programs.

  • Officers, directors, trustees, and key employees with compensation and benefits.

  • Other miscellaneous information and schedules.


 

Key information for filling in a Form 990 tax-exempt return

 

Finally, we have the full Form 990. Here’s the information you’ll need to provide, in addition to that shown under Form 990-N and Form 990-EZ above.

 

  • Checklist of required schedules that must also be filed.

  • Statements regarding other IRS filings and tax compliance.

  • Details of governing body and management.

  • Policies and disclosures.

  • Complete statement of revenue — how much the non-profit earned from various sources.

  • Complete statement of expenses — how much the non-profit spent on various activities.

  • Balance sheet — current financial position.

  • Reconciliation of net assets.

  • Financial statements and reporting declarations.

 

You will also have to fill in and file additional schedules, depending on the nature, activites, and other factors of your non-profit, foundation, or charity. 990 is a long and complex form, so be sure to get some expert advice when you’re filling it in.


 

When Form 990 and variants are due to be filed

 

The IRS defines the dates that these forms must be returned by. We’ve detailed the information below for convenience.

 

Ending date of tax year

Initial return due date

Extended due date

December 31

May 15

November 15

November 30

April 15

October 15

October 31

March 15

September 15

September 30

February 15

August 15

August 31

January 15

July 15

July 31

December 15

June 15

June 30

November 15

May 15

May 31

October 15

April 15

April 30

September 15

March 15

March 31

August 15

February 15

February 28/29

July 15

January 15

January 31

June 15

December 15


 

How to file Form 990 and variants

These forms can be completed and mailed to the ITRS so they arrive before the due date, or they can be filled in and filed electronically.


 

Penalties for Not Filing a Form 990 or Variant as Required by the IRS


If a non-profit or other tax-exempt organization doesn’t file a Form 990 annual return or files late, the IRS may penalize the organization with a fine. If an organization does not file as required for three consecutive years, it will automatically lose its tax-exempt status.


 

What causes Form 990 and variants to be rejected

The IRS will return or reject 990 forms that are incomplete, on the wrong form, or that otherwise contain errors. They will normally provide information on why the form was rejected, so the organization can make corrections and re-file. The most common issues that cause rejection is  missing or incomplete schedules.


 

Useful external non-profit and tax exempt resources on the IRS website


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