IRS Return Filings

We were contacted recently by a customer who serves as treasurer of the village community center. The center operates with a small budget, has one employee and is governed by a volunteer board. It is considered a tax-exempt organization by the IRS.

Our customer contacted the bank looking for help because she had been notified that the community center’s Employee Identification Number (EIN) was no longer valid, and that their tax-exempt status was in question.

In conversation, we were able to determine that the community center had never filed an IRS return, which led to the notices and tax-status issues. They simply did not realize there was a filing requirement, which is a common misconception among small tax-exempt or non-profit entities, especially those run by all-volunteer boards.

We know many of our readers are involved in community boards and organizations, and thought it would be helpful to share this story along with basic information on filing requirements for small organizations from the IRS website.

Who must file:
Most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less can satisfy their annual reporting requirement by electronically submitting Form 990-N if they choose not to file Form 990 or Form 990-EZ instead.

Exceptions to this requirement include: Organizations that are included in a group return, Churches, their integrated auxiliaries, and conventions or associations of churches, and organizations required to file a different return

Form 990-N – also called the e-Postcard – is easy to complete.

You’ll need only eight items of basic information about your organization.

1. Employer identification number (EIN), also known as a Taxpayer Identification Number (TIN).
2. Tax year
3. Legal name and mailing address
4. Any other names the organization uses
5. Name and address of a principal officer
6. Web site address if the organization has one
7. Confirmation that the organization’s annual gross receipts are $50,000 or less
8. If applicable, a statement that the organization has terminated or is terminating (going out of business)

When the is filing due date?

Form 990-N is due every year by the 15th day of the 5th month after the close of your tax year. You cannot file the e-Postcard until after your tax year ends.

Example: If your tax year ended on December 31, the e-Postcard is due May 15 of the following year. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.

While there is no penalty assessment for filing Form 990-N late, organizations that fail to file required Forms 990, 990-EZ or 990-N for three consecutive years will automatically lose their tax-exempt status. Revocation of the organization’s tax-exempt status will happen on the filing due date of the third consecutively-missed year. If your 990-N is late, the IRS will send a reminder notice to the last address we received.