Nonprofit Law Basics: Do Nonprofits File Tax Returns? What is a 990?

IRS Form 990s due for tax-exempt organizations

Do nonprofits file tax returns?

Most nonprofit tax-exempt organizations are required to file annual tax returns with the IRS. Even though most tax-exempt nonprofit organizations do not pay federal taxes (that is what “tax-exempt” means), most do have to file an informational return with the IRS. This annual reporting return is called a Form 990.

What is the IRS Form 990?

The IRS Form 990 is the reporting form that many federally tax-exempt organizations must file with the IRS each year. This form allows the IRS and the general public to evaluate a nonprofit’s operations; it includes information on the nonprofit’s mission, programs, and finances.

The type of Form 990 to be filed by an organization depends on the filing year and the gross receipts of the organization. The different forms include Forms 990, 990-EZ and 990-N.

Who files the IRS Form 990? Which Form 990 do we file?

Most federally tax-exempt organizations (with some exceptions like churches and state institutions) file a 990. All 501(c)(3) private foundations file a 990.

The IRS has a helpful chart available that can guide you in determining which form to file.

    • Larger nonprofits with gross receipts of more than $50,000 file Form 990 or 990-EZ
    • Smaller nonprofits with gross receipts of less than $50,000 file Form 990-N (e-Postcard)
    • Private foundations file Form 990-PF
    • Learn more here to see which forms to file.

What nonprofits are exempt from filing IRS Form 990s?

Not all nonprofits have to file annual returns. Generally, the following do not have to file Form 990:

    • Most faith-based organizations, religious schools, missions or missionary organizations
    • Subsidiaries of other nonprofits – those that may be covered under a group return filed by the parent organization
    • Many government corporations
    • State institutions that provide essential services.

It is important to check with the IRS to determine if your organization needs to file a return.

When is the IRS Form 990 due?

Your organization’s Form 990 is due on the 15th day of the 5th month after the end of the organization’s taxable year. This means that if your organization follows the calendar year (January 1 – December 31), your Form 990 would be due on May 15th of each year.

What happens if our nonprofit does not file IRS Form 990?

If an organization fails to file Form 990 three years in a row, the IRS will automatically revoke its tax-exempt status. Since 2011, more than 500,000 nonprofits across the country automatically lost their tax-exempt status for this reason. (Learn more about it here: You’ve Automatically Lost 501(c)(3) Tax-Exemption Status – Now What?)

The IRS has no appeal process for automatic revocations due to failure to file an appropriate Form 990 for three years. Without this status, your organization could be subject to paying income taxes. Additionally, you can avoid paying user fees and filing additional documents with the IRS by submitting your Form 990 each and every year.

Can IRS Form 990 be seen by the public?

Yes. Nonprofit organizations are required to make their IRS Form 990 and their exemption application available for public inspection during regular business hours.

Many nonprofits make 990s available for viewing on their websites. You can also view them at Guidestar, an organization that compiles information about nonprofits.

Resources

990 N e postcardReady for help? We can prepare and file your Form 990-N (e-postcard)! Done – fast and easy!

Click here to get started!

 

What Does It Mean for a Nonprofit to Lose Tax-Exempt Status? by Mollie Cullinane

I.R.S. List of NonprofitsAutomatic Revocation of Exemption List

Comments

  1. JL says

    As a member of a non profit org that tries to fundraise money to help spouses and children of the military go to college, I noticed that our tax id number had been revoked due to the assumption by past board members that just having the id # was sufficient and not being adequately trained or knowledable on the tax subject… No one filed the yearly 990. I’m starting the 1023 paperwork now to have the org be in good standing to try to get that tax id number back to be valid.

    My question: will we have to pay taxes on the year(s) they did not file the 990? That would kill our whole budget as we don’t have much money to begin with, but want to move ahead the legal way as well to help families. I know we have to pay the user fee with the 1023 but didn’t know about taxes since we hadn’t passed along the 990.

    Any insight and information would be greatly appreciated!!

  2. D'Angela Stafford says

    Hello,

    We have just organized a non profit group in a community where we grew up and we have not applied for non profit tax exempt status yet as we are looking into getting some help with doing that. My question is, do we need to file taxes even though we have not been granted the tax exempt status?

    Thanks,

    D’Angela Stafford

    • says

      Maybe. If your non-profit group claims to be tax-exempt and it plans to to file for tax-exempt status with the IRS, your group should file Form 990 (or 990-EZ or 990-N), even though no application has been submitted yet to the IRS nor any determination yet received. Even very small non-profits (receipts under $50,000) may be required to file these annual Form 990s. Feel free to give us a call at 512-298-2898 if you’d like to discuss your options. We are glad to help! Best regards, Mollie Cullinane

Leave a Reply

Your email address will not be published. Required fields are marked *