IRS Permits More Organizations to File Form 990-N

The IRS today issued guidance (Revenue Procedure 2011-15) that will allow more tax-exempt organizations to file the simplified e-Postcard rather than the Form 990-EZ or the standard Form 990.

For tax years beginning on or after January 1, 2010, most tax-exempt organizations whose gross annual receipts are normally $50,000 or less will be eligible to file the e-Postcard. Previously, the threshold was set at $25,000 or less. Supporting organizations of any size are still not eligible to file the Form 990-N. So, for the 2010 tax year, the new filing requirements are as follows:

2010 Tax Year and later
(Filed in 2011 and later)

 

Private Foundations of any size                                     990-PF

Gross Receipts Normally ≤ $50,000                           990-N

Gross receipts < $200,000, and                                    990-EZ
Total assets < $500,000

Gross receipts ≥ $200,000, or                                        990
Total assets ≥  $500,000

Organizations eligible to file the e-Postcard or 990-EZ may choose to file a full Form 990. Organizations that elect to file the Form 990 must still file a complete return.  An incomplete or partially completed Form 990 or Form 990-EZ will not satisfy the annual filing requirement.  Also, you may be assessed a late filing penalty if you file Form 990 or Form 990-EZ late.

This is a wonderful development for small nonprofits and will go a long well to reducing their tax compliance burden. For more information, go to IRS.gov.

Ellis Carter is a nonprofit lawyer licensed to practice in Washington and Arizona. Ellis advises tax-exempt clients on federal tax matters nationwide.

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