Tick-Tock – Time Is Running Out For Delinquent 990s

I have blogged about this before, but I thought a reminder was in order. The October 15 deadline for tax-exempt organizations to file a Form 990-N is is fast approaching. October 15 is a key deadline for thousands of small nonprofit organizations at risk of losing their tax-exempt status because they have not filed the required forms in the last three years. Many small tax-exempts are unaware of this requirement because it is a new requirement imposed by the Pension Protection Act of 1996.  The first major deadline to file was May 17, 2010 but the IRS offered a relief program, extending the deadline to October 15, 2010.

The October 15deadline is the last chance for many small charities to comply with the law under the one-time relief program the IRS announced in July. Remember, beginning in 2006, even tax-exempt organizations with no revenue must file a 990-N at the very least. Exceptions include the following:

  • Organizations included in a group return
  • Private foundations required to file Form 990-PF
  • 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ
  • Certain faith-based organizations

Two types of relief are available for small exempt organizations – a filing extension for the smallest organizations required to file Form 990-N, and a Voluntary Compliance Program for small organizations eligible to file Form 990-EZ. To comply, small organizations required to file Form 990-N should go to the IRS website, complete the form, and electronically file it by Oct. 15, 2010.

Under the Voluntary Compliance Program, larger tax-exempt organizations eligible to file Form 990-EZ (but not eligible to file Form 990-N) must file their delinquent annual information returns by October 15 and pay a compliance fee which is between $100 and $500 depending upon the organization’s revenues.  Details about the VCP are on the IRS website , along with frequently asked questions.

Note that the relief program is not available to larger organizations that are required to file the Form 990 or the Form 990-PF.

The IRS will keep today’s list of at-risk organizations on its website until Oct. 15, 2010. Organizations that have not filed the required information returns by that date will have their tax-exempt status revoked, and the IRS will publish a list of these revoked organizations in early 2011.  Contributions from donors who contribute to at-risk organizations will qualify for the charitable contribution deduction until the final revocation list is published.