As your local CPA and tax preparation services provider throughout the Tri-State area, Halpern & Associates works to ensure all clients are knowledgeable and well prepared come tax season.
Even though a lot of non profit organizations are exempt from paying federal tax (tax-exempted), they are required to file an informational return with the IRS. This report is filed annually and it is called the Form 990.
What is the IRS Form 990?
The Form 990 issued by the IRS is used to report returns for organizations that are exempt from paying federal taxes, such organizations include non profits. The form is filled and given to the IRS each year. The form fully evaluates the operations of the non profit organization. The activities of the non profit being monitored include their mission, programs, and finances.
There are different types of Form 990 and the one to be filed by the organization is dependent on the year and the gross receipts of that organization. The Forms that exist are Form 990, Form 990-EZ, and Form 990-N. Halpern & Associates is here to help clients determine which forms they need.
Who files the IRS Form 990? Which Form 990 do we file?
For organizations that are exempt from paying federal tax, they are required to file a 990. The only organizations not required to do so are churches and state institutions. All private institutions should file a 990.
The IRS is always available to provide you with adequate information that will help you determine which form you will file.
- For big and larger non profit organizations (those with a gross receipt larger than $50,000) should file a Form 990 or 990-EZ.
- The smaller non profit organizations (those with a gross that is less than $50,000) are required to file Form 990-N
- Private foundations should file Form 990-PF
What non profits are exempt from filing IRS Form 990s?
For non profit organizations, not all of them are required to file their annual returns. The following set of organizations are not required to file Form 990:
- Faith oriented organizations, missionary organizations, and religious schools.
- Subsections or groups that are under a non profit organization.
- Several government corporations.
- State institutions that are set up to provide essential services to the people.
However, it is very important that you check with the IRS to know if your organization is required to file any Form 990.
When is the IRS Form 990 due?
After filing the Form 990, it is required that you submit it on the 15th day of the 5th month after the end of the organization’s taxable year. That implies that you have to know your organization’s calendar and submit the form when it is due.
What happens if our non profit does not file IRS Form 990?
In a case whereby a non profit organization fails to file its Form 990, the IRS will be forced to revoke the tax-exempt status of the organization. This is a very serious scenario as it has happened to thousands of organizations over the past few years.
Once the tax-exempt status has been revoked, your organization cannot appeal the decision as the IRS has no appeal process for this. Without the tax-exempt status, your organization will be forced to pay income tax.
Can the IRS Form 990 be seen by the public?
The IRS Form 990 filed by a non profit organization should be made available to the public. The public can inspect the file during regular business hours. It is even better to make the form available to the public on your website. This will make it much easier for the public to inspect.
If you have any additional questions or concerns about this form or other tax related forms, do not hesitate to contact the professionals at Halpern & Associates today!
