Washington, DC (August 2, 2010)- The Internal Revenue Service has announced that there will be a one-time reprieve for small nonprofit organizations that have not filed the required Form 900-N during the past three years. It has also announced a special compliance program for organizations that have not filed the IRS Form 990-EZ for the past three years.
Starting with the first tax year beginning on or after January 1, 2007, the Internal Revenue Code provides that most tax-exempt nonprofits are required to file some form of the IRS Form 990. Depending on the size of their assets and annual gross receipts, publicly supported nonprofits must file Form 990, 990-EZ or 990-N. Private foundations must file the 990-PF.
The Internal Revenue Code provides that if a nonprofit fails to file the required form for three years in a row, it will automatically lose its tax-exempt status.
This new requirement has been especially challenging for the smallest nonprofit organizations with gross receipts that are normally $25,000 or less. These organizations file the Form 990-N.
Now, in a one-time move, the IRS has extended the filing deadline for the Form 990-N until October 15, 2010. This will allow small nonprofits that failed to meet the filing deadline additional time to comply with the filing requirement.
In addition to the one-time relief for Form 990-N filers, the IRS also announced a voluntary compliance program for organizations that met the filing threshold to file the Form 990-EZ for the tax years 2007, 2008 and 2009, but failed to file a Form 990-EZ for those years. These organizations are also at risk of losing their tax-exempt status.
Many state nonprofit associations will be offering support and referral services to help agencies comply. Contact your state association for details.