Small Business Questions & Answers


Filed under Tax Center

Ask About the New (Mandatory) Not-for-Profit Tax Form

by Auntie Bureaucracy | May 20, 2012

Subject :Business Entities and Not-for-Profits

Dear Toolkit,

I just heard an ugly rumor about an IRS form our little non-profit community brass band needs to file, electronically no less. Say it isn't so! Or at least tell me why!


Auntie Bureaucracy

Dear Auntie Bureaucracy,

We feel your pain in theory, but, in fact, you won't suffer much. It's true. . .small, tax-exempt organizations (over 650,000 of them) are required to submit Form 990-N, fondly called the e-Postcard. But it's just a small information return.

Previously, tax-exempt organizations with gross receipts of $25,000 or less were not required to submit information returns. But those good old days are gone forever. Churches, however, and some foundations will be exempt from this new requirement.

The annual electronic form is due by the 15th day of the fifth month after the close of your tax period. For example, if your tax period ends on December 31, the annual electronic notice is due May 15 the next year. Reporting requirements are very simple, but organizations that ignore it risk losing their tax-exempt status.

The e-Postcard (Form 990-N) requires small organizations to provide a legal name and mailing address, any other names used, a Web address if one exists, the name and address of a principal officer and a statement confirming the organization's annual gross receipts are normally $25,000 or less.

If you think this new filing requirement may apply to your organization, go to the IRS' charities website for complete details. . .and while you're there, sign up for Exempt Organization's free email newsletter, EO Update, to receive the latest info on this new requirement.

As to the why: The Pension Protection Act (PPA) of 2006 added this filing requirement to improve transparency within the non-profit sector. It's designed to ensure that donors, who may want to contribute to your group, and the IRS have current information about your organization.