Tax-exempt organizations should be mindful that Form 990-series information returns are due on the 15th day of the fifth month after a tax-exempt organization's tax year ends. Thus, if your organization operates on a calendar year basis, then your due date is May 15th. Furthermore, organizations with a June 30 year end that previously obtained a six-month filing extension also have a May 15th deadline.
Importance of Filing
The passage of the Pension Protection Act of 2006 significantly magnified the importance of timely filing the applicable Form 990-series informational return. Under the law, which went into effect at the beginning of 2007, an organization that fails to file a Form 990-series informational return for three consecutive years automatically loses its exempt status as of the due date of the third required filing. The law also imposed a new annual filing requirement on small organizations. Churches and church-related organizations, as well as certain other exempted organizations, are generally not required to file a Form 990-series informational return.
What to File
- Tax-exempt organizations with gross receipts of $200,000 or greater, or total assets of $500,000 or greater, must file Form 990.
- Tax-exempt organizations with gross receipts below $200,000 and total assets below $500,000 may file Form 990-EZ.
- Meanwhile, tax-exempt organizations with gross receipts of $50,000 or less may file Form 990-N, unless a special circumstance applies.
- Private foundations must file Form 990-PF regardless of size.
Organizations filing Form 990, Form 990-EZ or Form 990-PF may request a filing extension of up to six months by filing Form 8868 by the due date.
As your organization finalizes its Form 990 and prepares for future years, we encourage you to consider the following strategic tips.
- Telling Your Story and Disclosing Information. Form 990 is a readily accessible public document. Given the breadth and depth of questions asked and the opportunity to provide narrative responses, Form 990 presents a great opportunity to tell your organization's story and convey to the public the importance of its charitable activities. With proper attention, Form 990 can become a useful public relations tool. At the same time, organizations should be careful not to include personal information such as social security numbers and personally identifiable information about donors, clients or benefactors.
- Check the Schedules. Form 990 consists of a core form and various schedules. All organizations required to file Form 990 must complete the core form, and completion of specific schedules is based on the type of activities conducted by the organization. Thus, it is important to identify and complete all schedules that apply to the organization.
- Evaluate Your Policies. Form 990 asks questions about a variety of policies and procedures. Ideally, an organization should be able to answer affirmatively that it has adopted each policy or procedure described in the Form. Depending on which schedules your organization is required to complete, you may need to respond to questions about the existence of policies or procedures addressing conflicts of interest, whistleblower, document retention and destruction, audit committee, joint venture participation, transactions and arrangements with related organizations, tax-exempt bond compliance, financial assistance, billing and collection, emergency care, business expense reimbursement, gift acceptance, the rebuttable presumption of reasonableness and the public inspection of Forms 990, 1023 and 990-T.
- Consider Unrelated Business Income. If an organization has unrelated business income, then it must file a separate Form 990-T to report the income and pay applicable income taxes. Each year, organizations should evaluate whether any changes in activities have occurred that would produce unrelated business income.
- Identify Related Organizations. Many of the questions on Form 990 and its schedules are designed to include information about related organizations. Therefore, organizations must be aware of their related organizations and understand when related organization information needs to be provided.