Internal Revenue Service Reporting
It needs to be established right up front in this coverage of meeting the reporting requirements of the IRS that per strict interpretation of regulations, the only AVOs that do not have to file something annually are: churches are integrated auxiliaries, conventions and associations of churches and AVOs that are part of larger organizations that file group IRS returns. All other AVOs no matter their size or whether they have applied for tax-exempt status or not by IRS regulations must submit an annual filing.
In order to complete the annual filing an AVO must have a Tax ID Number. Technically, this is called an Employer Identification Number (EIN) but don't let the word Employer throw you as the AVO needs the EIN in spite of by definition having no employees. This is what the IRS and other government bodies use as the unique identification number for the AVO. If one needs to be obtained, the process to do so is covered in the Obtaining a Tax ID Number for an AVO section of this resource.
AVOs that have not Filed for Tax-Exempt Status: As covered in the Applying to the IRS for Tax-Exempt Status section of this resource, charitable (per the IRS) AVOs that do not normally take in more than $5,000 in annual gross receipts do not have to formally apply and pay a fee for obtaining tax-exempt status; these AVOs are automatically deemed exempt until such time as they exceed the $5,000 limit. However, even though an AVO has not needed to file an application to be tax exempt, it is still, by the letter of the law, required to file annually with the IRS. So, please bear in main that the next discussion of filing an e-Postcard version of IRS form 990-N applies to AVOs even if they have never applied for tax-exempt status.
The IRS 990 Tax Return: AVOs whose annual gross receipts are normally $50,000 or less have the advantage of satisfying the annual IRS filing requirement by doing it online through what is called an e-Postcard. The e-Postcard is actually the IRS form 990-N. IRS form 990 is the annual tax return that must be filed by nonprofits analogous to the IRS form 1040 that is filed annually by individuals. There are three versions of the 990: long form 990 itself that complex and/or large nonprofits must use; 990-EZ that is a four-page return that smaller nonprofits without complex transactions can use; and the 990-N that really is as simple as it gets for small nonprofits (that would include most all AVOs) where only a few question need to answered online. Therefore, this resource will focus on the e-Postcard filing.
Due Date of the e-Postcard: The e-Postcard must be completed online by the 15th of the fifth month after the end of the fiscal (tax) year of the AVO. For example, if the AVO ends its year on June year on December 31, then the e-Postcard needs to be filed by May 15 of the following year. However, for example, if the AVO ends its year on June 30, then the e-Postcard needs to be filed by November 15 of that same year. The IRS is very flexible, to a certain point, with regard to late filings; there is a penalty. However, if an AVO fails to submit its annual filings for three consecutive years, it loses its tax exempt status. The consequences of this are burdensome (filing back-dated corporate tax returns, etc.) and expensive (paying taxes as if the nonprofit were operating as a business).
Information to be submitted on the e-Postcard: There are only eight pieces of information that must be entered on the e-Postcard:
1.The Employer Identification Number (EIN) of the AVO
2.The tax year for which the filing is being made
3.The official legal name of the AVO and its mailing address
4.Any unofficial names the AVO uses
5.The name and address of the principal officer (usually the president)
6.If the AVO has a Web site, the address must be provided
7.Confirmation that the AVO had $50,000 or less in gross receipts for the tax year
8.Notification if the AVO intends to go out of business
It is that simple. The e-Postcard, of course, has to be filed online. If for some reason the AVO cannot, or chooses not, to file online it can complete the four-page 990-EZ form which would be more burdensome, but manageable. Links to resources available from the IRS are provided below:
IRS Telephone Number (toll-free) to call for AVOs that have not applied for Tax Exemption (Under $5,000 gross receipts) to set up e-Postcard filing: Customer Account Services: 1-877-829-5500
Link to the Urban Institute with which the IRS has contracted to process form 990-N; click here when you have the information and are ready to file the e-Postcard