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Final Rules on Electronic Annual Return for Small Tax-Exempt Organizations
Late last month the Internal Revenue Service issued final regulations on the annual return filing requirements for certain small tax-exempt organizations. Organizations having gross receipts of less than $25,000, which had previously been exempt from any filing requirement, are now required to file electronically on the new Form 990-N (“e-Postcard”), unless they choose to file the more detailed Forms 990 or 990-EZ.
A primary purpose of the Form 990 family of returns is to ensure that the IRS and the public have current information about tax-exempt organizations. Previously, however, most tax-exempt organizations (other than private foundations) with gross receipts of less than $25,000 were not required to file an information return. With certain exceptions (e.g., religious or apostolic organizations and organizations included in a group return), most smaller tax-exempts must now file.
Form 990-N (or e-Postcard)
The e-Postcard is due every year by the 15th day of the 5th month after the close of the organization’s tax year—May 15 of the following year for calendar year organizations.
There is no paper form for the e-Postcard. It must be completed and filed electronically at http://epostcard.form990.org. The following information about the organization is necessary to complete the e-Postcard:
- Employer Identification Number (EIN), or Taxpayer Identification Number (TIN)
- Tax year
- Legal name and mailing address
- Any other name(s) the organization uses
- Name and address of a principal officer
- Organization’s web site address (if applicable)
- Confirmation that the organization’s annual gross receipts are normally $25,000 or less
If an organization misses its e-Postcard deadline, the IRS will send a reminder notice, but will not assess any penalties for late filings. If an organization fails to file required e-Postcards (or Form 990 or 990-EZ) for three consecutive years, it will automatically lose its tax-exempt status, revocation to take effect after the filing due date of the third year. Additionally, submission of the e-Postcard does not constitute the filing of a return that starts the period of limitations for assessment under Internal Revenue Code § 6501(g)(2).
Some small organizations may not use Form 990-N
Some organizations are not eligible for the e-Postcard filing regime:
- Tax-exempt organizations with annual gross receipts that are normally greater than $25,000 must file Form 990 or Form 990-EZ.
- Private foundations must file Form 990-PF.
- Section 509(a)(3) supporting organizations are required to file Form 990 or Form 990-EZ.
- Section 527 (political) organizations required to file an annual exempt organization return must file Form 990 or Form 990-EZ.
In addition, as noted above, an organization that is eligible to file on Form 990-N may choose to file on Form 990 or Form 990-EZ instead.
Questions regarding this advisory should be addressed to Howard J. Barnet (212-238-8606, email@example.com), Jerome J. Caulfield (212-238-8809, firstname.lastname@example.org), Dan Pittman (212-238-8854, email@example.com) or Jinsoo J. Ro (212-238-8833, firstname.lastname@example.org).
Carter Ledyard & Milburn LLP uses Client Advisories to inform clients and other interested parties of noteworthy issues, decisions and legislation which may affect them or their businesses. A Client Advisory does not constitute legal advice or an opinion. This document was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
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