Form 990 information returns for many due MAY 17 — or else
If you’re a tax-exempt organization (OTHER THAN a church or a church-related organization), heads up. The IRS is undertaking an outreach effort to remind you that your tax-exempt status may be automatically revoked if you haven’t filed your Form 990-series information returns for the last couple of years. Failure to file those forms for three consecutive years results in the automatic loss of tax-exempt status.
The forms are due on the 15th day of the fifth month after the organization’s fiscal year ends – which makes the next due date Monday, May 17, 2010 for organizations which use the calendar year as their fiscal year. (Note again: this does NOT apply to churches and other church-related organizations.) So tax-exempt organizations which (a) have failed to file their Form 990s for the last two years and (b) use the calendar year as their fiscal year would be well-advised to get their 990s in by May 17. Otherwise, their tax-exempt status goes away automatically as of the due date of the third missed filing – thereby possibly subjecting them to (gasp) federal tax liability as well as a boatload of other potential hassles (not the least of which would be having to re-apply for tax-exempt status).
The Form 990 requirement has been in effect since 2007. It appears, however, that many tax-exempt organizations may have failed to take note of the obligation. The annual return for 2009 – which is due to be filed now, in 2010 – marks the first time that the “three strikes” rule could come into play. That rule was imposed by Congress (in the Pension Protection Act of 2006), so the IRS has no choice in the matter: Congress told the IRS that after three missed filings, the tax-exempt status goes away, and that’s that. The IRS, presumably not wanting to be the Bad Guy in all this, has issued its reminder (including podcasts in English and Spanish) to try to get the word out.
There are various flavors of Form 990. The proper one to be filed by any particular organization depends on a number of factors (including, e.g., level of annual receipts). According to the IRS, the simplest version (Form 990-N (e-Postcard) calls for only a “few basic pieces of information”. Organizations that have any doubt as to which form applies to them should consult with tax counsel – and for sure do that before May 17.
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