Form 990-N - An Overview

Every nonprofit that obtained tax-exempt status from the IRS is required to file a 990 Form to report details regarding their finances, activities, and more. While there are different variants of Form 990 available, the IRS has specifically introduced Form 990-N (e-postcard) for small nonprofits.

Criteria For Filing 990-N (e-Postcard)

The requirement for filing 990-N depends upon the organization’s gross receipts. Any nonprofit whose gross receipts are less than or equal to $50,000 can file Form 990-N. If the gross receipts are higher than the specified amount, the organization should choose and file the appropriate 990 form
(990-EZ or 990)

Also, it’s important to note that the nonprofits that are eligible to file Form 990-N can voluntarily choose to file 990-EZ or 990 Form, but not vice-versa.

Note: Private foundations must always file Form 990-PF even if their gross receipts are less than or equal to $50,000.

Deadline For Filing 990-N (e-Postcard)

As per the IRS, the organization must file its 990-N return on or before the 15th day of the 5th month, just after the close of the tax year. This means nonprofits that follow the calendar tax year must file 990-N on or before May 15.

Now once the e-postcard has been filed, IRS will send a notification stating whether it has rejected or accepted the form. If it is rejected, there will be instructions on what needs to be done next.

Automatic Revocation of Tax Exempt Status

Failing to file 990 returns may have certain consequences for nonprofits. If the organization fails to file a 990-N within the deadline, the IRS will send a reminder. Though there are no penalties for Form 990-N (unlike the other 990 forms), failing to file 990-N for three consecutive years will result in automatic revocation. This means the organization’s tax-exempt status will be revoked, and they will need to pay income taxes. This is why it’s important for small nonprofits to file 990-N on time every year.

Reinstating Exempt Status

It is not the end of the road if the organization loses its tax-exempt status. They can still reinstate the tax-exempt status by filing the IRS Form 1023 again and paying the required filing fee.

However, it’s recommended that you file your 990-N on time rather than going through the reinstatement process. Assisting you in this is e-postcard 990-N who will ensure that you never delay or make errors in your filing.

Filing 990-N Form (e-Postcard)

E-filing your Form 990-N becomes easier than ever with epostcard990n.com. You can complete and transmit your 990-N in 3 simple steps and get instant updates regarding the IRS status of your forms. Also, if your 990-N gets rejected by the IRS for any errors, you can fix them and retransmit the return for free.

Revocation of Tax Exempt Status

If nonprofits avoid e-filing the 990-N form, then they may have to bear serious outcomes and can even lead to losing the tax exemption status. Thousands of nonprofits have lost their tax-exempt status because they forgot to file 990-N.

If you fail to file for a single year, IRS will send a reminder, but if you end up failing to file for three consecutive tax years, then you will end up losing your tax-exempt status.

Now, this revocation will happen automatically and henceforth IRS won’t send any notices. If the tax-exempt status is revoked, then it means the organization is no longer eligible for federal tax exemption and cannot promise their donors that their donation will be tax deductible.

Reinstating Exempt Status

It is not the end of the road if you lose your tax-exempt status. You can still re-apply for federal tax exemption. So, it means that you need to file IRS Form 1023 again and even pay a hefty filing fee. Now, this is something that you really need to avoid as you will again need to go over the unnecessary paperwork, giving you a headache.

Frankly, it is better if you continue filing your 990-N forms each year and be in compliant with the IRS rules and regulation. Assisting you in this is e-postcard 990-N who will ensure that you never delay or make errors in your filing.