January 11, 2012

As many of you know, the deadline for filing Form 990 (or Forms 990-EZ or 990-N) by nonprofit organizations is four and a half months after year-end. For calendar year organizations, these returns were due May 17, 2010. What you may not know is that this is the first year in which an organization could lose its tax exempt status due to non-filing.

The Pension Protection Act of 2006 included provisions that would revoke an organization’s  tax-exempt status if it failed to file some version of the Form 990 series for three consecutive years.  Because the non-filing years could not, by statute, start any earlier than with the 2007 form, a calendar-year organization that did not file any returns for calendar years 2007, 2008, and 2009 automatically lost its tax exempt status earlier this week.

However, IRS Commissioner Douglas Shulman recently issued a statement urging non-filers, and small nonprofits ($25,000 or less in average receipts) in particular, to file returns anyway, even though the deadline has passed. Mr. Shulman also indicated that the IRS will be providing guidance to organizations who have not filed in three years and that the IRS will do what it can to help them avoid losing tax-exempt status.

Small organizations can file the 990-N (generally referred to as the e-Postcard) through a link on the IRS website.

Full text of Commissioner Shulman’s Statement

If you have any questions, please contact us.

This article was originally posted on January 11, 2012 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at marketing@grfcpa.com.