“I run a baby alms that operates a aliment coffer for abandoned bodies in our town. We’ve been about for about 10 years now, and while bodies do occasionally accord us money, we’ve never had added than $25,000 in donations in any accustomed year. I afresh apprehend that we now accept to book an Anniversary Abode with the Internal Revenue Service, and that the borderline has already passed. Yikes! Nobody told us about this. Are we in absolutely hot baptize here?”
The abbreviate acknowledgment is “no,” but you apparently will accept to book the form.
A bit of background: Nonprofit organizations that administer for tax absolution beneath Section 501(c)(3) of the U.S. Internal Revenue Code get two very, actual big tax breaks:
— They do not accept to pay federal taxes (or accompaniment taxes either, if they acquaint their accompaniment tax ascendancy that they accept a federal exemption); and
— The bodies who accord money to the alignment can abstract the donation on their tax returns.
If a 501(c)(3) nonprofit alignment takes in added than $25,000 in donations in a accustomed year, they are appropriate to book an Anniversary Abode anatomy on IRS Anatomy 990 or Anatomy 990-EZ. The all-inclusive majority of nonprofits never ability this beginning amount, though. Also, back abounding baby nonprofits accomplish artlessly application advance staff, and no accountant or bookkeeper is befitting clue of their assets and expenses, alike some nonprofits that booty in added than $25,000 in anniversary donations don’t book the IRS form.
Those canicule of beatific benightedness are now over.
Beginning May 15, 2010, the IRS requires baby tax-exempt organizations with anniversary gross receipts of $25,000 or beneath may be appropriate to electronically abide Anatomy 990-N, additionally accepted as the “e-Postcard,” unless they accept to book a complete Anatomy 990 or Anatomy 990-EZ.
There are some exceptions. The afterward nonprofits allegation not book Anatomy 990-N anniversary year:
— organizations that are included in a accumulation acknowledgment (for example, abounding academy alumni organizations are bankrupt beneath the college’s tax absolution and do not accept an absolution of their own);
— churches, their chip auxiliaries and conventions or associations of churches; and
— organizations that are appropriate to book a altered acknowledgment (such as clandestine foundations, which book Anatomy 990-PF).
The e-Postcard is due every year by the 15th day of the fifth ages afterwards the aing of the organization’s tax year. So, for example, if an organization’s tax year ends Dec. 31, the e-Postcard is due by May 15 of the afterward year. The e-Postcard cannot be filed until afterwards the organization’s tax year ends (so, in the aloft example, filing on Dec. 15 will accept no effect).
Because the IRS did not broadcast this new claim until a brace of canicule afore May 15, 2010, a lot of small-calendar-year nonprofits did not accept abundant time to book the e-Postcard. The acceptable account is that the IRS is acceptance nonprofits to book their e-Postcards backward afterwards penalty.
If an alignment does not book its e-Postcard on time, the IRS will accelerate a admonition notice, but the alignment will not be adjourned a amends for filing the e-Postcard late. However, an alignment that fails to book the appropriate e-Postcards (or added anniversary abode forms) for three afterwards years will automatically lose its tax-exempt cachet able the filing due date of the third year. Not a acceptable thing.
There is no cardboard form: Anatomy 990-N allegation be filed electronically at the afterward Web page: http://epostcard.form990.org. Note that this is not allotment of the IRS website; the cyberbanking filing of e-Postcards is actuality handled by the IRS’ “trusted partner,” the Urban Institute.
When bushing out the e-Postcard, an alignment allegation accommodate the afterward information:
1. The organization’s employer identification number, additionally accepted as a aborigine identification number
2. The organization’s tax year
3. The organization’s acknowledged name and commitment abode
4. Any added names the alignment uses
5. Name and abode of a arch officer
6. Website abode if the alignment has one
7. Confirmation that the organization’s anniversary gross receipts are commonly $25,000 or less)
8. If applicable, a account that the alignment has concluded or is absolute (going out of business).
So, no big deal, right? Just go online, acknowledgment the questions and you’re done? Well, delay a minute.
Before activity online to ample out the e-Postcard, an alignment should analysis with an accountant, CPA or tax adviser to accomplish 100 percent abiding its anniversary gross receipts are $25,000 or less. The e-Postcard is a tax acknowledgment afterwards all, and any account on it is fabricated beneath amends of perjury.
More importantly, baby nonprofits allegation to accomplish 100 percent abiding they abide to authorize for tax exemption. The e-Postcard claim suggests that the IRS will be demography a afterpiece attending at baby nonprofits to accomplish abiding they deserve absolution from federal taxes. If the IRS determines an alignment has not been active up to its accommodating purpose (or, added seriously, has assets from for-profit activities that it hasn’t appear to the IRS), its tax absolution may be lost, and the bodies in allegation will be in a abundance of trouble.
For added admonition about Anatomy 990-N, go to the Internal Revenue Service website at www.irs.gov and blazon “Form 990-N” into the website chase box.
Cliff Ennico ([email protected]) is a amalgamated columnist, columnist and above host of the PBS television alternation “Money Hunt.” This cavalcade is no acting for legal, tax or banking advice, which can be furnished alone by a able able accountant in your state. To acquisition out added about Cliff Ennico and added Creators Syndicate writers and cartoonists, appointment our Web folio at www.creators.com.
COPYRIGHT 2010 CLIFFORD R. ENNICO.
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