Introduction to Form 990
The Form 990 is an annual information return that most tax-exempt organizations, including charities and foundations, must file with the IRS. The form provides the public with financial information about the organization, including income, expenses, and governance practices.
The purpose of the Form 990 is to ensure transparency and accountability within the non-profit sector, and to help the IRS monitor compliance with tax laws and regulations.
Who Must File Form 990?
Most tax-exempt organizations, including public charities, private foundations, and other types of non-profits, are required to file Form 990. This includes organizations with annual gross receipts of $200,000 or more, and those with total assets of $500,000 or more.
However, some organizations, such as churches and certain government entities, are exempt from filing Form 990. It's essential to review the IRS guidelines to determine if your organization is required to file the form.
Form 990 Filing Requirements
The Form 990 requires organizations to report on their financial activities, governance practices, and compliance with tax laws and regulations. The form includes sections on income, expenses, assets, liabilities, and fundraising activities.
Organizations must also disclose information about their board of directors, executive compensation, and any related-party transactions. The form must be signed by an authorized officer of the organization, and must be filed electronically with the IRS.
Form 990 Deadlines
The deadline for filing Form 990 is the 15th day of the 5th month after the close of the organization's tax year. For example, if an organization's tax year ends on December 31, the Form 990 deadline would be May 15 of the following year.
Organizations can request an automatic 6-month extension of time to file by submitting Form 8868 to the IRS. However, this extension does not extend the time for paying any tax that may be due.
Consequences of Not Filing Form 990
Failure to file Form 990 can result in significant penalties, including fines and loss of tax-exempt status. The IRS may impose a penalty of $20 per day, up to a maximum of $10,000, for late filing.
In addition, the IRS may revoke an organization's tax-exempt status if it fails to file Form 990 for three consecutive years. This can have serious consequences, including loss of donor confidence and reduced fundraising ability.
Frequently Asked Questions
What is the purpose of Form 990?
The purpose of Form 990 is to provide the public with financial information about tax-exempt organizations and to help the IRS monitor compliance with tax laws and regulations.
Who is required to file Form 990?
Most tax-exempt organizations, including public charities and private foundations, are required to file Form 990 if they have annual gross receipts of $200,000 or more, or total assets of $500,000 or more.
What is the deadline for filing Form 990?
The deadline for filing Form 990 is the 15th day of the 5th month after the close of the organization's tax year.
Can I request an extension to file Form 990?
Yes, organizations can request an automatic 6-month extension of time to file by submitting Form 8868 to the IRS.
What are the consequences of not filing Form 990?
Failure to file Form 990 can result in significant penalties, including fines and loss of tax-exempt status.
How do I file Form 990?
Form 990 must be filed electronically with the IRS. Organizations can use tax software or consult with a tax professional to ensure accurate and timely filing.