Wednesday, May 11, 2016

Tax Season Remains Open For Many Tax Exempt Organizations

Although the filing deadline for individuals has passed, tax season isn’t over just yet. Monday, May 16, 2016, marks the filing deadline for many tax-exempt organizations.

Information returns for tax-exempt organizations (called the 990-series) are due on the 15th day of the fifth month after the close of the tax year. When the 15th falls on a holiday or Saturday or Sunday, the date moves ahead to the next business day. In 2016, May 15, the traditional due date for tax-exempt organizations with a calendar year end falls on a Sunday: those organizations have until May 16, 2016, to file for the 2015 tax year.

This deadline used to apply only to organizations with significant receipts and/or assets but that changed in 2006. The Pension Protection Act of 2006 made it mandatory for most tax-exempt organizations to file an annual information return or notice with the IRS regardless of how much (or little) income the organization receives. Failure to do so for three consecutive years will result in an automatic loss of tax-exempt status unless exempted from filing requirements (for example, churches and certain church-related organizations are not required to file annual reports).

The normal filing requirements are as follows:
You will not receive a confirmation e-mail that the form 990-N has been filed. However, you can check the status of your filing by going to the form 990-N site and logging in. Click over to “Manage Form 990-N Submission” and you should see the status for your organization, including whether your form was accepted or rejected. If your submission was rejected, click on the “Submission ID” link for more information.

If you need more time to file any of the form 990-series other than the form 990-N, you can obtain an extension. There is no extension available for the form 990-N (e-Postcard) but there is also no penalty if you file the form 990-N late. Remember, however, failure to file any of the form 990 series (990, 990-EZ or 990-N) for three consecutive years will result in an automatic loss of tax-exempt status. If that happens, your organization will not be eligible to receive tax-deductible contributions and your organization will have to file for reinstatement – even if the organization was not originally required to file an application for exemption. Reinstatement can be time consuming and expensive.

Some folks, including tax professionals, who are still not familiar with the updated rules are advising small organizations that they don’t have to file if their receipts are minimal. This is not true. You must file unless otherwise exempt.

Remember that forms 990, 990-EZ and form 990-PF must be made available for public inspection (that’s likely why the NFL opted out of status). Information on the form 990-N is also available to the public via the Exempt Organizations Select Check tool on the IRS website. That means that you should not include Social Security Numbers (SSNs) of officers, donors, clients or other individuals on the series 990 forms.

If you have questions or require assistance, be sure to check with your tax professional.