Form 990 Deadline is May 17

May 12, 2010

May 17 is an important day for many nonprofits. Many nonprofits (primarily small organizations) will lose their tax-exempt status on May 17 because they failed to file annual returns with the IRS (http://www.irs.gov/charities/article/0,,id=217087,00.html).

The Pension Protection Act of 2006 requires the IRS to revoke the federal tax exemption of any organization that has failed to file three consecutive annual returns (Form 990-N, 990-EZ, 990, or 990-PF). Nonprofits that wish to have their exemptions reinstated will be required to re-apply to the IRS for tax-exempt status. This process can take several months.

The IRS will begin revoking exemptions on May 17, 2010, but will wait until 2011 to send revocation notices. A large number of these organizations are smaller nonprofits that previously were not required to file an annual return because their gross revenues were $25,000 or less. These nonprofits now must file Form 990-N, which the IRS created in response to the Pension Protection Act.

While May 17 should not be a concern to many ECFA members, we are aware of some members over the $25,000 annual revenue threshold that have received IRS notices in the last few weeks. The recipients have been charities that have been classified as a church or under the 51% missionary classification—both exempt from filing Form 990. If your organization received a notice regarding the May 17, 2010 filing deadline and you do not believe you should have received the notice, we urge you to consult with tax counsel to determine the appropriate action.

Source: IRS

This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.