Form 990 is required by the IRS of most nonprofit organizations as a requirement of being classified as able to receive tax-deductible contributions. Its purposes include a review of the finances, legitimacy of the uses of funds donated for charitable purposes, organizational leadership, and a report of the activities and functions of the organization. The Form 990 is of interest to the IRS in enforcing the tax code, and to the public who can read it online as a means of evaluating finances and programs.
As with most tax forms, the Form 990 has the potential to be confusing, and in 2016 the IRS reported that a third of paper forms submitted contained errors. For organizations on a calendar tax year the reporting deadline is May 15th, and for those with other tax dates the reporting deadline is the 15th day of the 5th month following. According to the IRS nearly 1/3 of all Form 990s submitted on paper contained errors. The IRS has made changes to many of the fields on the form and encourages the use of online submission to avoid follow-up contact from the IRS.
If you are a newly established nonprofit you must file even though you may not have received your IRS determination letter. You must file using one of three forms depending on your revenue. Some organizations, but not all, can request a six-month extensions organization’s reporting deadline. Failure to submit Form 990 can result in financial penalties and ultimately revocation of nonprofit status. Further, many states require that a copy of the Form 990 be submitted to them as well.
Nonprofit Support Services is dedicated to helping organizations focus on their service mission by ensuring accurate, complete, and timely completion of the Form 990. Visit our website for more information or give us a call at 888-835-0877 for a free consultation.