Nonprofit Law Basics: Does a Nonprofit File Tax Returns? What is a 990?
Most nonprofit organizations are required to file annual reporting returns with the IRS. Even though tax-exempt nonprofit organizations do not pay federal taxes (that is what “tax-exempt” means), most do have to file an informational return with the IRS. This annual reporting return is called a Form 990.
What is the IRS Form 990?
The IRS Form 990 is the reporting form that many federally tax-exempt organizations must file with the IRS each year. This form allows the IRS and the general public to evaluate a nonprofit’s operations; it includes information on the nonprofit’s mission, programs, and finances.
The type of Form 990 to be filed by an organization depends on the filing year and the gross receipts of the organization. The different forms include Forms 990, 990-EZ and 990-N.
Who files the IRS Form 990? Which Form 990 do we file?
Most federally tax-exempt organizations (with some exceptions like churches and state institutions) file a 990. All 501(c)(3) private foundations file a 990.
The IRS has a helpful chart available that can guide you in determining which form to file.
- Larger nonprofits with gross receipts of more than $50,000 file Form 990 or 990-EZ
- Smaller nonprofits with gross receipts of less than $50,000 file Form 990-N (e-Postcard)
- Private foundations file Form 990-PF
- Learn more here to see which forms to file.
What nonprofits are exempt from filing IRS Form 990s?
Not all nonprofits have to file annual returns. Generally, the following do not have to file Form 990:
- Most faith-based organizations, religious schools, missions or missionary organizations
- Subsidiaries of other nonprofits – those that may be covered under a group return filed by the parent organization
- Many government corporations
- State institutions that provide essential services.
Click here to see a list of types of nonprofits that do not need to file tax returns each year.
When is the IRS Form 990 due?
Your organization’s Form 990 is due on the 15th day of the 5th month after the end of the organization’s taxable year. This means that if your organization follows the calendar year (January 1 – December 31), your Form 990 would be due on May 15th of each year.
What happens if our nonprofit does not file IRS Form 990?
If an organization fails to file Form 990 three years in a row, the IRS will automatically revoke its tax-exempt status. In 2011, more than 275,000 nonprofits across the country automatically lost their tax-exempt status for this reason. (Learn more about it here: You’ve Automatically Lost 501(c)(3) Tax-Exemption Status – Now What?)
The IRS has no appeal process for automatic revocations due to failure to file an appropriate Form 990 for three years. And without this status, your organization could be subject to paying income taxes. Additionally, you can avoid paying user fees and filing additional documents with the IRS by submitting your Form 990 each and every year.
Can IRS Form 990 be seen by the public?
Yes. Nonprofit organizations are required to make their IRS Form 990 and their exemption application available for public inspection during regular business hours.
What Does It Mean for a Nonprofit to Lose Tax-Exempt Status? by Mollie Cullinane
I.R.S. List of Nonprofits: Automatic Revocation of Exemption List
Need help with your nonprofit’s 990? The Cullinane Law Group works exclusively with nonprofits. We set up new nonprofits. We maintain legally compliant nonprofits. We provide risk management and offer practical solutions for sound governance. We help nonprofits, foundations, religious organizations, and social entrepreneurs throughout the United States who seek to create positive change. Founded by Texas nonprofit attorney Mollie Wettstein Cullinane. Based in Austin, Texas. Clients nationwide.