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Are we exempt from filing Form 990?

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Are we exempt from filing Form 990?

Our nonprofit tax-exempt organization has been operating well under the $25,000 annual revenue threshold that I understand exempts our group from the requirement to file a Form 990 tax information return with the IRS. I believe I recently read that that exclusion no longer applies. Can you summarize the present requirements for filing a return?

You are partially correct. You are not required to file the Form 990 or 990-EZ for smaller organizations, but you are required to file the new Form 990-N. Organizations exempt under any subsection of Section 501(c) that would be required to file a Form 990 but for the $25,000 threshold are now required to file the much simpler “electronic postcard” Form 990-N. There is no fine for failing to do so, but failure to do so for three years will cause the IRS to revoke your exempt status. (For more details, see Ready Reference Page: “Small Nonprofits Must File E-Postcard to Retain Exemption.”)

Saturday, March 19, 2011

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