Search Results for: 990N

How to get added to the IRS database and file the Form 990N

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Carol,
We’re a newly organized homeschool support group. Is there anything we need to do with the IRS to establish ourselves as a 501c7 social club, or do we just need to get our EIN and start filing the 990N?

Thanks again! I really appreciate your help. 🙂

Melissa

 

After you get your EIN (Employer Identification Number), you won’t be able to file the 990Ns just yet.

Since you have not applied on paper for 501(c)(7) status  (you can “self declare” 501c7 status and don’t have to file the paperwork), you are not in the IRS database (yet), so you need to call the IRS Customer Account Services at 1-877-829-5500 and be added to their database so you can begin filing the Form 990Ns.

It typically takes 6 weeks after you call to be added to the IRS database.

Say something like this,

“We’re a brand new 501c7 Social Club and my CPA said I needed to get added to the IRS exempt organization database, so we could start filing the 990Ns.”


Or if your homeschool group has an educational purpose, you’re most likely a 501c3 tax exempt organization. Read about the difference between 501c7 Social clubs and 501c3 organizations. In that case, you’ll say:

“We’re a brand new 501c3 educational organization and my CPA said I needed to get added to the IRS exempt organization database so we could start filing our 990-Ns.”

**Note that only 501c3 organizations with less than $5,000 annual gross revenues can “self-declare” their tax exempt status. 501c3s with more than $5,000/year in revenues must apply for 501c3 status using Form 1023 or the new, shorter Form 1023-EZ.


They will ask for your EIN and organization’s name, address, and probably a contact name.

They may also ask what date your fiscal year ends. Many support groups operate on a calendar year, but some operate on a school year with a year end of June 30 or July 31. Look at the form you filed when you applied for your EIN to see what you chose as your fiscal year end.

They may ask if you have “organizing documents.” They mean bylaws or Articles of Association (or Articles of Incorporation). So tell them if you have bylaws or Articles of Association/Articles of Incorporation. Samples can be found here.

Finally, if they tell you you must file a Form 1024 to obtain 501(c)(7) tax exempt status, tell them (with confidence) your CPA informed you that you can “self declare” tax exempt status as a social club and do not have to file the Form 1024.

Call the IRS early in the morning. They open at 8 am ET and you can usually get through pretty quickly of you call then, Record the date you call, the IRS employee name and their identification number.

Be sure you go online to file the Form 990N anytime after your fiscal year ends and before its due date which is 4 1/2 months after the end of your fiscal year. So if you operate on a calendar year, the 990N is due May 15.

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File 990N for prior years

Did you miss filing your IRS Annual report, the Form 990N in prior years?

Here are a few online services that let your file prior year 990Ns.

 

990N Providers

 

Here’s a full list of IRS approved providers for the Form 990N.

Do not use these services for your current Form 990N.

The current Form 990N is filed for no charge at http://irs.gov/990n

 

Remember, tax exempt organizations must file the Form 990, 990EZ or 990-N with the IRS every year. Failure to file for 3 consecutive years will mean your tax exempt status will be automatically revoked.

If you believe your tax exempt status was revoked, I can help your organization get reinstated. Contact me.

Carol Topp, CPA

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Can’t we just call the IRS and get on the list to file Form 990Ns?

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My leadership team is freaking out. We are one of those groups in the 990N discussion. We got our EIN in June 2010 and opened a checking account in December 2010. We always have under $5,000 pass through our books every year.

We have never called the IRS to be added to the 990N list because of lack of knowledge. You mentioned at the homeschool convention in Cincinnati fixing this problem by filing 20-some odd-pages to be reinstated.

Since we have never called to be on the list in the first place could it be, I pray, as simple for us to just call and get on the list and start filing the 990N form?

Sorry this has upset your leadership team.

Wouldn’t have been nice if the IRS had made it easier to comply when you learn about the 990N?

But unfortunately, they revoked your status automatically after 3 years of failing to file the Form 990N, even though you never officially applied.

Then to make things worse, the IRS requires you to file the 26 page Form 1023 to get reinstated, even though you never had to file that  application form in the first place (because your gross income is under $5,000/year).

Here’s my flowchart of the process to get tax exempt status reinstated.

This has made a lot of work for the IRS and they were back logged to begin with!

Fortunately, the IRS is considering a Form 1023EZ which is only 2-3 pages and a lot simpler to fill out than the longer 26-page Form 1023. They hope to have the Form 1023EZ ready by the summer of 2014.

But I wouldn’t hold my breath. The IRS has received some negative feedback  about their proposed Form 1023EZ, saying it is too simple! I agree that it does not go far enough in helping the IRS separate legitimate nonprofits from scammers. I doubt the Form 1023EZ will be ready by this summer.

But maybe you can wait until the fall and the IRS might have a Form 1023EZ by then.

I find that each homeschool group is unique. Some have to go though the IRS process, some are within the time frame and can get tax exemption reinstated easily. I do provide a phone consultation to help organizations figure out what is best for them.

Contact me to arrange a phone call and give your leadership team some peace of mind.

Carol Topp, CPA

All nonprofits need to file a 990N every year (or else!)

2009 Form 990

I’ve read your books and really appreciate the information.

When you say you have 27 months from when you file with your state for incorporation as non-profit to file with the IRS, is that only if you want the IRS to grant 501c3 status retroactively to your date of incorporation?

My concern is that I would like to file as a nonprofit with my state so I can get the protection afforded by incorporation but I don’t anticipate seeking 501c3 within the next 27 months and I just need to be sure that is not a deadline to file after becoming a non-profit with the state.

Your clarification is much appreciated.

Tiffany

 

Tiffany,
If you do not file for tax exempt status with in 27 months of the date of your formation (nonprofit incorporation), then the IRS will only date your tax exemption to the date they receive your application, not back to when you were formed.

If you do not have tax exempt status, then you need to be filing a corporate income tax return (Form 1120) and pay corporate income tax on any surplus you have.

If you plan to file for tax exempt status then you should file an annual 990N (the IRS electronic postcard) every year until you tax exempt status is granted.

Lately I have helped several nonprofit clients that formed years ago and were not filing the 990N each year. Now the IRS is making them go back and file corporate income tax returns, even though they have always been nonprofits.

I am now telling ALL nonprofits (even one like yours that is delaying filing for tax exempt status), to PLEASE file the 990N EACH year or it will be unpleasant when you do apply for tax exempt status.

You can call the IRS Customer Account Services at 1-877-829-5500 and be added to their database so you can begin filing the Form 990Ns. It typically takes 6 weeks to be added to the IRS database.

Carol Topp, CPA

Are homeschool groups supposed to file the IRS Form 990N?

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I recently visited your HomeschoolCPA.com site and was a little confused by the chart comparison of a 501c3 and a 501c7. In my research with CPA’s in my area and with talking to the IRS, it appears that the filing requirements have changed. It appears that as of 2006, all organizations must file a 990N postcard including a 501c7. From talking to the IRS a 990N will not be accepted from any organization that has not filled out a 1024 or 1023. Let me know your thoughts on this. Thank you!
Nathalia B

 

Nathalia,

Yes, the IRS does want all nonprofit organizations to file a 990N, but many organizations do not have to file the Form 1023/1024 if they have gross annual revenues under $5,000 (for a 501c3) or are a 501c7 Social Club who can “self declare” tax exempt status without filing a Form 1024.

To further confuse things, the IRS will not have an organization in their system until they file a Form 1023/1024.

An organization that is exempt from filing the Form 1023/1024 (for the two reasons listed above) can call the IRS and be added to the IRS database so they can file the 990N.

You can call the IRS Customer Account Services at 1-877-829-5500 and be added to their database so you can begin filing the Form 990Ns. It typically takes 6 weeks to be added to the IRS database.

Lately, I have helped several homeschool organizations that did not file their 990Ns and are now applying for tax exempt status. They now have to file corporate income tax returns for the years they were not filing the Form 990Ns! It is more paperwork and holding up their tax exempt status.

I hope that helps clarify things a bit!

Carol Topp,CPA

Does the IRS Form 990N apply to my group?

This question was originally posted in April 2009, but the information is still pertinent today.
Hi Carol,
Thanks so much for all your help in getting our Christian Homeschool Network up and running.  Things are going well so far. My husband brought a card he saw at the post office and handed it to me thinking it might apply to our group. The same basic info is on this web site:
http://www.irs.gov/charities/article/0,,id=169250,00.html
It is about a new filing requirement for small tax exempt organizations.Does this apply to us? I was unsure if this was just for 501 C 3 organizations.
Thanks, Carol
Sharon W

Sharon,
The new IRS ePostcard (Form 990N) notification is for all 501(c) organizations. The IRS is trying to clean up its database by using this short electronic postcard. They hope to find any “dead” nonprofits that are no longer in operation. They are also looking for small nonprofits that have “grown up” to the $25,000 (now $50,000) gross revenues per year and should be filing a 990EZ or 990 Form annually.  The ePostcard is a way for small nonprofits to acknowledge that they are still under the $25,000 (now $50,000) annual revenue threshold for filing the 990.

I recommend that you consider 501(c)(3) status ASAP.  The IRS expects educational nonprofits to file for their 501(c)(3) tax exempt status with in 27 months of formation (incorporation as a nonprofit).  Your nonprofit incorporation date was May 27, 2008, so you have until August 2010 to apply.  Otherwise, the IRS requests an explanation of why tax exempt status was not filed earlier and tax exemption is granted to the date of filing, not back to the date of formation.  This could mean that a nonprofit might owe back income tax for the period that they were not tax exempt.

If your gross revenues stay under $5,000 a year, you are granted an exception from filing the paperwork for 501(c)(3) status. If gross revenues get to be over $5,000 a year, your group should file for 501(c)(3) tax exempt status or pay corporate income tax on any surplus (i.e. profit).

In a nutshell, a small nonprofit has four choices:
1. Stay under $5,000 gross revenues per year
2. File for 501(c)(3) tax exempt status
3. Pay corporate income tax on any annual surplus.
4. Find a church or another 501c nonprofit to take you on as one of their ministries.

I hope that helps,

Carol Topp, CPA


Update as of August 2010:

The IRS is now asking all nonprofit organizations to begin filing the Form 990N , even if they have not yet applied for tax exempt status. Here is what the IRS states on their website http://www.irs.gov/charities/article/0,,id=156389,00.html

Tax Law Compliance Before Exempt Status Is Recognized

An organization that claims tax-exempt status under section 501(a), but has not yet received an IRS letter recognizing exempt status, is generally required to file an annual exempt organization return.

The annual return is either Form 990, 990EZ or the new electronic postcard Form 990N.

The difficulty in filing the Form 990N if you have not yet received 501(c)(3) tax exempt status is that your organization is not in the IRS system. You’ll have to call the IRS and get entered into their system before you can file your 990N online.

Carol Topp, CPA

More nonprofits can file the easy Form 990N

2009 Form 990

Many homeschool organizations that have tax exempt status are small enough they do not have to file any tax forms with the IRS. And now new IRS guidelines mean even more groups are free from IRS filing requirements!

Small exempt organizations can file the simple Form 990-N, the electronic postcard, instead of the longer Form 990-EZ or  Form 990.

For tax years beginning on or after January 1, 2010, exempt organizations may file the e-Postcard if their annual gross receipts were not more than $50,000.  The previous filing threshold was annual gross receipts of no more than $25,000. Gross receipts include every dollar your organization brings in, even if it goes out immediately too.

The e-Postcard is an electronic notice filed at http://epostcard.form990.org.

Need help determining your gross receipts? Send me an email and we can arrange a private consultation over the phone. Email me here.

If your tax exempt homeschool organization needs help filing their Form 990EZ or Form 990, I can help. Read more here.

Would your homeschool group benefit from being tax exempt? Find out by reading my articles on the pros and cons of tax exempt status.

Carol Topp, CPA

IRS 990-N down until January 6 2017

The IRS has announced that their Form 990-N, the ePostcard, online filing system will be will be down from December 26, 2016 at 11:59 a.m. until January 6, 2017 at 1:00 p.m. EST due to an annual planned maintenance.

The IRS apologizes for any inconvenience.

The Form 990-N is due 4 1/2 months after the end of your organization’s fiscal year. Many homeschool groups have fiscal years that end on June 30 or July 31, so their 990-Ns were due November 15 and December 15, respectively.


Don’t know what I’m talking about or what an Form 990-N is? Read my 990-N FAQ page.

What’s a 990-N?

Since 2010, the IRS has required all nonprofit organizations file an annual information return. (All means all except churches) The IRS Form 990-N is a simple, online form that all nonprofit organizations with annual gross revenues of less than $50,000 must file every year. That means your homeschool group (unless you are under the ministry of a church).


 

If you are uncertain about your homeschool organizations tax exempt status, please contact me  for a private phone consultation.

My book The IRS and Your Homeschool Organization will also explain your options to become tax exempt and the required reports for tax exempt organizations.

 

 

Carol Topp, CPA

HomeschoolCPA increased my fees, but you’ll get more!

GirlThrowsMoney

I don’t do this often, but I recently increased some of my fees.

My popular phone consultation fee is the same at $60/hour.

My fee preparing the IRS Form 1023-EZ application for 501(c)(3) status for small organizations has increased from $150 to $250.

But starting July 1, 2016 the IRS fee for Form 1023-EZ drops from $400 to $275, so overall your total fee will be less than before. Gotta like that.

Additionally, I used to charge separately for reviewing your Articles of Incorporation  for compliance with the IRS 501(c)(3) rules. Now that will be included in the $250 fee.

And I will also include a letter explaining what your state filing requirements will be for your newly formed 501(c)(3) organization. I used to charge separately for that as well, but it’s now included.

So, your homeschool group can apply for 501(c)(3) status (or get reinstated if your tax exempt status was revoked because you failed to file the annual Form 990-Ns) for less money and get more services!

What’s not to like about that?

Helping homeschool leaders,

 

Carol Topp, CPA

HomeschoolCPA.com

 

 

 

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New website for filing IRS Annual ePostcard Form 990-N

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The Internal Revenue Service (IRS) is changing the website to file the Form 990-N. The Form 990-N used to be hosted by the Urban Institute, but starting February 29, 2016, the IRS will host the Form 990-N submission website.

The new website is www.IRS.gov/990N

The Form 990-N is a short,  annual filing that small (those normally with annual gross receipts up to $50,000) tax-exempt organizations file in place of the lengthier Form 990-EZ or Form 990. In order to file the Form 990-N, all nonprofits will be required to complete a one-time registration and file Form 990-N submissions through the IRS’s website at www.IRS.gov/990N.

Who must file
Most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less can satisfy their annual reporting requirement by electronically submitting Form 990-N if they choose not to file Form 990 or Form 990-EZ instead.

Exceptions to this requirement include:

Form 990-N is easy to complete. You’ll need only eight items of basic information about your organization.