What’s a 990-N?
Since 2010, the IRS has required all nonprofit organizations file an annual information return. (all means all nonprofits, 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).
When is the 990-N due?
The Form 990-N is due 4 1/2 months after the end of your fiscal year, so May 15 for groups that run on a calendar year.
What does the Form 990-N ask?
The Form 990-N is very simple. It is only 6 questions. No financial information is given.
A. Calendar year or tax year dates
B. Check if gross receipts are $50,000 or less
C. Name and address of organization
D. Employer Identification Number (EIN)
F. Officer name and address
How do I file the Form 990-N?
It is filed online at the IRS.gov website IRS.gov/990N
We’re not a 501(c)(3)yet. Do we still need to file the Form 990-N?
Yes, you do. Start filing the Form 990-N even before you file for 501(c)(3) tax exempt status. File a 990-N even if you are a self declared 501(c)(3) social club.
File the Form 990-N even if you are exempt from applying for tax exempt status because your annual gross revenues are under $5,000 or because your are a self-declaring 501(c)(7) Social club (like most homeschool support groups).
Read more about tax exempt status for support groups here: Homeschool Groups As Social Clubs
Since you have not applied for 501(c)(3) status, you are not in the IRS database, 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.
What happens if I file the 990-N late?
The IRS will send you a reminder notice if you do not file your 990-N on time, but the IRS does not assess a penalty for late filing.
What happens if I fail to file the Form 990-N for three consecutive years?
If you fail to file for three consecutive tax years, you will lose your tax exempt status. This will occur on the filing due date of the third year. If you lose your tax exempt status, you must reapply for tax exempt status. This means filing the Form 1023, the new shorter 1023-EZ or 1024. (I can help with that. Contact me) and paying the IRS filing fees. You may owe taxes for the period when you were not tax exempt.
The IRS requires that all organizations who lose their tax exempt status file the Form 1023/1023-EZ/1024 even if they were exempt from filing the form before.
That means doing the paperwork and paying the IRS filing fee ($275 , $400 or $850).
We’ve never filed any forms with the IRS. Why now?
Before 2006, small nonprofits with annual gross receipts under $25,000 did not have to make any yearly filings with the IRS. But in 2006, Congress and the IRS introduced a new form, the 990-N. The IRS needed to clean out their database of nonprofit organizations, many who had old addresses or were closed. The Form 990-N keeps the IRS and donors up-to-date on tax exempt status of small organizations.
Will we owe back taxes or penalties?
There may be a period of time when your organization was not tax exempt. The IRS may expect you to pay income tax for that period. (I can help with filing your tax returns. Contact me) Fortunately, the IRS is not assessing penalties for late filing of Form 990-N.
I have never heard of this before and now I think we’re in trouble! What should I do?
1. Stay calm. Everything will be OK.
2. Read my blog posts on Form 990N.
3. Discuss the situation with your board.
4. Consider arranging a phone call with me, Carol Topp, CPA to discuss the next step and your options. Contact me
I hope that helps!
Carol Topp, CPA