Diann, a homeschool leader on MO emailed me several questions about filing for 501(c)(3) status. Her group incorporated as a nonprofit corporation in November 2011, almost two years ago, but have not filed any forms with the IRS.
My reply to her email, I wrote:
If you apply for 501c3 status soon (with in 27 months of your incorporation date, so by Feb 2014), the IRS will back date your tax exempt status to your date of incorporation. Yeah! So then you would not need to file Form 1120 Corporate (For-Profit) Income Tax Return or pay taxes for those back years.
So your board needs to decide ASAP what you will do regarding 501c3 status! You’ve used up almost all of your 27 months.
If you decide to pursue 501c3 status, you should be filing the 990/990EZ/990N now, even while you work on applying and wait for the IRS to grant you 501c3 status.
You’re late for 2011 and maybe 2012 on filing the 990Ns. That’s two strikes. Three strikes and your (implied) tax exempt status will be revoked, even before you apply! (the IRS lets a group go three years without filing a 990; then they revoke tax exempt status)
I’ve been helping several groups like yours that became incorporated a few years back, but never filed any forms like the 1120 or 990N. This is causing a lot of confusion and problems because the IRS is revoking their tax exempt status (even back to dates before they applied!) and the groups are having to pay corporate income tax.
It’s delaying their tax exempt status too.
It’s a mess…
So my advice: if you like Diann’s group became incorporated a few years ago, start filing your 990/990EZ or 990N now, even if you’re not prepared to file for 501c3 status yet.
Not sure which form to file? It depends on your gross income. If your gross income (that’s all your income, even if it goes right back out again) is under $50,000 a year then you file the Form 990N. Here’s how.
Need help filing the longer 990 or 990EZ? I can help.
Carol Topp, CPA