Non-Profits

IRS Announces Significant Changes to 990 Return

Before you begin preparing tax exempt client returns, make sure you educate yourself on the revisions. The IRS announced that significant changes to the forms 990 and 990-EZ for 2013 returns. For a quick glance at the changes, view a summary chart prepared
by the IRS

Non-Profit Organizations Filing Requirements 

The Pension Protection Act of 2006 provides for new filing requirements affecting small nonprofit organizations. The requirements are as follows:

  1. If an affiliate normally has gross receipts of $25,000 or less (described by the IRS as small organizations), the new law requires them to file a new form; Form 990-N, Electronic Notice for Tax-Exempt Organizations not Required to File Form 990 or Form 990-EZ. Under the old law, small organizations had no IRS filing requirement.
  2. The filing requirement applies to tax periods beginning after December 31, 2006. Small organizations with a year ending December 31, 2007 or after will be required to comply with the new law.
  3. The IRS is developing an electronic filing system to accommodate the new form. For the latest information, go to www.irs.gov/eo. Paper forms and filings will not be available or acceptable. Form 990-N will be due May 15, 2008.
  4. The information required to be submitted to the IRS will be very basic and limited to items such as; the organization's current address, website, employer identification number, the name and address of a principal officer and a statement that the organization's annual gross receipts are normally under $25,000.
  5. If an affiliate's gross receipts exceed $25,000 but are less than $100,000 they should continue to file Form 990-EHZ. If the gross receipts exceed $100,000, they should continue to file Form 990. 

Form 990 Redesign for Tax Year 2008 (Filed in 2009) 

On December 20, 2007, the IRS released a redesigned Form 990, Return of Organization Exempt from Income Tax, for tax year 2008 (to be filed in 2009 and later years). The new form incorporates comments and suggestions from the over 650 e-mails and letters received during the comment period, which closed on September 14, 2007.

The redesign of Form 990 is based on three guiding principles: enhancing transparency, promoting tax compliance, and minimizing the burden on the filing organization.

Visit the IRS Website to learn more.