Reinstatement of Exempt Status

In the past 5 years, many organizations had their tax exempt status revoked for non-filing of their annual information returns. 

The IRS recently issued Revenue Procedure 2014-11, 2014-3 I.R.B. 411 (the “Revenue Procedure”) providing procedures for reinstating the tax-exempt status of organizations that have had their tax-exempt status automatically revoked under section 6033(j) of the Internal Revenue Code for failure to file required annual returns or notices for three consecutive years. The Revenue Procedure modifies and supersedes Notice 2011-44, 2011-25 I.R.B. 883 (the “Notice”).

In general, the Notice permitted certain organizations to request reinstatement of its tax-exempt status effective from the date of the organization’s automatic revocation (“retroactive reinstatement”) if the organization filed its application for reinstatement of tax-exempt status within 15 months of the revocation and proved reasonable cause for failing to file the required annual return or notice in each of the three consecutive years and over the entire consecutive three-year period. The Revenue Procedure liberalizes the criteria for requesting retroactive reinstatement for an organization that (i) was eligible to file Form 990-EZ or Form 990-N for each of the three consecutive years it failed to file, (ii) has not previously had its tax-exempt status automatically revoked pursuant to section 6033(j), and (iii) files its application for reinstatement within 15 months of the revocation and pays the applicable user fee. Under the Revenue Procedure, such organizations will be deemed to have reasonable cause for its failures to file Form 990-EZ or Form 990-N, as applicable, for each of the three consecutive years and will be retroactively reinstated upon the IRS’s approval of such organization’s application for reinstatement.

The Revenue Procedure can be read in full here.

IRS Releases Revised Form 990 Instructions

The 2013 Forms 990 and 990-EZ, schedules and instructions have been revised to modify and clarify certain reporting requirements. A chart summarizing some of the more significant changes to the Form 990, Form 990-EZ, schedules and instructions for tax year 2013 may be accessed by clicking here.

990 Filing Threshholds for TY-2010

• Organizations with gross receipts normally < $50,000 must file Form 990-N (but may choose to file a complete Form 990 or Form 990-EZ). Formerly < $25,000. 
• Organizations with gross receipts > $50,000 and < $200,000 and total assets < $500,000 must file Form 990-EZ or a complete Form 990. 
• Organizations with gross receipts < $200,000 or total assets < $500,000 must file Form 990. 
• As always, private foundations must file Form 990-PF.

Relief for Non-Filing Small Tax Exempt Organizations

Tax-exempt organizations that fail to satisfy annual filing requirements for three consecutive years automatically lose their tax-exempt status. The IRS is providing one-time relief that will allow small exempt organizations to come back into compliance and retain their tax-exempt status even though they failed to file for three consecutive years. If an organization loses its exemption, it will have to reapply to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.

This one-time relief benefits Form 990-N (e-Postcard) and Form 990-EZ filers only. Organizations required to file Form 990 or Form 990-PF are not eligible and are automatically revoked if they fail to file for three consecutive years. Click here.

Videos on New 990 - Application Fee Increase

990 Video Series IRS Exempt Organizations has launched a new case study and video program to help exempt organizations and their tax preparers better understand the newly revised Form 990 series which must be filed for the 2008 tax year. The case study includes a set of facts describing organizational and financial aspects of a hypothetical exempt organization, and a completed Form 990 based on those facts. A video series walks you through key reporting issues common to most organizations required to file Form 990.
User fees will increase for all applications for exemption (Forms 1023, 1024, and 1028) postmarked after January 3, 2010:

• $400 for organizations whose gross receipts are $10,000 or less annually over a 4-year period
• $850 for organizations whose gross receipts exceed $10,000 annually over a 4-year period
• $3,000 for group exemption letters.

A complete schedule of all user fees will be published in the annual procedure released in January 2010.
Cyber Assistant, a Web-based software program designed to help 501(c)(3) applicants prepare a complete and accurate Form 1023 application, will become available during 2010. Once the IRS announces the availability of Cyber Assistant, the user fees will change again:

• $200 for organizations using Cyber Assistant (regardless of size) to prepare their Form 1023
• $850 for all other organizations not using Cyber Assistant (regardless of size) to prepare their Form 1023.

IRS will announce when Cyber Assistant is available and the effective date of the user fee change. Subscribe to the EO Update to automatically receive an alert that Cyber Assistant is available.

990 and Church Tax Inquiries

1. Form 990 Filing Tips and FAQs: Related Organizations
The IRS is providing a series of filing tips and FAQs to help Form 990 filers file a complete and accurate return. Today's Form 990 tips and FAQs address questions pertaining to Form 990 reporting of arrangements between a filing organization and related entities. Schedule R is used to report information regarding related organizations and certain unrelated partnerships. Today's tips also address general reporting requirements for group returns.
2. Proposed Regulations Clarifying Procedures for Authorizing Church Tax Inquiries
The IRS and Department of Treasury have issued proposed regulations under IRC Section 7611 to clarify the procedures for authorizing church tax inquiries and examinations. The proposed regulations replace references to positions that were abolished under the IRS Restructuring and Reform Act with references that are consistent with the statute and IRS's current organizational structure. Written or electronic comments and requests for a public hearing must be received by November 3, 2009.

990 Resources

Links to resources on the new Form 990 for tax year 2008 are available on my website, www.ahereford.org. Continuing updates will be made as resources become available.

Final 2008 Form 990

The IRS issued an updated version of Form 990, the return that charities and other tax-exempt organizations are required to file annually, and provided transition relief so that small exempt organizations will have time to adjust to the new form.

990 Online

July 21, 2006

The Urban Institute 2100 M Street NW Washington, DC 20037 (866) 518-3874
990 Online is a Web-based system available to nonprofit organizations for the preparation of Forms 990, 990-EZ and 8868 (filing extension). The application provides user-friendly screens with comprehensive error-checking, and easy creation of schedules and attachments. Users can create Acrobat PDF copies of their forms and attachments for printing, posting on the Web, or emailing. The application supports current versions of Internet Explorer (Ver. 6 or higher), Netscape Navigator, Mozilla & Firefox (Windows, MacIntosh, or Linux). In 2005, state registration and renewal capabilities will be added. Electronic receipts and acknowledgements are provided, and best of all...the service is free!
These products have been developed by the nonprofit National Center for Charitable Statistics at the Urban Institute to help nonprofit organizations complete accurate and timely tax filings and to strengthen the information resources available on the nonprofit sector. For more information or to get started on your organization's tax return or extension request, please visit us on the Web at http://efile.form990.org.