Small nonprofits must file the 990-N e-postcard today!
SPECIAL ALERT: The IRS has released the names of 1,764 Hawaii nonprofits that missed the May 17 deadline to file a Form 990 or a simple e-postcard. If your nonprofit is on the 54-page list, your tax-exemption is about to be revoked.
However, it is not too late to act. The IRS has announced that it has extended the deadline for the e-postcard through Oct. 15 and that it is instituting a voluntary compliance program for nonprofits with budgets under $500,000 to let them file Form 990-EZ by Oct. 15 with a $100-$500 one-time compliance fee without losing tax-exempt status.
Don't lose your tax-exempt status. File now – it's easy. If your nonprofit received less than $25,000 in gross receipts, it can file the 990-N (e-postcard) electronically, for free. Go to the IRS website to learn what form to file. If your nonprofit does not file by Oct. 15, its tax-exempt status will be revoked.
Will the IRS revoke your nonprofit's tax exemption?
As of May 17, 2010, more than a thousand nonprofits across Hawaii were at risk of losing their tax exemption from the IRS because they had not filed their annual 990 form for three or more years. Under new federal law, the IRS can automatically revoke tax exemption for those nonprofits.
On May 18, the IRS Commissioner released the following statement: “I want to reassure … small organizations that the IRS will do what it can to help them avoid losing their tax-exempt status. The IRS will be providing additional guidance in the near future on how it will help these organizations maintain their important tax-exempt status — even if they missed the May 17 deadline. The guidance will offer relief to these small organizations and provide them with the opportunity to keep their critical tax-exempt status intact. So I urge these organizations to go ahead and file — even though the May 17 deadline has passed.”
Therefore, if you missed the May 17 deadline, go ahead and file your latest annual 990 with the IRS anyway. Refer to the National Council of Nonprofit’s tax exemption filing guide for additional assistance.
What do you do if your organization's tax-exempt status is revoked?
Your organization will have to apply for tax-exempt status all over again before it will be tax-exempt.
Why? If your organization missed the May 17, 2010, deadline to file its annual 990 return with the IRS this year, AND has not filed an annual return for the prior two years, its tax-exempt status will be automatically revoked on May 18, 2010, as a result of the requirements in the Pension Protection Act of 2006. Revocation means that the organization is no longer exempt from federal income taxes.
Is your nonprofit at risk?
As of May 17, 2010 almost 1,800 nonprofits in Hawaii were at risk of losing their tax-exempt status. Will your nonprofit be one of them? We hope not. The Urban Institute’s National Center for Charitable Statistics has developed a simple tool to find out if you need to file. Here’s how in 3 easy steps:
- Go to the NCCS website
- Select the name of your state and then enter your nonprofit’s name.
- If there is an alert “FILE NOW” by your nonprofit’s name, file with the IRS by Oct. 15 or your nonprofit’s tax-exempt status will be automatically revoked. If your nonprofit had revenues less than $25,000 in 2009, file the 990 postcard (990-N), which is a simple, non-financial statement.
And, if your nonprofit is up-to-date but you know another nonprofit that could be at risk, please forward this message. We do not want any active nonprofit to lose its ability to serve Hawaii's communities. So we appreciate your help to spread the word.
