Form 990-N is an IRS form which serves as an annual notice for small tax-exempt organizations in lieu of filing Form 990-EZ or Form 990-N.
Form 990-N is not available as a paper form; it can only be filed electronically.
Recently the IRS has announced a transition. Beginning February 29, 2016, the Form 990-N should be filled out and submitted through the IRS.gov website, rather than through the Urban Institute’s website. Prior to February 29, 2016, the Urban Institute provided the official free online filing of Form 990-N. The IRS has noted that some bugs in the new system are possible, so it urges organizations to file at the Urban Institute’s website by February 28, 2016. It is evident that even the government has little confidence in its ability to implement a relatively simple website.
Beginning February 29, 2016, to electronically submit Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990EZ, use the Form 990-N Electronic Filing system (e-Postcard).
- All organizations are required to register at IRS.gov prior to filing Form 990-N. You won’t be asked to register again the next time you file.
- Form 990-N must be completed and filed electronically. There is no paper form.
- Form 990-N filers may choose to file a complete Form 990 or Form 990-EZ instead.
If you are concerned about using the IRS e-file feature, never fear–private industry has stepped in to help nonprofits submit their Form 990-N with a minimum of inconvenience. The following services offer free or low-cost submissions of Form 990-N:
www.file990.org $39.95
www.aplos.com Free if filed before the due date.
www.expresstaxexempt.com Advertised as free for current year.
WARNING: Filing a Form 990-N online is a simple matter and anyone can do it. However, filing Form 990-EZ or Form 990 online, or through a low-priced online service provider is NOT recommended. These forms require considerable expertise and should be prepared by an expert CPA or Enrolled Agent with specific training and experience in nonprofit tax law. The largest part of my practice is fixing returns that were prepared for free or low-cost by preparers who knew just enough to be dangerous. IRS penalties for improperly prepared return start at $20 per day, and the IRS may not notify an organization of a problem with the return for more than a year after it was filed. Twenty dollars per day X 365 days is $7,300. It adds up fast.
Other fun facts about Form 990-N:
- Form 990-N is not considered a “return.” It is an electronic “notice.”
- Form 990-N is not “filed”; it is “submitted.” These distinctions are important.
- Generally an organization may be eligible to submit Form 990-N if it normally has annual gross receipts of $50,000 or less.
- The Form 990-N is due four and one-half months after the organization’s year end. That’s May 15th for an organization that uses the calendar year for its annual accounting period.
- There are no extensions of time to file available, however there is no monetary penalty for submitting Form 990-N after the due date.
- Failure to either submit Form 990-N, or to file Form 990-EZ, or Form 990 for three consecutive years results in the automatic revocation of the organization’s tax-exempt status.
- An organization eligible to submit Form 990-N may instead choose to file Form 990-EZ or Form 990-N.
Compliance tip:
An organization should appoint more than one board member to keep track of the filing due dates and to make sure the 990-N is submitted on time. Assigning the entire responsibility to the treasurer or to a third party preparer is a BIG mistake.
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