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Beginning in 2008, small tax-exempt organizations that previously were not required to file returns may be required to file an annual electronic notice. The name of the required notice is IRS Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required To File Form 990 or 990-EZ.
With the enactment of the Pension Protection Act of 2006, the majority of small tax-exempt organizations are now required to submit the e-Postcard. In the past, tax-exempt organizations with gross receipts of $25,000 or less did not have to submit information returns. The first e-Postcards are due in calendar year 2008. The IRS intends to have an option available for free electronic submission of the e-Postcard.
The e-Postcard requires small organizations to provide a legal name and mailing address, any other names used, a Web address if one exists, the name and address of a principal officer and a statement confirming the organization's annual gross receipts are normally $25,000 or less.
Exceptions to this requirement include:
- Organizations that are included in a group return.
- Private foundations required to file Form 990-PF.
- Section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ.
- Churches, their integrated auxiliaries, and conventions or associations of churches.
The IRS has started mailing educational letters to small tax-exempt organizations notifying them that they may be required to file the e-Postcard.
The Pension Protection Act requires the IRS to revoke the tax-exempt status of any organization that fails to meet its annual filing requirement for three consecutive years. Therefore, according to the IRS, organizations that do not file the e-Postcard, or an information return Form 990 or 990-EZ for three consecutive years, will have their tax-exempt status revoked as of the filing due date of the third year.
An organization that wants to regain its exempt status will then have to reapply for recognition as a tax-exempt organization. Contact your tax adviser for more information.
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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