What’s the Big Deal About 990-N?

The non-profit world is all up in arms over the May 17th filing deadline and the 990-N. News stories abound trying to convince all non-profits, regardless of the size, to be sure that they have filed their 990 (in whatever variety is most appropriate). There are estimates that ¼ of all non-profits in the US will loose their exempt status because of missing this deadline, the majority of which are the small tax exempt organizations who are only required to file a 990-N. That means nearly 400,000 nonprofits have not filed a 990 for the past three years, and are not expected to file a 990 this year. Under the 2006 law – failure to file a 990 for 3 consecutive years will automatically terminate tax exempt status.

So – what happened? Nothing.

Yet. The IRS commissioner, Doug Shulman, released a statement saying that despite an “unprecedented outreach effort” (for those of you with gross receipts<$25,000 annually, you should have received a postcard from the IRS reminding you to file your 990-N), that it still seems that “many of these smaller organizations are just now learning of the May 17th deadline.”

If you find that you are one of these organizations, or you know someone working for an organization that should have filed a 990-N, what should you do? According to Mr. Shulman – “go ahead and file.” He does not say that you will be exempt from having to pay any penalties incurred for filing late, but he does indicate that the IRS is looking at how to proceed and will issue further guidance in the “near future.” 

Katie Thomas, CPA

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