The US Internal Revenue Service on Monday announced the launch of a simple electronic filing system that small tax-exempt organizations may use to comply with a new law requiring them to file an annual return.
In the past, small tax-exempt organizations were generally not required to file Forms 990 or 990-EZ, the annual information returns for tax-exempt organizations.
However, the Pension Protection Act of 2006 requires that tax-exempt organizations that normally have annual gross receipts of USD25,000 or less must file an electronic Form 990-N, "Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required to File Form 990- or 990-EZ," for tax years beginning in 2007.
The Form 990-N is required under the new law to be filed electronically.
"Filing Form 990-N electronically will help make this process easier for tax-exempt organizations," explained Richard Spires, IRS Deputy Commissioner for Operations Support.
He continued: "Like our other e-file options, this process is fast and reduces the chance for making errors."
Filing the e-Postcard is free and easy, according to the IRS. To file, small tax-exempt organizations will need only a few basic pieces of information: the organization’s employer identification number, its tax year, legal name and mailing address, any other names used, an Internet address if one exists, the name and address of a principal officer and a statement confirming that the organization's annual gross receipts are normally USD25,000 or less.
"The information on the form, which will be available to the public, will help ensure that potential donors have the basic information they need about the organization," stated Lois G. Lerner, the director of the IRS’ Exempt Organizations Division.
The due date for filing Form 990-N is the 15th day of the fifth month after the close of the tax year.
The new law provides that organizations that do not file Form 990-N for three consecutive years will lose their tax-exempt status.
“Because this new filing requirement is a big change for small tax-exempt organizations, we have made a special effort to reach out and work with the tax-exempt community to let affected organizations know about it,” Lerner added.
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