Not-for-Profit Organization Form 990 Compliance

Despite being exempt from paying federal taxes, most not-for-profit organizations (including charitable nonprofits) must file a Form 990 (Return of Organization Exempt from Income Tax Form) with the IRS each year. 

As experts in the preparation and filing of Form 990 returns and supporting schedules, our CPA firm's skilled tax professionals serve as a vital tax compliance resource for the management, officers and financial authorities for not-for-profit organizations throughout the U.S. 

About Form 990 Returns

Form 990 returns are the IRS’s key instrument for attaining a complete and accurate overview of a tax-exempt organization's activities, governance and detailed financial information. Form 990 returns are also used by government agencies to prevent organizations from abusing their tax-exempt status.

Each Form 990 return must include a combination of detailed financial information and information on the not-for-profit organization’s mission, programs, and use of finances. A non-for-profit organization that does not file annual returns or notices for three consecutive years will have its tax-exempt status revoked as of the due date of the third return or notice. An organization's tax-exempt status may be reinstated if it can show reasonable cause for the years of non-filing.

Below are general guidelines regarding the organizations that must file a Form 990 return.

Not-for-Profit Organizations that have to file an annual Form 990 return:

• All private foundations, regardless of income. 
• Most tax-exempt organizations with gross receipts of $200,000 or assets worth $500,000.
• Larger nonprofits that have gross receipts of more than $50,000. 
• Small nonprofits with gross receipts of $50,000 or less (Form 990-N). 
• Organizations that are tax-exempt under Sections 501(c), 527, or 4947(a)(1) of the U.S. tax code, and that do not fall into the exemptions listed below. 

Not-for-Profit Organizations That Are Exempt from Filing a Form 990 return:

• Churches and most faith-based organizations such as religious schools, missions, or missionary organizations.  The criteria for being classified as a church are listed in the Tax Guide for Churches and Religious Organizations (IRS Publication 1828).
• Subsidiaries of other nonprofits, where there may be a group return filed by the parent group.
• State institutions. Some state institutions are exempt because they provide essential services (a university is such an institution).
• Government corporations.

Annual filing of a Form 990 return entails the collection and reporting of a great deal information about a not-for-profit organization, which must be professionally organized into the Form 990 and supporting schedules for filing with the IRS. 

Certain non-for-profit organizations have more comprehensive reporting requirements than others. In addition to filing a Form 990, organizations often must file additional schedules to supplement, clarify and more fully support compliance of disclosures made in the Form 990 return.  In these instances, working with an experienced BAS Accounting Services tax professional will help your organization to more fully support these needs.

Another important fact about Form 990 returns is that, subsequent to filing a Form 990, portions of the return become public record, accessible to the general public including donors, association members, vendors, contractors, and other authorities. The information disclosed in the return must be accurate, transparent and complete. Misleading or inaccurate information within the return could lead to IRS penalties as well as jail time. The IRS takes Form 990 returns very seriously as a means of knowing almost everything about a tax-exempt organization. 

How we can help

At BAS Accounting Services, your organization’s Form 990 filing needs are well supported, from the start of your engagement through completing the proper preparation and filing of your organization’s Form 990 return. Throughout the process we work to guide your organization through the collection and delivery of your organization’s financial statements and information about the organization’s mission and programs in an effort to minimize the necessary work load and the preparation and filing the organization’s Form 990 return.