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New IRS Filing Requirements for Non-Profits

Important information regarding New Annual Electronic Filing Requirement for Small Non-Profits

New Annual Electronic Filing Requirement for Small Non-Profits

Beginning in 2008, small tax-exempt organizations that previously were not required to file returns may be required to file an annual electronic notice, Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required To File Form 990 or 990-EZ. This filing requirement applies to tax periods beginning after December 31, 2006.

Organizations that do not file the notice will lose their tax-exempt status.

Small tax-exempt organizations, whose gross receipts are normally $25,000 or less, are not required to file Form 990, Return of Organization Exempt From Income Tax, or Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. With the enactment of the Pension Protection Act of 2006 (PPA), these small tax-exempt organizations will now be required to file electronically Form 990-N, also known as the e-Postcard, with the IRS annually. Exceptions to this requirement include organizations that are included in a group return, private foundations required to file Form 990-PF, and section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ.

In addition, this filing requirement does not apply to churches, their integrated auxiliaries, and conventions or associations of churches.

The IRS will mail educational letters starting in July 2007 notifying small tax-exempt organizations that they may be required to file the e-Postcard. The IRS is developing an electronic filing system (there will be no paper form) for the e-Postcard and will publicize filing procedures when the system is completed and ready for use.

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, organizations that do not file the e-Postcard (Form 990-N), 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.

For More Information regarding this new requirement contact Fanger & Adelman LLC at 216-479-6820 or by email at fangerlaw.com or go to the IRS link below.

Frequently Asked Questions Regarding the New Electronic Filing Notice.pdf

Click the above link to view and/or download questions and answers provided by the IRS regarding the new electronic filing notice. This two page document is helpful for answering many of the most common questions regarding this new requirement.

For More Information regarding this or other non-profit legal issues contact Fanger & Adelman LLC at 216-479-6820 or by email at fangerlaw.com or go to the IRS link below.

OTHER RECENT DEVELOPMENTS OF INTEREST TO NON-PROFITS

Draft Redesigned Form 990

The IRS has prepared a draft of the proposed new 990 form for review and public comment. The new form is scheduled to go into effect in 2008. If you wish to learn more about the form or comment to the IRS on the proposed changes additional contact information can be found by going to the above link.

For More Information regarding this or other non-profit legal issues contact Fanger & Adelman LLC at 216-479-6820 or by email at fangerlaw.com or go to the IRS link below.

E-File Options and Information for Charities and Non-Profits

The IRS encourages efiling but businesses, individuals as well as Charities and Non-Profits. The above link will provide basic information about e-filing specifically for Charities and Non-profits that file 990s.

For More Information regarding this or other non-profit legal issues contact Fanger & Adelman LLC at 216-479-6820 or by email at fangerlaw.com or go to the IRS link below.

Political Activites by Non-Profits

Click on the above link to download or view this 13 page pdf document. Many non-profits are confused about what they can and can not due with respect to political activity and their charitable status. The IRS has developed a 13 page document that provides examples of 21 situations that non-profits can use to better understand the boundaries of political activity and what could put their charitable status in jeapardy. This is a complex area of the law and our office strongly urges any non-profit engaging in political activity to seek the advice of an attorney before engaging in that activity.

For More Information regarding this or other non-profit legal issues contact Fanger & Adelman LLC at 216-479-6820 or by email at fangerlaw.com or go to the IRS link below.

For additional general Non-Profit information or for more information about any of the above topics go to the IRS Website at: www.irs.gov/charities/index.html


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