There's a 990 Deadline Coming Up!

*Ahem* Attention! Calling all procrasti-- uh… deadline extenders!

We know this may fall on some deaf ears as we just called on the attention of those of you who filed for not one, but two 3-month extensions of time to file your tax return, but here’s a heads up: the LAST day for organizations with their fiscal year as the calendar year to file their 990 form is in exactly one month, November 15.

Okay, it’s not exactly one month away; November 15 is on a Sunday this year so your last day to file is technically the 16th. Either way this is your month warning that you’ve got a deadline coming up. And if you’re supposed to be doing that 990 long form, you might really want to pay attention to that.

So here are some things to keep in mind as you go into your last month to prepare your tax-exempt organization’s return:

• Form 8868 cannot be used to extend the due date of Form 990-N (ePostcard). But, don’t fret: you can e-file this form at any time during the year without penalty (just don’t go three years without doing so - you’ll lose your tax-exempt status). And with Express990, you can still file your 2014 Form 990-N ePostcard for free!
• The last extended filing deadline is in ONE month, on November 16.
• Only Part I of Form 8868 automatically extended your deadline for filing, and it did so for 3 months. If you didn’t file Part II or if your Form 8868 Part II was rejected for the non-automatic 3-month extension of time, you might have only had one 3-month extension. You can contact the IRS Tax Exempt Hotline about penalties and instructions for filing late, (877) 829-5500.
• The last extended filing deadline, November 16, is in ONE month!
• If you have any questions or run into any bumps in your e-filing process while you’re filing your 990 form, the Express990 support team is here for you. You can reach us by phone, Monday - Friday, from 9 a.m. - 6 p.m. EST at (803) 514-5155 or by email 24/7 at support@expresstaxexempt.com.
• November 16, the last extended filing deadline, is in ONE month!!

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Things To Know: Gift Acceptance Policy

In the perfect non-profit world all financial support would be either cash or liquid donation and free of any donor imposed restrictions. No matter the reason for the donor to give, you can count on donors to impose restrictions to test your comfort zone as an organization. 

Whether a proposed gift is in the form of cash or property, restricted or unrestricted, the having a gift acceptance policy can help you evaluate the gift and the impact that it will have on the organization. Having a gift acceptance policy will describe the nature and types of gifts that you are willing accept, with taking into consideration your organization size and the resources you have to administer the gift. Most important it will take into consideration the various risks associated with ownership of the property.

What may be a treasure in the heart of the donor may not be such a treasure in your organization's eyes or the open market, when it may have to be liquidated. That liquidation may take in inordinate amount of time and a drain on the organization resources.

This situation can create added administrative costs as well sour the relationship between you and the donor, particularly if this is not adequately planned. Thus the need to have ta Gift Acceptance Policy in place with mitigate these issues and ensure clear expectations and understanding is communicated to both parties.

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What Does It Mean: Failure To Meet A Public Support Test

Sometimes your curiosity gets the best of you and you want to know the answer to this question: What does it mean if an organization failed the "public support test"?

It's reasonable enough to ask but when you search for this answer an insane amount of information is thrown up on your screen. The Express990 team wants to save you a bit of time and some vision by just putting all your answers in this convienient, yet informative blog..

These are the answers you have been searching for...

Here is an interesting tidbit, I bet many non-profits did not know, the default rule is that all 501(c)(3) organizations are private foundations unless they qualify as a public charities. Which is mean, unless your organization passes the "public support test" you are otherwise classified and governed as a private foundation. And private foundations are subject to more restrictions and have to pay taxes on investment income. Thus qualifying as a "public" charity is very beneficial.

There are two tests that an organization can use to determine if they pass the "public support test"; donative charity test and gross receipts charity test.

The donative charity text stipulates that a charity must normally receive at least 1/3 of its total income from government grants, grants from other public charities, and from members of the public. A caveat is that there is a 2% limit on the amount of funding from any one donor, foundation, or corporate funder that can be counted toward the total.

The gross receipts charity test to see if it normally receives at least 1/3 of its total income from government, grants from other public charities, from members of the public, or from revenues generated by activities within the organization's exempt purpose. The caveat is that this test places a limit on the amount of investment income that the organization can earn. The organization cannot have not more than 1/3 of its total income can derive from investment income.

These test are review year after year. If you meet the public charity test in 2013 tax year, you will be classified a charity for the 2013 and 2014 tax years. However, if you do not pass the public support test in 2013, your organization will be classified as a private foundation for tax year 2013. If you believe that the classification of a private foundation should not be applicable to you, then you should the IRS.

Before you go to share this wealth of knowledge with the world, I just wanted to add this little smidgen (it's a word ;) of information in here for good measure. If you need to file your Form 990-N or 990-EZ and the thought of all that paperwork makes you sick to your stomach, Express990.com provides e-filing of these forms. The entire process is much more simple to get through and understand. If you have any questions, do not hesitate to contact our amazing support team. 

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Qualifying for Public Charity Status

Most officers' of publicly-supported organization have questions about their organizations' public charity status. It can be complicated at first, but the Express990 Team has a few tricks to make it a bit easier. Obtaining public charity status is important to understand as well as how to maintain it. To avoid possible loss of public charity, it is important to monitor your organization's financial support. Here are a few helpful ways to check if your organization qualifies as a public charity:

Identifying Current Status

To check your current status with the IRS, you can visit their EO Select Check page. You can also check to make sure your status hasn't been revoked by going to the IRS Automatic Revocation of Exemption List. It's a lot of links right off the bat, but trust me, it is sometimes much easier to check on your status through the IRS web page then having to call them directly. 

Public Charity Status

Public charity status is only applicable to 501(c)(3) organizations. To receive this status you would have filed a Form 1023. For more information on receiving 501(c)(3) status check out my blog - How Does An Organization Receive 501(c)(3) Status?

Public Support Test
The public support test is basically a fraction. It is the sum of the organization's public support during the five year period over the sum of the organization total support during the five-year period. In simple words, the organization must have at least 33 and 1/3 public support to qualify as publicly supported.

Supporting Organization
Public support is classified as a gift, grants and contributions from government and public sources; gifts, grants and contributions from private sources, such as individuals, businesses and private foundation; government contracts to provide a service or maintain a facility for the benefit of the general public; qualified sponsorship payment; and membership fees for the organization general support.

Let's Sum It Up
As long as organization receives more than 33 and third percent of it support from the items listed above, they will be considered a public charity. Don't forget you can always check your status on the IRS EO Select Check page and you can make sure your status hasn't been revoked through the IRS revocation list - linked above.  

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The 990-N App

The right app to file your 990-N is all you need to simplify tax filing for nonprofit organizations. Express990 provides you that perfect app to file your 990-N from any location, at any time. No, my nonprofit friend, this is no dream. The 990-N App truly exists and is available to download right now, for free on Google Play & iTunes App Store!

What is the difference between Form 990 and the 990-N?
The 990-N is a greatly shortened version of the From 990. Another main difference between the two is who can use the 990-N vs. Form 990. The 990-N is used by small tax-exempt organizations that gross in receipts of $50,000 or less in a year and is only available to be filed electronically. This is actually very convenient for easy filing on the go; not to mention a greener alternative to the old school paper option - go Earth!

When is the deadline to file the 990-N for my organization?
This is how the IRS explains the 990-N deadline - The deadline is on the 15th day of the 5th month after the last day of your tax year. Not the clearest definition to define a date right away, but here is an example of how to figure it out:

Ex. If your tax year ended December 31st, your 990-N will be due by May 15th of the following year.

To be absolutely, beyond a shadow of a doubt sure of when you 990-N deadline is, consult a financial advisor/accountant. You wouldn't want to put your exempt status in jeopardy because you didn't file on the correct due date for your fiscal year.

If you have questions give the Express990 team a call. We are located in beautiful Rock Hill, SC and you can reach us via phone: 704.839.2321 or through our 24/7 email support: support@expresstaxexempt.com.

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Reminder: Don't Include SSN on Form 990-EZ

Despite multiple warning from the IRS, an estimated 20% of tax-exempt organization still include private information, such as Social Security numbers, of their principal officers on their Forms 990. This can prove to be disastrous to both the organization and the officers involved. From harassing phone calls to identity theft, giving out sensitive information poses a big problem. Make sure you’re checking all of your schedules so that nothing is included that shouldn't be.

Since the 990-EZ is a public document, organizations are cautioned against including Social Security numbers when filing. Social Security numbers may accidentally listed when giving information on principal officers or key employees. Ensuring private information stays private is essential to protecting your officers and instilling confidence to your donors. After all, their information may be posted publicly as well.

Don’t be a part of the 20%. Keep your organization in the clear and easily take care of your 990 filing needs by filing with Express990.com.

If you have any questions pertaining to filing Forms 990, don't hesitate to call the Express990 Support team via phone: 704.839.2321 or email: support@expresstaxexempt.com. 

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IRS Form 990 Deadline Today

The IRS deadlines keep on spinning. If your nonprofit organization falls under the Feb 1, 2013- Jan 31, 2014 tax period, then your IRS Form 990 is due TODAY! Don't worry, you can gain more time with a Form 8868 extension, Express990.com has got your covered. But first let's go over your options of the 990 series so you know exactly what to file.

Form 990-N is for smaller nonprofits with $50,000 or less in gross receipts. The 990-N is called and e-postcard and only takes a few minutes (if that) to complete and transmit to the IRS. You need to have some business information ready to go including: EIN, legal name & address, different names the organizations uses (if any), website (if any), name and address of Principal Officer, confirmation of $50,000 or less in gross receipts, and a statement the organization is going out of business (if applicable).

Form 990 is used by most organizations exempt from income tax under section 501(a). If your nonprofit has gross receipts greater than or equal to  $200,000 or total assets greater than or equal to $500,000 at the end of the tax year, the the Form 990 is for you. You can always extend your deadline with Form 8868, and we will be getting to that in just a moment.

Form 990-EZ is used by tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations to provide the IRS with the information required by section 6033. This form is for those exempt organizations with gross receipts less than $200,000 or total assets less than $500,00. You also have to option to extend the filing deadline for this return with Form 8868.

Form 990-PF is used to figure the tax based on investment income, and to report charitable distributions and activities. This form also serves as a substitute for section 4947(a)(1) nonexempt charitable trust's income tax return, Form 1041, U.S. Income Tax Return for Estates & Trusts, when the trust has no taxable income. Like the previous two 990 forms, the deadline to file Form 990-PF can also be extended with Form 8868.

Extending your deadline with Form 8868.
First things first, you can not use Form 8868 to extend the filing deadline of Form 990-N (e-postcard). But for the other forms in the 990 series, you have the option to extend your deadline. Express990.com provides Form 8868 "Application for Extension of Time to File an Exempt Organization Return" that can give you an automatic 3-month extension to file your Form 990, 990-EZ, 990-PF. Learn more...

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990 News: Revenue Procedure 2014 - 11

Revenue Procedure 2014-11 is a publication by the IRS outlining the process for gaining retroactive reinstatement for exempt organizations. Should an organization fail to file a Form 990 (and any form from the 990 series) for three consecutive years, its tax-exempt status is automatically revoked. This can mean big fines, penalties, and taxes. Thankfully, the IRS has created this process for first-time offenders.

There are three options for tax-exempt organizations to regain their exempt status and have it retroactively reinstated; we will discuss each individually. The first two are applicable only to those organizations who have had their exempt status revoked no more than 15 months prior to reapplying.

An organization that was eligible to file either Form 990-EZ or 990-N for each of the three consecutive years that it failed to file, and that has not previously had its tax-exempt status automatically revoked, may apply to have its tax-exempt status retroactively reinstated effective from the Revocation Date if it does both of the following:

1. Completes and submits an Application at the address provided in the instructions to the Application not later than 15 months after the later of the date of the Revocation Letter of the date on which the IRS posted the organization’s name on the Revocation List. To help facilitate processing, organizations should write “Revenue Procedure 2014-11, Streamlined Retroactive Reinstatement” on the top of the Application.
2. Include the appropriate user fee with the Application. 

An organization that is not eligible for the aforementioned procedure may apply to have its tax-exempt status retroactively reinstated effective from the Revocation Date if it does all of the following:

1. Completes and submits the appropriate Application to the address provided in the instructions to the Application not later than 15 months after the later of the date of the Revocation Letter or the date on which the IRS posted the organizations name on the Revocation List. To help facilitate processing, organizations should write “Revenue Procedure 2014-11, Retroactive Reinstatement” on top of the Application.
2. Includes the appropriate user fee with the Application
3. Includes the Reasonable Cause Statement
4. Includes a statement with the Application confirming that it has filed the Annual Returns required in the below step
5. Files properly completed and executed paper Annual Returns for all taxable years in the consecutive three-year period for which the organization was required, and failed, to file Annual Returns (and for any other taxable years after such period and before the Post-Mark Date for which required returns were due and not filed). The Annual Returns must be mailed to the follow address:

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201-0027

For those organizations beyond the 15-month mark, the IRS has another method for regaining reinstatement that requires a bit more work. An organization that applies for reinstatement of its tax-exempt status more than 15 months from the later of the date of the Revocation Letter or the date on which the IRS posted the organization’s name on the Revocation List may have its tax-exempt status retroactively reinstated effective from the Revocation Date only if it satisfies all the requirements of the aforementioned section, and except that it must provide the Reasonable Cause Statement for all three years instead of just one.

As you can see, the process is very in-depth but well worth the effort. We recommend it to any organization that needs to be reinstated and wishes to have retroactive exempt status as well. Make sure that you have all of your information before attempting to file for reinstatement. Contact the IRS to ensure that you have all the necessary documentation and have taken all of the necessary steps for filing.

Life Cycle of an Exempt Organization

With things changing so quickly, it’s hard to pin down exactly what stage your organization is in. Luckily the IRS has narrowed the process down into 5 steps, or the “Life Cycle” of your exempt organization. All tax documents relating to exempt organizations are written to fit into these 5 stages:

1. Starting Out: Creating an organization under state law, acquiring an employer identification number, and identifying the appropriate federal tax classification

2. Applying for Exemption: Acquiring, completing, and submitting application forms; how the IRS processes applications; and getting help from the IRS during the application process

3. Required Filings: Annual exempt organization returns, unrelated business income tax filings, and other returns and reports that an organization may have to file

4. Ongoing Compliance: How an organization can avoid jeopardizing its tax-exempt status, disclosure requirements, employment taxes, and other ongoing compliance issues

5. Significant Events: Audits, private letter rulings, and termination procedures

Somewhere within these 5 stages is where your organization falls with the IRS, and Express990 is here to help make sorting through the chaos a little bit easier. Our free 990-N service helps smaller organizations remain compliant at no cost to them. We also provide the chance to extend your filing deadline with Form 8868, so you can get a little breathing room between you and that pesky 990 deadline. We've designed our site for the everyday taxpayer, not the tax professional, so you can file your forms quickly and get back to doing what you love.

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IRS 990 Webinar Recap

On May 29th, the IRS covered a variety of issues on the Forms 990-N and 990-EZ. Over the hour-long session, the two-person panel discussed topics such as the purpose of the 990 series, who needs to file, common errors found on the forms, the advantages of e-filing, what should go on the forms, suggestions to make the filing process a little less tedious, and how to achieve reinstatement if your organization’s tax-exempt status has been revoked. The overview was in-depth and very educational. Since it was moderated by two IRS officials, CE (Continuing Education) credit was offered for professionals. The presentation lasted approximately an hour, spanning from 2 PM to 3 PM EST, and consisted of a slideshow and voiceover analyses by the two moderators. And yes, we actually stayed awake for the whole thing. 

The Breakdown:
The IRS maintains that the 990 series is not simply a “tax form,” but is also to provide information to the general public and interested contributors. Since it’s a public document, any organization may file the Form 990 and is required to do so if it is hoping to achieve tax-exempt status. Even those organizations that have applied for exempt status but have not been accepted are required to file. Be warned, everything you put on the Form 990 is available to the public and the IRS strongly discourages organizations from putting personal information on the document. Despite these warnings, some 20% of organizations still submit 990s containing Social Security numbers.

While it may seem long, compared to the Form 990, the Form 990-EZ is relatively short: just 4 pages compared to the 12-page document that is the Form 990. Even still, the task of completing the form can be daunting and the IRS recommends making it a group effort to ease the stress for everyone involved. Have those employees that best understand each section of the 990-EZ work on it individually and then combine the sections and complete any necessary schedules. For example, your events manager may know more about the fundraising dinner you had last week than the public relations manager. Alternatively, the public relations manager may be able to better describe the purpose of your organization better than your accounts payable manager. No matter the case, the filing process will become less and less of a headache when the burden of collecting information is shared. It’s the classic Scooby-Doo approach!

Speaking of filing, the IRS recommends that all organizations e-file, even if they are not required to. An astounding 24% of Forms 990 paper filed with the IRS contain errors, while only 1% of e-filed forms contain errors. This fact alone should be enough to convince any organization to switch but if it isn’t, consider this: the fines for filing incorrect or incomplete forms are equal to the fines for filing late, a hefty penalty to pay without a doubt. E-filing, and especially e-filing with Express990, can save you not only money, but time as well. Our software helps calculate certain expenses and revenues, so there’s no punching calculator buttons or worrying about human error.

The most important topic covered was the Revenue Procedure 2014-11 discussion. This IRS publication discloses valuable information on retroactive reinstatement, meaning that organizations that have had their exempt status revoked may be able to be get it back without owing any taxes. The webinar mentioned three particular situations covered by the Rev. Proc. 2014-11, but many more apply. They also discussed different factors for “reasonable cause”; reasons why the organization had not filed a Form 990 or had been delinquent in filing for several years. Keep in mind, though, that these options apply predominantly to those organizations that are “first-time offenders.” If your organization has previously lost its tax-exempt status, it may not be able to access this reinstatement process.

In Conclusion,
The webinar was helpful and informative. We enjoyed listening and watching it, and we hope this blog was useful for you. We covered the main areas of the panel discussion, but there’s a lot more out there. You can access the information for yourself on the IRS website or read up on some more interesting facts on our FAQs page. There are some big things coming to Form 990 filing and we’re excited about them! There will be a second webinar on June 19th for UBI (Unrelated Business Income). We will be attending and writing a summary for it as well. Stay tuned for more blogs and discussions!

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