What To Do When You Miss The IRS Form 990 Deadline

We’ve talked about everything 990 related for the last week or so and just like that, the May 15th deadline has come and gone. If you filed your organization’s IRS Form 990 by the Form 990 due date 2017, I am sure you have gladly removed anything 990 related from your ever-growing to-do list. Unfortunately, this isn’t the reality for every organization.

We have received several concerned calls from organizations that failed to file their 990 tax form by the IRS Form 990 deadline. They are all asking what they should do since they missed the Form 990 due date 2017 for tax returns.

We will be honest with you, there aren’t many options for you at this point, but we do have some advice on what to do when you miss the IRS Form 990 deadline.

*Take immediate action before your tax-exempt status is revoked*

What To Do When You Miss The IRS Form 990 Deadline

Long story short, the longer you wait to file the worse off your organization will be. The best advice that we can give you is to file IRS Form 990 ASAP!  Your penalties will only grow the longer you wait to file your 990 tax form...seriously. 

Even though you have [technically] missed the deadline, you can avoid the following IRS penalties if you take action soon. 

Late Filing Penalties

Organizations with gross receipts less than $1,020,000 for its tax year will have a penalty of $20/day for each day that the return is late. The maximum penalty for these organizations is $10,000 or 5 percent of the organization's gross receipts, whichever is less.

Organizations with gross receipts more than $1,020,000 for its tax year will have a penalty of $100/day for up to a maximum of $51,000.

Penalties Against Responsible Person(s):

Were you aware that individuals can be fined on behalf of an organization if the organization does not file during the fixed amount of time it has been given to fulfill its filing requirements? 

Yep! 😳 Organizations that fail to file a completed return or provide proper information will be given a short grace period before penalties apply. Your organization will receive a letter from the IRS stating how long this period will be.

If no action is taken after this time expires, the person responsible for complying will be charged a penalty of $10/day, with a per capita of $5,000 for anyone return.

Filing Form 990 After the Deadline

Filing Form 990 is essential for your organization and should be completed in detail. TaxBandits offers a simplified process and provides all of our clients with informative resources to help you file your 990 nonprofit tax return correctly by following Form 990 instructions. 

Information You Must Have To File

General information needed to e-file IRS Form 990 include:

• EIN (Employer Identification Number)
• Tax Period
• GEN (Group Exemption Number)
• You will also need information to fill out any required schedules for your organization

File The Correct 990

If you spend precious time filing the wrong Form 990 for your organization, I will cry for you.

These are the 990 tax forms included in the Form 990 Series; select the Form 990 that meets the financial status of your organization:

Form 990-N
Organizations with gross receipts that are less than or equal to $50,000 file this form electronically.

Form 990
Filed by organizations with gross receipts more than or equal to $200,000 or total assets equal to or greater than $500,000.

Form 990-EZ
The Short Form Return of Organization Exempt From Income Tax filed by organizations with gross receipts less than $200,000 and $500,000 in total assets.

Form 990-PF
Filed by Exempt & Taxable Private Foundations as well as Non-Exempt Charitable Trusts which the IRS treat as private foundations. 

Automatic Revocation of Tax-Exempt Status

If your organization does not file a Form 990 for three consecutive years, it will be automatically revoked of its tax-exempt status. If the organization does not get reinstated as per the required procedure, it will be required to file with the IRS as a taxable organization.

Avoid Expensive Late Filing Penalties

IRS penalties are quickly accumulating and the longer you wait, the more expensive they will be. So if I were you, I would create a free account with our sister product, TaxBandits, and start filing today. Their filing process consists of a simplified, step-by-step interview-style process without the complex IRS terminology. At TaxBandits we take pride in providing tax-exempt organizations a safe, secure, and efficient e-filing process that will save you time and money.

If you have questions or concerns, please contact the experienced team of experts located in historic Rock Hill, SC. We are available by phone, live chat, and email in both English and Spanish for your convenience.

Avoid 990 Penalties Today!

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Time Is Running Out: File A Tax Extension Form 8868 Today

The due date for Form 990 is here! Nonprofit or charitable organizations worldwide have completed or are in the process of completing an IRS Form 990 to maintain tax-exempt status for their organization.

With only hours left to e-file Form 990 before the midnight deadline, here is how to beat the 990 extension due date 2017 by quickly filing tax extension Form 8868. Let’s be honest; you can rush through filing your 990 tax form today and possibly make major mistakes, or you can apply for a Form 990 extension. Time is running out: file a tax extension Form 8868 today!

Time Is Running Out: File A Tax Extension Form 8868 Today

If you need more time to e-file Form 990 you can file an extension for Form 990 and receive six additional months to file.

Not that we’re saying filling out a tax-exempt return is a brisk, afternoon activity (trust us, we know). But six months is a fairly long time… Until the time is up.

Unfortunately, today is the 990 extension due date for 2017 tax returns for nonprofit organizations operating on a calendar year.

Tax-exempt returns that are due today must be transmitted by midnight (local time), so head on over to our homepage where all your exempt organization e-filing needs can be easily met.

Even consider using our sister product TaxBandits, the new #1 home for everything tax exempt,
where you can transmit your Form 990 or apply for IRS Form 8868 using one account, and still enjoy the same e-filing features you’ve come to trust with ExpressTaxExempt.

Our live support team in Rock Hill, South Carolina is at the edge of their seats waiting to speak with you about any questions or concerns you may have about e-filing IRS Form 990 or an IRS Form 990 extension.

Give us a call at (704) 684-4751, Monday through Friday from 9 a.m. to 6 p.m., EST. Since it’s “deadline day” we are even going to stick around a few extra hours to be of assistance.

We can also be reached 24/7 through support@taxbandits.com, or chat with us live.

File Your IRS Form 990 Extension Now!

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Time is Winding Up: Get 6 Extra Months to File

Both Form 990 & 990-EZ are due by the fifteenth day of the fifth month following the organization’s tax year end date. Depending on the type of tax year that an organization operates on, the due date will vary. For example, if the organization operates on a fiscal tax year of April 1 to March 31 then its due date annually to file is August 15, while standard calendar tax year organizations (January 1 to December 31) would file on May 15 of each year.

Failing to file your Form 990/990-EZ can be very detrimental to your beloved tax-exempt organization. If an organization fails to file their annual information return with the IRS, a penalty of $20 is charged each day the return is late. Although this penalty increases daily, it cannot exceed 5% of the organization’s gross receipts or $10,000, whichever is less. For larger groups, if the organization’s annual receipts exceed $1,020,000, the per diem penalty increases to $100, with a maximum penalty of $51,000 per return.

Before you know it, it will be time for you to file with the IRS. We understand how hectic things can become when running an effective organization, so ExpressTaxExempt offers a quick and affordable extension for organizations to file their Form 990/990-EZ. Filing extension Form 8868 by the original filing deadline will grant an organization an additional six months to file, upon approval of the extension.

Filing Form 8868 with ExpressTaxExempt can be done within minutes. Simply register or sign in with ExpressTaxExempt to get started, enter basic information about your organization (name, EIN, address, and contact number) and submit your extension form in no time! You will be notified instantly by email with the status of your submitted form once we hear back from the IRS.

Are you on the go and not near your computer? No problem! Conveniently e-file with our downloadable mobile app. With our ExpressTaxExempt - Form 8868 Mobile App, you can quickly apply for an automatic extension on the go using your iPad or Android tablet. Just download, sign in, and choose the appropriate IRS form to apply for an extension.

As always, feel free to contact our support team of e-file experts at 704.839.2321 for any questions or help with your e-filing experience. We’re here to assist you Monday through Friday from 9 a.m. to 6 p.m. EST or feel free to reach us 24/7 via email at support@ExpressTaxExempt.com.

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3 Ways Nonprofits Can Avoid Late Filing Penalties

We know as well as anybody that keeping track of deadlines can be a chore. It’s pretty simple, after your tax year ends, you file your return the 15th day of the 5th month after. Say what?

Okay, if you’re confused, don’t worry. It happens to the best of us.

But we should probably examine the stakes at hand. I mean, what are the late filing penalties for nonprofits and tax exempt organizations?

Let’s use the words of the IRS themselves:

If an organization whose gross receipts are less than $1,000,000 for its tax year files its Form 990 after the due date (including any extensions), and the organization doesn't provide reasonable cause for filing late, the Internal Revenue Service will impose a penalty of $20 per day for each day the return is late.

From there, your maximum penalty is $10,000, or 5% of the organization's gross receipts. It depends on which is less, really. The penalty then reaches $100 per day, and can reach up to $50,000 if your nonprofit grosses receipts above $1,000,000. If you fail to file the required information return for three consecutive tax years, you will lose your tax exempt status.

I don’t know about you, but I’d rather avoid that. All of it.

So how do you avoid late filing penalties? Try following these steps.

Start early with ExpressTaxExempt

Instead of waiting until the last minute, create your account and start filing now. Even if your deadline is May 15th, you can start gathering your important records and entering valuable information now.

Give Multiple Users Access

With the ability to invite multiple users to the account, you can hand off your tax filing duties to a financial professional, a filing expert, or even a dedicated member of your team. As the main user, you have the ability to create sub-users and grant editing permissions to these users.

Manage Reviewers and Approvers

Do you have to present your return to a board of directors before you can actually file it? With the Manage Reviewers and Approvers feature, you can share Form 990 through a secure link with your investors, board of directors, or anybody who matters with just a few clicks.

Bottom line, planning and preparation are key. Going into your tax deadline with a gameplan will save you, your investors, and the people you help a lot of trouble. I mean, we’ve made Form 990 as easy as can be—so don’t miss the opportunity!

If you have any questions about these features, contact us by phone at 704.839.2321 to reach our dedicated support team. And follow our Twitter and Facebook to keep up with upcoming filing deadlines!

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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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Five Common Form 990 Errors

Paying taxes is unavoidable; paying even more money to the IRS because their long, complex forms caused you to make an error and incur penalties is not. 

Form 990 is a long and eye-blurring form (and the IRS-provided instructions for filling out the form is 100 pages long). But if you’re directing an organization exempt from income tax under section 501(a), you probably hardly have time for such “light” reading. So here are five common, avoidable errors made on Form 990 that could subject you to steep penalties or even an IRS inquiry:

• Using the wrong form. There are different types of Form 990 that apply to different tax exempt organizations. Using one form when you should use another can incur penalties.

• Form 990-N (“ePostcard”) is filed when your gross receipts are less than $50,000
• Form 990-EZ is filed when your gross receipts are less than $200,000 and your assets are less than $500,000
• Form 990 (“long form”) is filed when your gross receipts are greater than $200,000 or your assets are greater than $500,000.

• Using the calendar year instead of a fiscal year. The deadline to file Form 990 is the 15th day of the 5th month after the end of your organization’s fiscal year. Typically, this deadline is May 15 as many fiscal years do coincide with the calendar year. However, if your fiscal year ends on a day other than December 31, you could be at risk for filing late or even filing for the wrong year. Your filing year is dictated by the first month of the fiscal year. For example, an organization whose fiscal year runs from December 1, 2013-November 30, 2014 should file a 2013 Form 990 by April 15, 2015.

• Failing to prepare and include Schedules. ALL section 501(c)(3) organizations MUST prepare and attach Schedule A to Form 990. If this form is missing or incorrect, the IRS can penalize you. Based on organization type, gross receipts, and other stipulations, you may also be required to fill out and submit other schedules, without which your filing is incomplete.

• Submitting Form 990 with missing or inaccurate information. This could be anything from failing to mark an applicable box, to failing to list officers and key employees (including volunteers), to an imbalance between your ending net assets sections. Any discrepancies could flag your Form 990 as incomplete or incorrect, resulting in penalties or an IRS inquiry.

• Failing to file an extension. An extension can allow you to postpone your deadline for 3-6 months, depending on your type of organization and whether you plan to file a Form 990 or Form 990-EZ. However, an extension cannot be filed after your organization’s original deadline. If you are late filing your Form 990 and have not filed an extension, you’re at risk of accruing late penalties.

Avoiding these common mistakes and staying informed can make taking on Form 990 seem like less daunting of a task. And to make it seem even LESS daunting, here’s a bonus avoidable error, just for you:

• Not using Express990 to file! Sure, you could try to keep in mind these and all of the other errors you might make while filing, but why would you when we can do it for you? Express990 is easy to understand; it turns Form 990 into a conversation. Answer “yes” or “no” questions, fill in your financial specifics, and we’ll make sure everything matches up and everything required is included. We’ll then run an error check before submitting so that any obvious errors can be fixed and you avoid filing an incorrect or incomplete form. And if you see where you might need more time to file, you can e-file extension Form 8868 right from our website.

But if you still feel like pulling your hair out over Form 990, you can contact the Express990 team Monday-Friday from 9am-6pm EST by phone (704-839-2321) or by live chat (www.expresstaxexempt.com), or 24/7 by e-mail at support@expresstaxexempt.com.

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Steep Penalties

Tax Update: If you filed Part I of an Exempt Organization Extension Form 8868, your extended deadline of August 15 is coming up soon - next week, to be exact.

You must be ready to file your Form 990 or Form 990-EZ by then or you could incur some pretty steep penalties from the IRS. “How steep,” you may ask? Some are as much as $50,000 for tax-exempt organizations that have revenues of $1 million or $10,000 for organizations with revenues less than $1 million. These penalties may be charged for either a late return, an incomplete return, or both.

Penalties: As mentioned earlier, penalties are usually based on your organization’s gross receipts. If your organization has gross receipts of less than $1 million, and you have no reasonable cause for filing late, the IRS may impose a charge of $20 for each day your return is late. Your max penalty charge climbs up to $10,000, or 5% of your total gross receipt - whichever amount is less.

For tax-exempt organizations with revenues of $1 million or more, your max charge reaches up to $50,000, and the IRS may charge you $100 for each day your return is late.

Redemption: If for some reason, even after filing an extension, you still have to file late, all hope is not lost. Code Section 6652(c)(3) states that penalties due to late filing may be waived if you can prove “reasonable cause.” As such, the IRS may consider waiving the penalty, but not the interest that has incurred.

To prove your reasonable cause, the request must be a written statement that includes a declaration by an officer or director that the statement is being made under penalties of perjury. Your statement must have all the facts regarding what kept your organization from filing its return on time. This can include

• What prevented the organization from requesting an extension of time to file its return if an extension was not requested
• How your organization was not neglectful or careless, but exercised ordinary business care and prudence
• What steps have been taken to prevent the same situation from occurring in the future

Your statement needs to be attached to your Form 990 or 990-EZ along with any necessary documents. Your request could also be submitted as a response to a penalty notice.

Avoid filing late and dealing with IRS penalties by e-filing your Form 990 or 990-EZ with Express990. We work closely with the IRS in order to provide you with a safe, secure, and accurate e-filing process that will save you time and money.

For professional assistance with e-filing a Form 990, contact the live experts at our Rock Hill, South Carolina, headquarters by phone (704-839-2321, Monday through Friday from 9am to 6pm EST), email (support@expresstaxexempt.com), or live chat (www.expresstaxexempt.com).

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990 Penalties & How To Avoid Them

The main questions the Express990 Team receives are almost always about penalties. When it comes to 990 penalties, things get a little tricky. But don't you worry, I will explain them in detail and how you can avoid them or reinstate your tax exempt status.

Incomplete Returns
If you file an incomplete return, say you didn't fully complete a certain schedule on your 990-EZ, the IRS will contact you to notify you of the problem.

Late Filing Penalty
Late filing penalties are completely avoidable. First know, if you need more time you can e-file Tax Extension Form 8868 for an automatic 3-month deadline extension. Form 8868 can save you from having to pay hefty late filing penalties. The IRS states:
"If an organization whose gross receipts are less than $1,000,000 for its tax year and files its Form 990 after the due date (including any extensions), and the organization doesn't provide reasonable cause for filing late, the Internal Revenue Service will impose a penalty of $20 per day for each day the return is late. The maximum penalty is $10,000, or 5%, of the organization's gross receipts, whichever is less. The penalty increases to $100 per day, up to a maximum of $50,000 for an organization whose gross receipts exceed $1,000,000."

• Note there is no penalty assessed for late filing of the 990-N (e-postcard). If you do not file your 990-N, the IRS should send you a reminder notice. If you do not file your 990-N for three consecutive years, your tax exempt status will be automatically revoked. 

Reinstating Tax Exempt Status

If you have found out your tax exempt status has been revoked, you will need to contact the IRS. For most cases the IRS can reinstate your status over the phone, or they will let you know what you need to do. The IRS publishes an Automatic Revocation of Exemption List that has the names of organizations whose tax exempt status has been revoked so you can know for sure where your status stands. 

The best way to avoid 990 penalties is to file by your deadline. Your 990 deadline will be determined by what type of tax year you follow; Fiscal or Calendar. If you have any questions about e-filing your 990 or Form 8868 (application for extension of time to file an exempt organization return) don't hesitate to contact the Express990 team via phone: 704-839-2321 or email: support@expresstaxexempt.com

For More Information on 990 Penalties, check out these blogs:

How To Recover Payments Due To IRS Penalties

How To Reinstate Tax-Exempt Status

Tax Tips To Avoid Late Filing Penalties For Form 990-EZ

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