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Is My Nonprofit Responsible For Filing 1099 Forms?

Nonprofit leaders depend on ExpressTaxExempt and TaxBandits for annual tax needs

If nonprofit organizations are exempt from taxes, are they responsible for filing 1099 forms?

Has this question ever crossed your mind?

Nonprofit organizations are exempt from a lot, but filing 1099 Forms are not one of them.

Used by business owners to report non-employee compensation of $600 or more to an independent contractor, nonprofit organizations also utilize 1099 Forms to report prizes, awards, and additional payments.

What is a Form 1099-MISC and When Is It Due?

Before you try to rush and research tons of information on 1099 Forms, ExpressTaxExempt is here to help you and give you all of the information that you need. So let’s get to it:

The original due date for reporting nonemployee compensation was January 31, 2018. However, the other types of payments reported in Box 7 of a 1099 Form must be e-filed by Monday, April 2nd to include the following payments:

Prizes and Awards (for non-employees)
Professional Service Fees
Attorney, Accountant, Architect, or Engineer Fees
Fees paid by one professional to another (fee-splitting or referral fees)
Taxable fringe benefits
Payments to an insurance salesperson, and more.

Form 1099 Series (MISC, INT, DIV, R, S, B) forms must be e-filed with the IRS by Monday, April 2nd.

How Can I File By The Deadline?

With Easter right around the corner and so many opportunities to serve your community this season, I am pretty sure the last thing on your to-do list is filing your taxes.

Luckily, our sister product allows you to file your 1099 Form so quick that you don’t have to worry about missing the deadline!

Steps to file Form 1099 are as follows:

Create or sign in to your TaxBandits account
Select "Form 1099-MISC"
Enter payer details (name, EIN, address)
Enter recipient details (name, SSN/EIN, address)
Enter federal details for miscellaneous income
Enter state information and state taxes withheld for each applicable state
Choose for the form to be mailed to the recipient
Review, pay and transmit return directly to the IRS

Volunteers of nonprofit maintain support of their community with the help of ExpressTaxExempt

Information Needed To File Form 1099

You will only need four categories of information to file Form 1099 correctly:

Payer Details: Name, EIN, and Address
Recipient Details: Name, EIN/Social Security, and Address
Federal Details: Miscellaneous Incomes and Federal Tax Withheld
State Filing Details: State Income, Payer State Number, and State Tax Withheld

What Matters Most

You are working hard to improve your community health and well-being, don’t let taxes hold you back.

For all that you do, we make keeping your exempt status easy! File your 1099 Forms with TaxBandits and get back to helping others.

tax-exempt organization files for business tax exempt number

Organizations with business tax exemption status through the IRS are allowed to solicit donations and generate revenue for nonprofit purposes. Businesses who are tax-exempt need to know how to obtain a business tax exempt number for your organization.

A number of entities can fall under the business tax exempt category -- charities, schools, community organizations, governmental organizations, and more. In order to apply for 501(c)(3) status, the first step an organization must take is to file a standard entity registration with both the state and the federal government.

Once you’ve received your tax-exempt status, there’s an important number that you’ll need to obtain and use often throughout the existence of your organization.

How To Obtain a Business Tax Exempt Number For Your Organization

Follow These 4 Easy Steps to Receive a Business Tax Exempt Number:

Getting a business tax exempt number is actually fairly simple and can be done in 4 steps:

1) Develop and Organize Your Business

To be considered as an organized entity by the IRS, you must be either a corporation, trust or unincorporated association.

The first major step in developing and organizing your group is to contact your local Secretary of State or even an attorney to be properly formed as an entity and obtain the necessary documentation associated with the development of the organization.

2) Obtain an Employer Identification Number

Tax-exempt businesses all need an EIN; “EIN” stands for Employer Identification Number. If you’ve ever done anything tax related to a business or organization, you’ve probably heard the familiar acronym “EIN.”

This is number is required for functioning organizations and must be obtained through the IRS; even if the organization does not have employees.

Even tax returns are unable to be filed without an EIN. So this is definitely a “must have!”

3) File For Recognition of Exemption

This step is pretty straightforward. Simply file IRS Form 1023 to apply for recognition of exemption and wait for approval.

Once the application has been approved, an organization [and its EIN] is considered to be tax exempt and recognized as such through the government.

4) Check State Requirements for getting a Business Tax Exempt Number

After you have received your EIN and filed Form 1023, take a few moments to double check the tax exemption requirements for your specific state.

Contact the Department of Revenue or your state government to see if there are any other forms that need to be filed to secure the tax exempt status of your organization.

ExpressTaxExempt is Here To Help

As always, the ExpressTaxExempt team is here to help you as much as possible.

We’re just a phone call, email, or chat away if you ever have any questions or need assistance during any part of the e-filing process.

Feel free to contact our support team of e-file experts at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. You can also reach us 24/7 via email with support@ExpressTaxExempt.com.

10 Do's and Don'ts to Maintain Your Tax Exempt Status

Organizations worldwide have applied and received 501(c)(3) tax exempt status from the IRS for years. Groups such as private foundations along with churches, hospitals, educational institutions and charities are exempt from federal income tax under the Internal Revenue Code. Maintaining this status can be just as easy as it is to lose it.

Each year, over 100 501(c)(3) organizations have their tax-exempt status revoked. The most common cause of revocation is due to organizations that do not file their annual information return with the IRS for three consecutive years. These organizations find themselves in distress after being revoked and find out that it can be quite the hassle to bounce back from.

An automatically revoked organization loses the eligibility to receive tax-deductible contributions as well being removed from a list of tax-exempt organizations that most donors reference prior to giving. Eliminate the worry and concern of ever having to be revoked or losing your tax-exempt status by following these “do’s and don’ts” to ensure you stay on the right track:

"DO'S AND DON'TS"

DO’s:

1. File annual information returns with the IRS (Form 990, 990-EZ, 990-N, 990-PF and Form 1120-POL).
2. Withhold and Pay Payroll Taxes
3. Keep Records

-Financial Records (Money coming in and out, employment tax records & asset records)
-Permanent Records
-Minutes from Board Meetings
-Copy of previous returns and attachments sent to the IRS from the the last three previous years.

4. Give donors that make a donation of $250 or more a written acknowledgement. If your group is soliciting contributions from individuals, you should provide a written receipt and register and file them in your annual reports with the states.

5. Serve the public - services and activities of a 501(c)(3) organization should be directed toward an exempt purpose and the overall betterment of the public.

DONT’S:

1. Fail to file for 3 consecutive years
2. Engage in Substantial Lobbying
3. Participate in political campaign activity

-This includes campaign contributions, endorsements and public statements regarding candidates.

4.Serve private interests

-501(c)(3) organization activities should be directed toward an exempt purpose.

5. Unrelated Business Income

-Too much income received from activities not related to the purpose of the organization can become a threat for tax-exempt status to be removed.

By following these “do’s and don’ts” your organization can remain intact and effective. Losing tax-exempt status as a non-profit can strongly affect your organization in a negative way. If your organization does in fact get revoked at some point, there is still the opportunity available for you to be reinstated by the IRS. Although the law prohibits the IRS from undoing a proper automatic revocation, organizations can apply to have their exempt status reinstated. Reinstatement can happen four ways: 10 Streamlined retroactive reinstatement 2) Retroactive reinstatement process (within 15 months), 3) Retroactive reinstatement (after 15 months) and 4) Post-mark date reinstatement.

Be sure to file those annual returns and stay in good standing with the IRS by quickly and securely e-filing with ExpressTaxExempt. As the number one authorized IRS tax e-file provider, ExpressTaxExempt offers simplified and easy-to-use versions of Form 990, 990-EZ, 990-PF, 990-N, and its newest form specifically designed for political organization returns, Form 1120-POL. So take a few minutes and file today to keep those taxes away!

An important deadline is approaching for tax exempt organizations and Form 990-N e-filers! Organizations that operate on a fiscal tax year may need to file a return by next week in order to keep their organization's current tax exempt status.

Form 990-N (e-Postcard) is due every year by the 15th day of the 5th month after the close of your tax year. A tax year is usually 12 consecutive months and is categorized as either a calendar tax year (January 1 - December 31) or a fiscal tax year (a period ending on the last day of any month except December). Organization’s whose fiscal tax year ended in the month of February should file their Form 990-N via ExpressTaxExempt by July 15. Since the July 15 due date falls on a Saturday, you will have two extra days to submit since filing will be extended to the following business day, which would be Monday, July 17th. Once again, all 990-N Forms for groups that have a fiscal tax year which ends in February should file no later than Monday, July 17th.

Although there is no penalty for filing Form 990-N late, organizations that fail to file for three consecutive years will automatically lose their tax-exempt status.

Filing a Form 990-N (e-Postcard) for your organization is very easy through ExpressTaxExempt and can be completed in three simple steps:

Search Organization's EIN

Enter your Employer Identification Number (EIN) to view filing history and e-file your Form 990-N to the IRS.

Select Filing Year

Choose the available tax year from your filing history list to e-file and create an account to review your filing details. You can also update any of your organization information if necessary.

Review & Transmit to the IRS

Complete payment information and transmit your e-Postcard to the IRS instantly. You can review your payment receipt or summary of e-Postcard once you transmit your return.

And just like that, your form is filed with the IRS and your organization remains tax exempt. It’s really easy as 1-2-3! If things are busy with your organization and you just don’t have the time to file the Form 990-N you can just take a few minutes and file Form 8868 with ExpressExtension and apply for a 6-month filing extension to get some more time.

Although your organization’s due date may not be July 15, you may have one coming up soon. Reference our Fiscal Tax Year Filing Calendar chart below to find out your deadline:

Tax Year Begin Date	Tax Year End Date	Form 990 Deadline
January 1	December 31	May 15
February 1	January 31	June 15
March 1	February 28/29	July 15
April 1	March 31	August 15
May 1	April 30	September 15
June 1	May 31	October 15
July 1	June 30	November 15
August 1	July 31	December 15
September 1	August 31	January 15
October 1	September 30	February 15
November 1	October 31	March 15
December 1	November 30	April 15

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.

Check-out some of our most recent blogs:
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When it comes to marketing, photography is an often overlooked key factor.

How is that? Well, the human eye is naturally attracted to visual imagery.

While we’ve talked to you about social media, email, and video marketing—there’s a key factor we may have overlooked.

Want to engage with your audience on social media? Tell your stories with photographs!

How Can Photography Help?

Look for photogenic moments in your organization and at your events, and use these on social media.

Don’t post photos that have no story to them. If you’re gonna photograph people, make sure they’re standing in front of whatever your organization has accomplished (a habitat house, a food drive).

Don’t post every photograph you take. If you take 100 photos, a handful of them will be amazing photos. The rest can be saved for your archives, but less is definitely more.

As for pictures of your staff doing nothing—sure, your social media fans may know your staff, but if they’re not captivating your audience, don’t use them.

Telling Stories with Photography

So how can you tell stories with visuals?

According to John Haydon, the best way to tell stories is by using the very concept of storytelling: every story has a beginning, a middle, and an end.

A classic story will show progression, action, or change.

Haydon says there are four ways to select share-worthy images:

Show Action: Photographs that show action are storytelling images.
Show Relationships: Photos with relationships are great at telling stories. If you’re photographing a dog adoption, and you see a happy dog with their happy owner—the story tells itself.
Show Problems: When you show a problem, you’re telling a story. And this story inspires viewers to take part and become the happy ending.
Show Results: Photos that show the attainment of a goal tell the story from the finish line. Sometimes that's simply showing someone with a before and after of a medical procedure.

While you’re planning your storytelling photographs, start planning your Form 990 return. With the fast and easy e-filing at ExpressTaxExempt, you’ll never have to worry about confusing tax forms. If you have any questions about e-filing, call our support experts at 704.839.2321.

So ask yourself, what are your best photographable moments? How can you use these to share your stories?

It’s about that time—the time when tax-exempt organizations scramble to find an accountant who will file their Form 990 returns before it’s too late.

But what are the mistakes you’ve made with your nonprofit? Are you ready for the deadline day? Is your nonprofit at risk?

You Haven't Filed Form 990 in Years

The IRS is pretty clear about this—if you haven’t filed in a while, you might be in danger.

The IRS has an automatic revocation for non-filing for three consecutive years.

According to the IRS, if an organization fails to file their annual return as required for three consecutive years, its tax exempt status is automatically revoked after the due date for filing its third annual return.

When an organization loses their tax-exempt status, they may need to file income tax returns and pay income tax, but they will also get the chance to apply for reinstatement of exemption status.

You Don't Know What You're Doing

Of course, filing your 990 forms can be confusing. Instead of getting stuck in the mire, we’re going to break down the basics real quick.

Form 990-N (the e-Postcard): You may only file an e-Postcard if you have an organization that makes $50,000 or less a year in gross receipts.
Form 990-EZ: You can use this form if your gross receipts are less than $200,000 or total assets are less than $500,000.
Form 990 (long): Form 990 must be filed by an organization if it has either 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.
Calendar Tax Year: If your nonprofit organization’s tax period is listed from January 1 to December 31.
Fiscal Tax Year: If your nonprofit organization’s tax period begins or ends any date other than January 1 or December 31, like April 1 to March 31, for example.

You Didn't Know You Can Get More Time

But your tax exempt organization doesn’t have to hit deadline season in a panic!

With Form 8868, you can request an automatic 3-month extension of time to file for your organization.

You can also e-file Form 8868 to apply for an another (non-automatic) 3-month extension to file if the original extension was not enough time.

While the first extension is automatic, the organization must show reasonable cause for the additional time requested in order to get the non-automatic extension.

Don’t worry, though. These mistakes are easy to fix with ExpressTaxExempt.

Need to file Form 990-N? We offer the e-Postcard FREE for the current year! E-filing the 990-EZ and the 990 Long is just as easy with our interview-style, cloud-based software.

And if you’re not ready to file, e-file for an extension or check out the 8868 App!

So ask yourself—is your nonprofit at risk?

Everything is going great—your nonprofit is growing in the community, volunteers are showing up for events, and you see people are getting the help they need. But then it happens. A bump in the road.

Your Form 990 return is rejected by the IRS.

What do you do? Who do you turn to? Well, you trusted us with video production, social media, and email marketing, so trust us when we tell you this isn’t the end. Take a deep breath, exhale, and keep reading.

First up, let’s examine Form 990 rejection:

This may sound obvious, but you need to obtain tax exempt status from the IRS before filing Form 990. If you try to file without tax exempt status, you will be rejected. You can get tax exempt status by filing Forms 1023 or 1024.

If you’ve already applied for exempt status as a 501(c)(3), your return may be rejected by the IRS unless you check the applicable option.

If you file your Form 990 return with the incorrect tax period for your organization, the IRS will reject it. This is a pretty common error! Many organizations believe they run on a calendar tax year, even though they don’t. Don’t know your operating period? You’ll have to contact the IRS to find it out.

If your tax exempt organization hasn’t filed for three consecutive years, the IRS can cancel your status. Not only will your 990 be rejected in this case, but you’ll also need to re-file a Form 1023 or 1024.

So what do you do if your 990 is rejected? Well, if you filed with ExpressTaxExempt, we will notify you right away if your form was rejected, explaining the reason so you can quickly correct any needed information.

After the corrections are made, you can re-transmit your return at no extra cost!

So what do you do if you’ve lost your status as a nonprofit? Your tax exempt organization will need to apply to have their tax-exempt status reinstated, even if you were not originally required to file an application.

What Do You Do If You Lose Tax Exempt Status?

You need to get it back, come on! To do this, you simply need to apply for tax exemption recognition by filing Form 1023, Form 1024, or a letter if applying under a different Code section, regardless of whether the organization was originally required to apply for exemption. Finally, you need to pay the appropriate user fee.

Want to reduce the chance of 990 rejections? By e-filing with ExpressTaxExempt, you replace the confusing and frustrating tax forms with the streamlined e-filing process of ETE.

If you run into any questions while e-filing, give our awesome customer support team a call at 704.839.2321. They can also be reached by email at support@ExpressTaxExempt.com.

Legal audits usually serve as an overview of your organization’s non-financial compliance, governance, and risk management issues. Tax-exempt organizations generally consider having a legal audit when new management is in place and they want to start with a clean state, avoiding any costly mistakes. Typically, a standard legal audit will review the following key areas…

Corporate Status
By incorporating a nonprofit or tax-exempt organization, you protect your directors, officers, and members from personal liability. But, to enjoy the benefits of incorporating, your corporation must be in good standing. To review corporate status, you most likely need to provide

Bylaws
Corporate filings
Articles of incorporation

These items are to support that your tax-exempt organization operates in a manner consistent with the law and governance.

Chapters and Affiliates
If your tax-exempt organization has chapters or affiliates, then your bylaws should be explicit about the authority to create chapters. There should also be some form of agreement like a charter or license in place that outlines the term of the relationship.

Governance Policies
Because of the IRS’ encouragement of certain policies, tax-exempt organizations and nonprofits are making their policies and procedures more formal. The Form 990 even references a variety of governance policies and requires your organization to reveal if they’re implemented.

It would be in your best interest to review these governance policies regularly. The audit will consider about four things:

Which policies exist
Whether policies are reasonable
If additional policies make sense for the organization
Whether policies are consistent with existing practice

Tax-Exempt Status
An audit for your tax-exempt organization will undoubtedly review your tax-exempt status. The prime consideration is to see if your organization is properly identified in regard to its tax-exemption and public charity status. The review will also consider if your organization’s activities remain within the scope of its ruling.

You’ll need to provide your

Previous Form 990’s
IRS Determination Letter
Application for Recognition of Exemption

Any changes made to your governing documents or sources of support, programs, or purposes must be reported to the IRS when you file your next Form 990.

Other Federal Tax Matters
The review of your federal information and unrelated business income tax returns is important because forms of that nature, such as the Form 990, are publicly available. Legal analysis of your tax forms focuses on the accuracy of your information shown on your return. That information is considered along with other information from the legal audit and the overall presentation of your return.

We’ll take a short break here as to not to overload you with all this tax goodness. Honestly though, it’s a good bit of dense information to grasp an understanding of; however, this blog helps to clarify a few things. In the next blog, we’ll conclude with the rest of the key areas involved in a legal audit.

Remain in compliance with the IRS and your own tax-exempt organization governance by e-filing your tax-exempt returns with Express990. Our service provides a mini-audit with the built-in error check that reviews your return for errors before you transmit to the IRS.

Expert help is available through step-by-step instructions and with live professionals at our office in Rock Hill, South Carolina. Contact us at (704) 839-2321, Monday through Friday from 9am to 6pm Eastern Standard Time; or, email us anytime, 24/7 at support@expresstaxexempt.com.

In the realm of tax and legal jargon, there’s a phrase you probably heard as many times as we have here in the office, “Non-profits are tax-exempt organizations, but not all tax-exempt organizations are nonprofits.”

“Tuh-mey-toh, Tuh-mah-toh,” right? Both are so similar; yet, there are significant differences that justify their separate designation.

Non-Profits
Your organization being labeled as a non-profit or for-profit is a perception of state law. According to state law, a for-profit organization generates money specifically for its owners and investors. By having your organization recognized as a non-profit, you’re basically stating your organization has some other purpose other than creating revenue for owners and investors. But that purpose alone doesn’t necessarily qualify for an exemption from taxes.

Tax-Exempt Organizations
As mentioned before, labeling your organization as a non-profit doesn’t mean it’s automatically recognized as “tax-exempt.” Above all, you must apply to the IRS for a determination of a tax-exempt status. There are many types of organizations that are qualified for a number of tax exemptions; one would be like an exemption from tax on income that is received during the course of activities conducted in relation to your organization’s tax-exempt purpose.

A 501(c)(3) organization is your most common type.of tax-exempt organization. In order to qualify, you have to file a Form 1023, Application for Recognition of Exemption Under Section 501(c)(3), with the IRS. Your state may also require you to submit an application with them to qualify for exemption from state income tax and other state taxes.

For more information about non-profits and tax-exempt organizations, check out the following blog: Becoming a Non-profit or Tax-Exempt Organization

One thing you should remember is that both non-profits and tax-exempt organizations can make money. Just because you’re labeled as either “non-profit” or “tax-exempt” doesn’t mean that your organization can’t have any money left over at the end of the year. Any funds not needed to fulfill a current expense can be used to further your organization’s mission or be saved for future activities.

If your organization is tax-exempt, or a non-profit that’s recognized as “tax-exempt,” you can safely and securely e-file your tax-exempt return with Express990. We offer all three 990 forms for tax-exempt organizations. You can also download our FREE Express990 App for iOS and Android tablets, or use our mobile site to e-file a Form 990-N (e-Postcard).

For any questions or assistance with our e-filing services, feel free to contact our live, expert help at our headquarters in Rock Hill, South Carolina.

Phone: (704) 839-2321 (Monday - Friday, 9am - 6pm, Eastern Standard Time)
Email: support@expresstaxexempt.com
Live Chat: www.expresstaxexempt.com

You provide a local service, and your service fulfills an existing need, it attracts support, and produces substantial results. You’ve thought about it and want to take your services to the next level. An inspiring route to give back to your community while serving others is to start a nonprofit or a tax-exempt organization.

You need to understand that building and maintaining a nonprofit could potentially take years of effort and an even greater amount of determination. However, there are general steps you can take in your journey to become a nonprofit or a tax-exempt organization.

First Step: Educate Yourself

Do Some Research. You need to figure out if there are any other nonprofit organizations that are currently providing the same type of service in your community. It may prove harder to find support if you’re just copying existing services rather than improving or adding to them.

Be familiar with how a need isn’t being met within demographic or population data that shows a need for your services.

Is A Nonprofit the Correct Path? As a possible Public Charity, you must organize and operate exclusively for exempt purposes that are in place with section 501(c)(3) of the Internal Revenue Code.

Know and Consider the Alternatives. You may find that building a nonprofit a complicated way just to pursue your passion to serve your community. Developing and maintaining reliable income streams will most likely be your greatest challenge. Statistics show that less than half of new nonprofits make it over five years, and those who do make it, at least a third of them are in financial stress.

Don’t let that discourage you. Consider other possibilities that can still let you operate as a nonprofit with less effort and cost. With that, you can refocus on serving your community and developing experience and support.

Second Step: Build a Sturdy Foundation

Create a Mission Statement. Presenting your mission statement is a critical step. It tells your organization’s purpose, what types of people you serve, and how you serve them. Every move you make with your organization should be to support and progress your mission.

Draft a Business Plan. By having a business plan, you can efficiently describe, in detail, your organization’s intention for achieving its mission. A business plan can also be used to outline new projects or ventures.

Develop Your Board. Your board will perform a variety of roles and legal responsibilities. It will also change as your organization grows in order to carry out duties effectively. Your recruitment will be most important, but also systematic board development like orientation, training, evaluation, and the cultivation of board members are crucial to overall success.

Third Step: Incorporate Your Nonprofit

Reasons you should incorporate:

Formal structure adds credibility to your programs and services
Corporate structure limits the liability of your organization's officers and directors
Documents, policies, and procedures associated with corporations are required by the IRS

Fourth Step: File for 501(c)(3) Tax-Exempt Status

Eventually, you’ll need to apply for tax-exempt status with the IRS. There is a registration fee that depends on your average annual gross receipts. The decision from the IRS could also take up to a year to receive based on the information from your application.

Fifth Step: Continuous Compliance

Register with Your State’s Agency. Your state agency manages charitable organizations and solicitations. If you plan to get contributions from other states, you would need to register again within those states. Registration requirements may vary from state to state.

File Your Required Federal Returns. To receive tax-exempt status, you should act like a tax-exempt organization from the day of your incorporation. That means filing a Form 990 even if you’re a start-up, even if you had a short tax year, even if you brought in no revenue at all. Forms break down like this:

Form 990 (Long Form) - For tax-exempt organizations with gross receipts greater than or equal to $200,000 and total assets greater than or equal to $500,000.
Form 990-EZ - For tax-exempt organizations with gross receipts less than $200,000 and total assets less than $500,000.
Form 990-N (e-Postcard) - For tax-exempt organizations with gross receipts less than $50,000.

These returns are due on 15th day of the 5th month after your tax end date and, if you fail to file for three consecutive years, you’ll automatically lose your tax-exempt status.

Each guideline may vary with each state so it’s recommended that you consult with a tax professional for detailed assistance. Stay in compliance with the IRS by e-filing your tax-exempt return with Express990. We support all three 990 forms for tax-exempt organizations, and we offer a safe, secure, and accurate e-filing process that will save you time and money.

For any assistance with e-filing our available 990 forms, you can contact our live professionals by phone (704-839-2321, Monday through Friday from 9am to 6pm, Eastern Standard Time), by email (support@expresstaxexempt.com), or by live chat (www.expresstaxexempt.com).

Three Years Ago
“Congratulations! You’ve created your first tax-exempt organization.”

Two Years Later
“Wow buddy, two more organizations to the list. You must be very proud!”

Last Year
“You... don’t slow down, do you? More additions, how do you find the time?”

So, you have other organizations that operate in conjunction with your main one. A situation such as that is considered a Group in which your central organization is the Parent and your branching organizations are Subordinates. As in any family, it’s the parents’ job to keep their children, or, in this case, subordinates, well and happy. One way to keep your “children” well and happy is by gaining a Group Exemption, which eliminates each of your subordinates applying for a tax exempt status on their own.

What is a Group Exemption
A group exemption allows the central or parent organization to confirm that its subordinates are eligible for exemption and to include each subordinate under its cover for tax-exempt purposes. This exemption comes in the form of a letter from the IRS to the parent organization and grants tax exemption to one or more of the subordinates.

The method is created to decrease the paperwork for the taxpayers and the IRS when affiliated entities are the same in their purpose, structure, and operations.

Obtaining a Group Exemption Letter
To pursue a group exemption letter, you must, of course, first gain recognition of your own tax-exempt status. After that, you can obtain a group exemption letter if you have one or more subordinate organizations included in your general supervision or control.

Keep in mind that your parent and subordinate organizations don’t have to be categorized under the same tax section; however, the IRS has decided that some fundraising techniques and activities aren’t cleared for group exemptions. For more details, visit the IRS webpage.

How to Be Included in a Group Exemption Letter?
To add a subordinate in your group exemption, your parent organization has to certify that the subordinate is organized and operated conforming to sample documents your parent organization submits in order to support its subordinates’ tax exemption.

For a subordinate to be included, you must authenticate that it:

Affiliates with the parent and is subject to the parent’s general supervision or control
Exempts under the same IRC 501(c) paragraph as all your other subordinates
Excludes as a private foundation or a foreign organization
Operates on the same tax year as the parent
Information Needed for a Group Extension Letter

As the parent company, you also have to provide certain information on behalf of your subordinates. Along with proving that your subordinate organization meets the requirements, you must submit a letter that states

A description of your subordinates’ principle purposes and activities, which includes financial information
A sample copy of your subordinates’ adopted, uniformed governing instrument
An assertion that your subordinates’ purposes and activities are as set forth in the representations provided in the above description and governing instrument
A statement that each subordinate has submitted a written request to be included in the group exemption letter
A list of your previous recognized subordinates that have tax-exempt status

Group Returns
Once the tax-exempt status has been achieved for your subordinate organizations under a group extension letter, you can then file a group return covering all of your subordinates. Keep in mind that you’ll still have to file a separate return for your parent organization; furthermore, your subordinates are still required to file their own Form 990-T if they are subject to tax on unrelated business income.

A group return can only include your subordinates that have, in writing, authorization to be added in the return. Your group return must also be based on the tax period of the parent organization and your subordinates’ information can be provided by:

Separate schedules for each subordinate attached
A consolidated basis for each subordinate and the parent on one group return

For more details on group extension requirements or returns, visit the IRS website.

Keep it all in the family by e-filing your group return with Express990. We support each 990 Form for tax-exempt organizations (Form 990, Form 990-EZ, Form 990-N (e-Postcard)) and provide expert help with live professionals so you’ll be covered like family looking out for family.

For assistance with e-filing your tax-exempt return, contact us at our headquarters located in the quaint town of Rock Hill, South Carolina. We’re available by phone Monday through Friday from 9am to 6pm EST at (704) 839-2321, by email at support@expresstaxexempt.com, and by live chat at www.expresstaxexempt.com.

Twenty-two weeks left until Thanksgiving?
Twenty-seven until Christmas?!
Time certainly doesn’t wait on anyone, but can you believe how fast we’ve blown through the first half of the year? The weather was just beginning to warm up a couple of months ago and now it’s hot, scorching hot, depending on your location. In about two months time, it’s going to start cooling down again. Where does the time go?

By running a tax-exempt organization, you probably have less time than most, especially if your organization operates on a fiscal tax year and your return deadline falls within the second half of the year. Along with filing the appropriate tax exempt return (Form 990, Form 990-EZ, Form 990-N (e-Postcard)), here are seven other items that specialists advise their tax-exempt clients to have done by the end of the year.

1. Annual Meeting
Most corporate bylaws and state statutes require that the board of directors meet at least once every year. Typically, the meeting is where your board or voting members fill any open spots, appoint officers, approve budget, and pretty much make other executive-type decisions.

2. Annual Report
Along with the annual meeting, there’s also the annual report that’s required to be filed with your organization’s state of incorporation and any other states you may be registered to do business in. Failure to file this report could lead to less of a good standing with the state and ultimately administrative dissolution. The year’s end is an ideal time to make sure all filings are up to date and to determine whether your organization will conduct business within new areas that may require registration.

3. Solicitation Registrations
Make sure your solicitation registrations are current. A lot of states and local areas require tax-exempt organizations to register before you can solicit funds in that area. Now, the word solicit is broadly defined and may surround any request targeted to residents within the area.
Most locations require renewals every year, which makes the year’s end a good time to figure out whether your organization is registered in all of the locations where you plan to raise funds in the following year. And it’s also the best time to check the status of renewals in locations you’re already registered.

4. Gift Administration Issues
To make sure that terms and restrictions are recognized, the year’s end is a proper time to review your organization’s grant agreements.

5. Insurance Policies
Examples include general liability, officer liability, etc. Use this time to determine whether there are adequate limits of coverage and if your organization’s current activities are covered by its policies.

6. Private Foundation Considerations
To avoid excise tax penalties, you could spend your funds in charitable activities or make grants to public charities. Contact a certified tax accountant to find out how much could be spent. You’re also going to want to look back through your business holdings of private foundations and disqualified persons to make sure they don’t altogether exceed 20% of voting influence.

7. Thank Your Donors with Proper Gift Receipts
If donors don’t receive a gift receipt by the end of the year to confirm their tax deduction, they may feel inclined to not donate again. Also, make an effort to ensure that contributions from donors are properly recognized and in compliance with IRS protocol.

Whether you want to end your year strongly or begin the second half of the year in good standing, Express990 can help with the e-filing of any of the 990 forms for tax-exempt organizations. Express990 works closely with the IRS to bring you a safe, secure, and accurate e-filing process, backed by expert professionals that will save you time and money.

For assistance with e-filing any of our available 990 forms, contact our live support by phone Monday through Friday from 9am to 6pm, Eastern Standard Time, at (704) 839-2321, by email at support@expresstaxexempt.com, or by live chat at the Express990 website

In the city of Taxtropolis, there are only two kinds of people… Those who file their tax return on time and those who do not. These city streets are unforgiving to any level of offenders. But… there is a change sweeping through. A hero, known only as Rev. Proc. 2014-11, is making it possible for offenders to streamline the process of regaining their tax-exempt status.

No one knows how or why Rev. Proc. arrived from the land of IRS-tron. But witnesses say that Rev. Proc. works in three main ways in which an organization that has lost its tax-exempt status can apply for retroactive reinstatement to the date of revocation.

Level 1 Offenders
The first level of offenders consists of those who have

Lost their tax-exempt status for the very first time
Failed to file a required Form 990-N (e-Postcard) or Form 990-EZ for three consecutive years
Applied for retroactive reinstatement with a Form 1023, or a Form 1024, within 15 months from the day their status was revoked

For first level offenders, Rev. Proc. can permit you to regain your tax-exempt status as of the date of revocation without any questions asked. You will not be required to file a Form 990-N (e-Postcard) for the prior year or a Form 990-EZ for any year in which you were required.

Your organization can be reinstated, if you:

Re-submit an Application for Exemption with “Streamlined Retroactive Reinstatement” written across the top
Pay the applicable user fee

Level 2 Offenders
The second level of offenders are those who have

Failed to file a required Form 990 (Long Form) for three consecutive years
Applied for retroactive reinstatement within 15 months from the day their status was revoked

Section 5 of Rev. Proc. allows organizations in this predicament to make an argument for reasonable cause. If reasonable cause is established for any of the three consecutive years you failed to file, you can qualify for reinstatement by

Applying for retroactive reinstatement within 15 months from the day your status was revoked
Paying the applicable user fee
Establishing your organization had reasonable cause why it failed to file for one of the three consecutive years
Completing and file the proper tax returns for all the tax years in the consecutive 3-year period that you missed
Including a statement with the reinstatement request confirming that you have filed the required annual returns

Level 3 Offenders
The third level of offenders are

ANY tax-exempt organization, whether you’re required to file a Form 990-N, 990-EZ, or 990, that is applying for reinstatement AFTER 15 months from the day the status was revoked

Along with following the reinstatement steps for Level 2 Offenders, Section 6 of Rev. Proc. requires you to provide a reasonable cause for each of the three consecutive years you failed to file.

Second chances are sometimes hard to come by in any situation. Reduce the need to be rescued by Rev. Proc. in Taxtropolis by quickly and easily e-filing with Express990. We offer support for any of the 990 forms for tax-exempt organizations and you can e-file your Form 990-N (e-Postcard) FREE for the current tax year.

For any questions or assistance with our service to e-file, feel free to contact our live, expert help at our headquarters in Rock Hill, South Carolina.

Phone: (704) 839-2321 (Monday - Friday, 9am - 6pm, Eastern Standard Time)
Email: support@expresstaxexempt.com
Live Chat: www.expresstaxexempt.com

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