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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The Best Advice for Nonprofits on Tax Day

Tax Day 2018 has officially arrived! Your initial instinct may be to focus on your personal income tax return, but your organization may need to also submit a return to the IRS by midnight.

If your nonprofit or tax-exempt organization operates on a fiscal tax year beginning in December and running until November, you must file a 990 Form by TODAY, April 17th, Tax Day.

Today is the last day to file taxes 2018 for your nonprofit organization.

If this deadline caught you off guard, here's the best advice for nonprofits on Tax Day.

Advice for Nonprofits on Tax Day

The most recognized and discussed tax day of the year is today, April 17th. As a leader of a tax-exempt organization, here is what you need to know about the Form 990 series as well as tax extension Form 8868.

Form 990 Series

Form 990-N (e-Postcard): Filed by tax-exempt organizations with gross receipts less than or equal to $50,000.

Form 990-EZ: Filed by tax-exempt organizations with gross receipts that come to less than $200,000 and $500,000 in total assets.

Form 990: Exempt organizations with more than or equal to $200,000 in gross receipts or total assets more than or equal to $500,000 typically file Form 990.

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

Tax Extension Form 8868 Due Date

Need more time to file your IRS Form 990? Using IRS Form 8868, your organization will automatically get 6 months to file Form 990. To avoid penalties, you will need to file by midnight TONIGHT! That’s right, Form 8868 is due today, April 17th, 2018. If you file after Tax Day 2018, your IRS extension form will be rejected.

Steps To E-file IRS Form 8868

1. Register or sign in with ExpressTaxExempt
2. Add organization's basic information such as name, EIN, address, and contact number
3. Select the IRS form which you are applying for the tax extension
4. Enter your organization's tax year period
5. Choose your tax extension type and provide information for signing authority
6. Review your return and fix any errors
7. Pay and transmit to the IRS

To make Tax Day even better for your nonprofit, you should take advantage of a personal income tax extension using TaxBandits. Extension Form 4868 is used by individual or joint taxpayers to receive an automatic extension of up to 6 months to file their returns. TaxBandits also handles Form 990 Series tax filing so you can complete both forms from one account. 

It takes just a few minutes to apply for an income tax extension using TaxBandits. Sign-up for a free account today. 

File Tax Extension Form 8868 Today!

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Recover From Penalties

As the title states, you most likely are looking for how you can recover from IRS penalties because of late filing. However, there aren’t really any ways to get back what you’ve lost from IRS penalties; fortunately, you can become proactive and prevent late filing penalties for the next tax season.

One of the best assets available for you to avoid IRS penalties is filing a tax extension. The Extension Form 8868 is broken into two parts, and can grant you either an automatic, 3-month extension, or a non-automatic, additional 3-month extension. By filing Part I of the extension form, your extended deadline will depend on your tax period end date.

For a Calendar Tax Year:
Original Tax Deadline (May 15) + Extension Form 8868 Part I (3 months) = Extended Tax Deadline (August 15)

For a Fiscal Tax Year:
Original Tax Deadline (15th Day of the 5th Month after tax period end date) + Extension Form 8868 Part I (3 months) = Extended Tax Deadline (Original Deadline + 3 months)

By filing Part II, you can gain an additional 3-months under two conditions:

1. You already received the first extension from Part I
2. You can provide a valid reason for the additional time

Once you gain your additional time, you can add three months to your extended tax deadline.

Calendar Tax Year:
Extended Tax Deadline (August 15) + Extension Form 8868 Part II (3 months) = 2nd Extended Deadline (November 15)

Fiscal Tax Year:
Extended Tax Deadline (Original Deadline + 3 months) + Extension Form 8868 Part II (3 months) = 2nd Extended Deadline (Original Deadline + 3 months + 3 months)

FACT: To properly take advantage of Extension Form 8868, you need to have Part I filed before or on your original tax deadline.

If you didn’t manage to file a tax extension on time, you can still submit an explanation with your tax form pertaining to why you’re filing late. Your reasons can go on Schedule O of your Form 990 or Form 990-EZ. You can use as much room as needed to provide adequate information on Schedule O; there is no limit to the amount you write.

The IRS mainly looks for “facts and circumstances,” or reasonable explanations detailing why you were delinquent. Examples of legitimate excuses include

• What prevented your organization from requesting an extension of time to file its return
• 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 happening again

You’ll gain a better chance of having your penalties dropped or lessened by supplying answers to the questions above. You should also include any circumstances that were outside your control like unexpected events, or advice from a tax professional.

Prevent late filing penalties during the next tax season by e-filing your Extension Form 8868 with Express990. We offer both Part I and Part II of the tax extension, and you can even e-file it wherever you may be with the Express990 App for iOS/Android tablets or mobile site for smartphones.

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

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Public Disclosure

Your tax season was a breeze. You were able file and transmit your exempt tax return, and it was easily accepted by the IRS. Everything is going so well. And then, one day, you have someone at your place of business requesting information about your organization and its tax filings. No, this isn’t an audit, but just a local citizen asking about the dealings within your organization. Why would a person want to know that stuff? There could be a million and one reasons why, but the main issue here is that your organization has to comply with the request.

FACT: All organizations, except for private foundations, that are under Code Section 501(c) exemption, are required to disclose certain information to whomever is interested.

The IRS regulations require that nonprofits and tax-exempt organizations make the following available to be viewed by the general public:

Annual Information Returns
You have to provide the last three annual information returns filed by your exempt organization, which includes a Form 990, 990-EZ, 990-N (e-Postcard), 990-T, and all submitted schedules and supporting attachments.

Under these same regulations, you don’t have to provide your

• Form 1120-POL
• Schedule A of Form 990-BL
• Schedule K-1 of Form 1065
• Lists of received contributions, grants, and gifts

Application For Tax Exemption
You also need to provide your Form 1023, Application for Recognition of Tax Exemption, or a Form 1024, along with all the supporting documents and statements that were sent to the IRS.
However, you don’t have make public any applications the IRS haven’t approved or any section 501(c)(3) applications that were filed before July 15, 1987.

So if someone shows up to your organization’s main office, and they request your Form 1023 or your last three tax returns, you must allow that person to see them. This is called an On-Site Request, and the person can even photocopy the forms if the equipment is present. You can also have a representative be there for the copying.

If your organization receives a Written Request, you must satisfy the request within 30 days of receiving it. Here are some key things to keep in mind about written requests:

• Requests have to include an address in which the information can be sent
• You’re allowed to charge a reasonable fee for processing the request
• Fees cannot be higher than $1 for copying the first page and $.15 for each additional page
• You can request for advance payment of fees before processing the request
• The request is considered complete as of the date of the postmark or delivery 

If a person’s request is sent and fulfilled through email, the process is considered complete on the date the replied email was sent.

You’re exempt organization is covered under Exemption for Website Posted Documents if your documents are widely available on the Internet, and you don’t have to honor requests for copies. But you do have to provide

• The website address
• Steps on how to download the information
• A format that displays the information exactly how it looks when it was filed 

Penalties
The IRS may charge a fine for any exempt organization for not complying with regulations. Penalties can be $20 per day with a maximum penalty fee of $10,000 for each return that isn’t provided. There’s no maximum penalty for failing to provide your section 501(c)(3) application; you can expect a daily fee until you do.

Stay in compliance with these disclosures by already having your tax returns e-filed 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. And you receive direct confirmation when your form is transmitted, and whether it’s been accepted or rejected.

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.

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What Happens If I Miss The 990 Filing Deadline?

So, the “15th day of the 5th month” deadline is quickly approaching. You realize that you won’t be able to file your Form 990 on time and decide to submit an Extension Form 8868 for a 3-month extension; however, those three months have come and gone and, for whatever reason, you still haven’t filed your Form 990. Before you know it, you miss the filing deadline and are probably wondering, “What happens now?”

If the filing deadline has passed, keep in mind that you can still file a Form 990. And, you very well should because, if not, you could incur a daily penalty charge for each day your return is late.

Late Filings, Penalties, & Fees

If your organization’s gross receipts are less than $1,000,000 for the tax year and you file a Form 990 or an Extension Form 8868 after the due date, without any cause for filing late, the IRS will charge a penalty of $20 per day for each day your return was late.

The maximum penalty won’t exceed $10,000 or 5% of your organization’s gross receipts, whichever amount is less.

If your organization’s gross receipts are greater than $1,000,000, the charge penalty will be $100 per day with a maximum of $50,000. Even with the penalty charges, if you fail to file a Form 990 for three consecutive years, your organization will lose its tax exempt status. 

It is very important to file the appropriate Form 990 on time. If you even slightly think you may have to file late, submit an Extension Form 8868 by the original deadline for a 3-month extension and to avoid penalty charges. Express990 supports each of these forms and makes filing quick and simple. Sign-up and get started with Express990.com.

For more information on extending your deadline, check out these blogs:

Top 5 Last Minute E-filing Hacks | Tax Exempt Organizations

IRS Tax Deadlines and How To Extend Them

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