Revenue, Expenses, & Grants from Program Services

The IRS requires large and mid-size exempt organizations to describe three of their most major program services when reporting Form 990 or 990-EZ tax returns.

These services typically measure or rank by the total expenses spent by the organization. If a tax-exempt group has less than three program services, they can just describe the activities of each available service.

Descriptions of program services can include many variables such as how many clients the organization served, days of care provided, publications issued, or the number of sessions held. Along with stating the objective of the service, the IRS also needs to know all revenue, expense, and grant amounts associated with each program.

Revenue
Section 501(c)(3) and 501(c)(4) organizations are responsible for reporting any income coming directly from activities of each program service. Fees for services or sales from goods related to each activity are all considered revenue. These amounts should include the program service revenue listed on Part VIII, Column A, Line 2 of the 990 form; it can also contain other amounts from Part VIII, Line 1 through 3 such as related or exempt function revenue.

Important: Revenue should also include any unrelated business income from activities exploiting an exempt function - advertising in a journal would be an example. You shouldn’t combine any charitable contributions and grants as revenue coming from program services.

Expenses & Grants
For each program service listed on Part III, Line 4a through 4c, 501(c)(3) and 501(c)(4) organizations have to enter total expenses that you reported on Part IX, Column B, Line 25. And list the total grants and allocations within those expenses that are marked on Part IX, Column B, Line 3 through 11 of the 990 form.

Other Program Services
If you have more than three significant program services, you can continue to report on the Schedule O. The IRS won’t require a detailed description of these other services like it did the first three. But you are responsible for listing the total revenues and expenses - including grants - exactly how you did with your organization’s larger program services.

With IRS-authorized ExpressTaxExempt, organizations can easily enter information about their program services in minutes. Our 990 form e-file application also generates any additional services onto your Schedule O and allows you to enter revenue, expenses and grant amounts for each entry.

Speak with your local tax professional or advisor if you have any detailed questions about your organization’s program services. For any questions or assistance with reporting your program activities with our e-file service, contact our US-based customer support team at 704.839.2321 or email us with support@expresstaxexempt.com.

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Simple Ways to Prevent Hefty IRS Penalties

No matter how much we all loathe it, there’s just no way to recover late filing fees and penalties paid to the IRS. In most instances, the IRS evaluates penalties on a case-by-case basis if you can provide valid reasons.

The best way to prevent any late fees with the IRS is to file your exempt organization’s annual tax return on time. But not everything goes that smooth in life, and that’s understandable - so here are a couple of ways you can still avoid late filing penalties.

Automatic & Not-Automatic Extensions
Without a doubt, the most simple method of preventing substantial fees from the IRS is e-filing an Extension Form 8868. You can get up to six months of extra filing time by submitting both parts of the form:

• Part I - Automatic 3-Month Extension
• Part II - Additional, Not-Automatic 3-Month Extension

The IRS Form 8868 tax extension only extends your time to file - not the time to pay any owed taxes. You must remember to file your tax return by the extended due date, and you are still responsible for paying any estimated taxes by the original deadline.

Important: Form 8868 cannot extend the deadline for small tax-exempt groups filing IRS Form 990-N (e-Postcard).

Facts & Circumstances
If you missed the chance to e-file a tax extension, your only option is to submit IRS Form 990 or Form 990-EZ as soon as you possibly can. You’ll still get penalized each day your return is late; however, you can use a Schedule O to try to reduce or eliminate fees.

The IRS looks for what they call “facts and circumstances,” which are reasonable explanations about why your organization filed late. They specifically want valid answers to the following:

• What caused the organization from requesting an extension of time
• How the organization utilize conventional business care and prudence, and is not neglectful or careless
• What steps the organization is taking to avert the same situation from happening again

Even though the process may take some time, providing these explanations could put you in a better position of leverage. In some cases, the IRS can completely waive penalties if delinquency was due to uncontrollable events - check with your local tax professional for more details.

While facts and circumstance can potentially save you, it’s still not as easy as filing an extension. With ExpressTaxExempt.com, you can complete and transmit your extension form, and get approved within minutes. And with our FREE downloadable ExpressTaxExempt - Form 8868 mobile app, you quickly and securely submit an extension on the go from your favorite iOS or Android device.

Our U.S. - based support team is available for any questions or assistance with e-filing - give us a call at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send a message with support@ExpressTaxExempt.com.

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Just the Facts: What to Know About Amended Returns

As much as we all tend to make tax season scary and stressful at times, tax returns aren’t necessarily the “be all, end all” threat we perceive.

It’s true that you should file on time with the most accurate information, but a couple of mistakes isn’t going to have the IRS shutting down your organization.

There are a few ways you can protect the integrity of your organization and correct any misinformation sent to the IRS. One of those safeguards is filing an amended return, but before you do, here are some facts about submitting amendments to the IRS.

Fact #1 - After submitting a tax form, exempt organizations can file amended returns to update or correct information from the previously filed tax return for the same tax period.

Fact #2 - Amendments are only available for IRS Form 990 and Form 990-EZ - it is not possible to file an amended return for IRS Form 990-N (e-Postcard).

Fact #3 - Amended Returns must contain all the information required by the original form, instructions, and schedules; you can’t just enter your corrections and then file - each section of the return must be redone.

Fact #4 - To indicate your form is an amended return, you can check the “Amended Return” box in Item B on the first page of your 990 form. You also need to enter on Schedule O which parts and schedules were corrected along with descriptions of the changes.

Fact #5 - If you need a copy of your organization’s previously filed tax return, you can submit IRS Form 4506, Request for Copy of Tax Return.

Fact #6 - Your approved amended return must be available to the public within three years of the amended filing date or three years after the original IRS deadline of your form - whichever is later.


E-file Amended Returns with ExpressTaxExempt
At ExpressTaxExempt.com, transmitting amended returns are incredibly faster than paper filing. With our cloud-based technology, everything from your original return is carried over to the amended one - your responsibility is just to enter the corrections.

Important: “Amended Return” is an option with ExpressTaxExempt.com only if you e-filed your original return with our services, and the IRS accepted it.

With three small steps, your organization can amend its tax return from the Dashboard screen of your account:

1. 1. Click the “Amended Return” button
2. 2. Enter a short explanation why you're amending the return
3. 3. Click the “Continue” to make your changes

All of your changes are automatically recorded to your Schedule O along with the required check mark on the first page of the form. Once done, you can transmit your new return and receive real-time email notifications of your filing status.

Contact our U.S. - based, customer support team for any questions or assistance needed with e-filing. Call at 704.839.2321, Monday through Friday from 9 a.m to 6 p.m. EST or send an email to support@ExpressTaxExempt.com.

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Made a Mistake On Your Form 990? We've Got You Covered!

You completed and transmitted your tax return on time - even better, the IRS accepted your form on the first attempt with no questions asked. However, after looking through your copy, you noticed that you misspelled a donor or employee name, your mission or program service statement isn’t entirely correct, or you forgot to include a last-minute fundraising event.

No matter what the mistake is, you need to make corrections and transmit this new information to the IRS as soon as possible. With ExpressTaxExempt.com, we have you covered with our amended return support for IRS Form 990 and Form 990-EZ!

Amended Returns
Your organization can e-file an amended return to either update or add information to a previously accepted form for the same tax year. IRS Form 990/990-EZ are the only returns applicable to amendments, and the updated returns must contain all the information requested by the form and instructions - not just the corrections.

If you need a copy of your organization’s previously filed return, you can submit IRS Form 4506, Request for Copy of Tax Return - you can also visit the IRS website for information about getting blank tax forms. Your amended return is required to be available for public inspection three years after the amended filing date or the original filing deadline - whichever is longer.

E-filing Amended Returns with ExpressTaxExempt
To e-file an amended return with ExpressTaxExempt.com, you first must have e-filed your original tax return with our services. Also, the IRS needs to have accepted your original form - if you received a rejection, you can quickly make corrections and re-transmit your rejected form.

Before starting an amendment, you’re required to explain your reasons for changing your original return - this information can also include which parts and schedules of the original form that need changes along with descriptions of your changes.

You won’t need to start entirely over with an empty return. Our cloud-based technology carries over everything from your original form to your amended return - all you need is to go through your completed sections and make the necessary changes. Any new text provided or corrections made are automatically tracked and entered on Schedule O of your amendment.

Once you’ve completed your updates, you can transmit your form to the IRS. You can assure that your new return is an amendment as the “Amended Return” box is check marked in Item B of the Heading on Page 1 of your return.

If you have any questions or need assistance with the e-filing process, feel free to contact our U.S. - based customer support at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. We also offer email support with support@ExpressTaxExempt.com.

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