5 Challenges Faced by Nonprofit Organizations

Nonprofit organizations serve a great purpose and make a difference in the community daily. In order to stay both active and effective, nonprofits have to attract supporters to their cause and then convert those supporters to become donors or members that will support their work.  

Although nonprofits serve a great purpose, they are faced with various challenges along the way. Thankfully, there is always a way to turn those challenges into opportunities. We’ve listed some of these challenges and provided you with some tips on how to turn them around and make it work for your organization:

Nonprofit Challenges

1) Retaining/Engaging Donors

Without donors, nonprofits cannot survive. The organization-to-supporter relationship is very important. Today’s donors do not want to think that all you want from them is their money. Rather than asking for money right away, find ways to engage conversations with supporters and give them an opportunity to get to know your organization and build an emotional attachment to your work and mission. These are some good ways to keep donors invested: 

• -Keep them engaged and let them know that they are part of the team. Let them know that they are an integral part to the organization. 
• -Let donors know where their money is going and what it is supporting. Give monthly or quarterly updates via email or newsletter. 

2) Lack of Resources

When finances are limited and resources are scarce, it is beneficial to form partnerships with other organizations that have the similar mission and goals. By forming and fostering these relationships, you can achieve more on a larger scale. Remember, there is strength in numbers. 

3) Adequate Funding

Acquiring the necessary funds to adequately operate your organization in its full potential may be a bit of a challenge for some groups. Organizations can solicit funding from foundations, corporations, grants, and philanthropic individuals. Reaching out to local businesses in the community along with community leaders for sponsorships or donations. 

4) Public Awareness

New non-profit groups or organizations that may not be well known in their community yet should put focus on increasing awareness about who they are and what they do. Implementing an online marketing campaign/strategy will allow for your organization to be promoted to a larger audience and can also draw the attention of potential funding sources. Utilizing social media platforms like Facebook, LinkedIn, Twitter, Instagram, and more, will also be very beneficial in reaching larger audiences. 

5) Printed Communication

The days of paper-based marketing and sales are slowly, but surely fading away. For many years, organizations depended heavily on direct mail serving as their main point of contact with current and potential donors. Although direct mail still brings in some money, it mainly targets just one age bracket, which is age 55 and over and makes it quite difficult to track who opened and read the mailer that was mailed. 

The best way to solve this problem is to move online. Instead of sending letters, send emails with an intriguing subject line and include the information that you’re trying to disseminate. Also, if your organization has a website, you can add a “Donate Now” button to your home page which will allow donors to give online. Having the capability to receive donations online can also encourage donors to set up automatic payments and donations towards your organization each month. Plus, millennials are more prone to make donations via text or online if they are contacted through that medium. 

How To Maintain Tax-Exempt Status

In order to remain as a tax-exempt organization or to receive tax deductible donations to sustain the operation of your organization, you must in good standing with the IRS. This status can be maintained by e-filing with ExpressTaxExempt. Within minutes you will be able to successfully e-file one of the forms including in our Form 990 Series or our latest release for political organizations, Form 1120-POL.

Feel free to contact our support team of e-file experts at 704.839.2321 if you have any questions or need 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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Requirements for a Properly Completed IRS 990 Form

Every tax-exempt organization required to file IRS Form 990 or Form 990-EZ must complete Parts I through XII along with a Schedule O and any other schedules applicable to your organization. The same rules apply to tax-exempt groups who aren’t required to file a tax return but choose to do so.

Submitting an incomplete 990 form is similar to filing late - it can cost you thousands of dollars in penalties and late fees or even a loss of exemption status. Here are a few guidelines from the IRS about completing a 990 return correctly.

Signature and Recordkeeping
A 990 form is never complete with a signature - a primary officer that’s filing the form usually signs the return. If you are filing on behalf of an organization, your signature is required along with the primary officer.

Your organization’s records need to be archived and accessible for the provisional administration of the Internal Revenue Code for a minimum of three years - this includes documents supporting an item of income, deduction, credit, or basis of property. It’s also helpful to keep copies of prior year tax returns for future reference or amended filings.

Rounding Off to Whole Dollars
When filing returns and schedules, exempt organizations must round off cents to whole dollars. Increase amounts with 50 cents or higher to the nearest dollar - you can also decrease to the nearest dollar for amounts with less than 50 cents. If you are adding numbers together, you should only round the total sum.

Complete All Lines
You must make an entry for each line that requires an amount or any other information, even if the value is zero. Applicable lines should not be blank unless the instructions expressly say to skip. All Form 990/990-EZ must include a Schedule O which is used to provide explanations or additional information.

Reporting Proper Amounts
Some sections require information you've reported on other IRS forms. If you realize that numbers reported are incorrect, you should enter the correct values on the 990 return and also submit an amended form with the proper information.

The IRS also asks that you not report negative numbers - you should use zero as the value unless the instructions explain otherwise. Report expenses and revenue separately and do not combine related items.

Inclusion of Activities and Items of Disregarded Entities and Joint Ventures
Organizations must report all revenues, expenses, assets, liabilities, and net assets or funds of a disregarded entity or shares of the same items from a joint venture, other investment, or arrangement treated as a partnership. You are also responsible for reporting activities of your disregarded entity or a joint venture on the appropriate parts or schedules of the 990 form.

Reporting Information from Third Parties
There are a few sections that request information you may need to obtain from a third party - this can include various things like compensation paid by related organizations; family and business relationships between officers, directors, trustees, key employees, and individual businesses they own or control, etc.

You are responsible for getting and reporting this information. If you cannot retrieve through reasonable efforts or tax extension, you can explain or give an estimate with your Schedule O.

With ExpressTaxExempt.com, our interview-style process seamlessly guides you through each section of the 990 form and automatically generates appropriate schedules based on your answers. You won’t have to worry about questions that don’t pertain to your organization, and at the end, we present your entire tax return with its proper requirements for you to transmit.

Our U.S. - based support team of e-file professionals is available for questions or assistance with accurately sending your 990 tax return to the IRS. Call us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. And we’re also available via email with support@ExpressTaxExempt.com.

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Reporting Unrelated Business Income

For some exempt organizations, generating sufficient funds sometimes requires going beyond traditional fundraisers and generous contributions.

Tax-exempt groups are eligible to participate in trades and businesses with no correlation with their exemption purpose or function to bring income.

Revenue from unrelated businesses such as operating a museum or selling products is subject to corporate income tax rates. You must report the earned income on your annual tax return and pay the tax amount on time as mandated by the federal government.

Here is some valuable information about properly reporting unrelated business income to the IRS.

IRS Form 990/990-EZ and Form 990-T
If your organization’s total gross revenue from all its unrelated trades or businesses is more than $1,000 for the tax year, you must indicate it on your 990 or 990-EZ tax return. You are also responsible for filing a separate 990-T form.

IRS Form 990-T is a tax return specifically for business income from exempt organizations. The amounts of unrelated revenue and expense you report on your 990 form are the same that you report on the 990-T. Neither form substitutes the other - the IRS requires both returns to be filed if applicable.

Important: It’s mandatory for all tax-exempt groups with unrelated business income to pay estimated taxes with their return if their tax liability is expected to be more than $500. The IRS has its Form 990-W available for organizations to figure out their estimates.

Report Unrelated Income with ExpressTaxExempt
Filing unrelated business income along with the rest of your 990/990-EZ form is quick and easy at ExpressTaxExempt.com. Once you reach the proper section, indicate that your organization filed a Form 990-T for the tax year and then enter your net unrelated business taxable income from Line 34 of your 990-T - that is it!

Keep in mind that you are responsible for separately sending a Form 990-T to the IRS, and you should complete it before entering any unrelated income amounts on your 990 form or 990-EZ. You can consult with a local tax professional about filing the 990-T return.

If you have any questions or need assistance with reporting unrelated business income on your 990 tax e-file, contact our U.S. - based customer support team at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send a request to support@ExpressTaxExempt.com.

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Group Returns for Exempt Organizations

Exempt organizations that are considered a central or parent company can file a group return with IRS Form 990 for two or more secondary or local tax-exempt organizations.

In some cases, the IRS may require the central organization to file a 990 form for itself by submitting a separate return outside of the group filing.

Subordinate Organizations
A subordinate organization can be included in a group return only if it is

• Affiliated with the parent organization during the time its tax period ends
• Subject to the parent organization's general supervision or control
• Exempt from tax under a group exemption letter that's currently in effect
• Utilizes the same tax year period as the parent organization

Each subordinate organization must annually authorize the central organization in writing to include it within the group return. It is also responsible for declaring that the information submitted to the group is accurate and complete.

Group Exemption Number
Subordinate organizations have the option to file a separate IRS 990 return on its own; however, it must still indicate that it’s involved in a group exemption. The IRS requires a 4-digit group exemption number (GEN), and group exemption name from each organization included in a group exemption.

If there are any changes to a group exemption ruling, the parent or central organization should submit an annual information update that’s required to maintain its group exemption ruling - this is a separate form not included with your 990 filing.

Group Returns with ExpressTaxExempt
Our easy-to-use service asks for your group exemption information near the beginning of the e-filing process. If you’re the central or parent organization, you can quickly and easily list all of your subordinate organizations which we'll correctly generate on your 990 form.

For any questions or assistance with e-filing a group return, or an IRS 990 series form in general, contact our U.S -based customer support team located in Rock Hill, South Carolina. We’re available at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or reach us through email with support@ExpressTaxExempt.com.

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Tips on Reporting Other IRS Filings and Tax Compliance

Within IRS 990 and 990-EZ forms, there is a section where tax-exempt organizations can report specific types of other IRS filings and tax compliance information.

Not every question from this section may apply to your exempt group, but if it is applicable, make sure your answers are as accurate as possible.

Here are a few tips on properly reporting information for a few sections regarding any other IRS filings or tax compliance applicable to your organization.

Form 1099 or Form W-2G Tax Returns
Indicate whether your organization filed any 1099, W2 or W-2G forms for the current tax year and the total number of returns reported if applicable. If your organization listed any gambling winnings, enter the number of IRS Form W-2Gs that you filed. You can also file w2 forms electronically, and file 1099 Forms electronically with our sister product ExpressTaxFilings.

Mark if your tax-exempt group was compliant with any backup withholding rules for reportable payments to vendors and reportable gaming or gambling winnings to prize winners - these payments can include nonemployee compensation, interest, dividends, rents, royalties, commissions, broker proceeds and barter exchange transactions, or reportable gross proceeds paid to attorneys.

Unrelated Business Income
Confirm if your organization filed any income and expense details from an unrelated business with an IRS Form 990-T. Revenue from an unrelated trade or business typically gets earned from an activity that normally has nothing to do with your organization’s exempt purpose, function, or mission. If applicable, enter the same amounts that you reported on the 990-T form.

Prohibited Tax Shelter Transactions, Non-deductible Charitable Contributions, and Deductible Contributions Under Section 170(c)
Report if your organization was a party to a prohibited tax shelter transaction and filed an 8868-T form. If applicable, you’ll need to document any listed confidential transaction within section 6707(c)(2).

For tax-exempt groups with gross receipts greater than $100,000, report any fundraising requests that weren’t eligible to receive any contributions deductible as charitable contributions. Failure to indicate any nondeductible contributions can lead to a $1,000 penalty or a maximum $10,000 fee.

Organizations that received any deductible contributions under section 170(c) need to report that an IRS Form 8282 was filed about the donated property details. You’re also required to enter donor of the goods, value, and services provided, any premiums paid or received funds to pay on any personal benefit contract, and indicate whether you received a charitable gift as a qualified intellectual property that produces net income.

Foreign Financial Accounts
If applicable, report the details of any bank, securities, or other financial accounts that your exempt organization owns in foreign countries. You can report any global financial information with a FinCEN Form 114.

Indoor Tanning Services
Report if your organization received any payments for indoor tanning services during the tax year and provide an explanation if you had filed a Form 720, Quarterly Federal Excise Tax Return, to the IRS. Indoor tanning services include any service using an electronic product that utilizes one or more ultraviolet lamps intended to induce skin tanning.

As mentioned earlier, not every tax-exempt organization will need to provide this type of information - consult with a tax professional if you’re not sure which sections apply to you. With ExpressTaxExempt.com, each area is presented in simple, interview-style questions so you can input answers quickly and easily, or pass through categories that don’t apply.

Our U.S. - based customer support is ready to help with technical issues e-filing your 990 tax return to the IRS - call us at 704.839.2321, Monday through Friday from 9 a.m. the 6 p.m. EST or send a request to support@ExpressTaxExempt.com.

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5 Reasons for an IRS 990 Form Rejection

As easy as it is to submit a 990 form to the IRS electronically, there are instances when your form can get rejected. At that point, it’s up to you to figure out why the IRS rejected your return and how to correct it before incurring any penalties.

The IRS can deny your 990 form for a wide variety of reasons - each tax-exempt organization can have different financial situations. But here are five of the most common reasons your 990 tax return can get rejected.

1. Organization Hasn’t Received Exemption Status
Before filing any 990 form with the IRS, your organization must have exemption status. To apply for tax exemption, you should file either IRS Form 1023 or Form 1024. Exempt organizations usually wait a full year after receiving exemption status before filing a 990 form.

2. Tax Exempt Application is Still Pending
Even if you’ve submitted a 1023 or 1024 form, your exemption status isn’t official until you get a Determination Letter from the IRS - this will confirm your tax-exempt certification along with other pertinent information.

If the IRS requests you to file a 990 form before receiving a Determination Letter, there is an option to select a pending application. Failing to indicate this option when applicable will cause a rejection.

3. Incorrect Tax Year Periods
Your tax year period, or accounting period, must match the IRS database unless the organization terminates within the reporting tax year. Some mistake their group as operating on a calendar tax year when it’s a fiscal tax year - others think they can change their tax period simply by putting the dates they desire on the tax return.

You can find your correct tax year period dates from previous 990 forms, your exemption application form, or you can call the IRS tax-exempt hotline at 877.829.5500. If you wish to change your tax year period, you must follow the procedures mandated by the IRS.

4. Exemption Status is Automatically Revoked
Failing to file for three consecutive years results in an automatic loss of tax-exempt status. Before filing a Form 990, you must reapply for exemption status with Form 1023 or 1024 and get a Determination Letter from the IRS. You can contact the IRS directly to inquire about your status before filing.

5. Duplicate Tax Return
In some cases, the IRS may already have approved a 990 return for the tax year you’re attempting to file. You might have a CPA, tax professional, or parent company that already filed on your behalf - you’ll need to clarify that information within your organization. At the very least, you can reach the IRS and ask for the date they received the filing.

With ExpressTaxExempt.com, we automatically identify the reason for a rejected return and allow you to make corrections so you can re-transmit with no extra charges - you can also re-transmit however many times is necessary.

Our U.S. - based support team in Rock Hill, South Carolina can assist you with a rejected e-file - call us 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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Tips on Completing Balance Sheets for Exempt Groups

When filing Form 990 or 990-EZ, the IRS requires that all exempt organizations complete the balance sheet included. The balance sheet roughly shows how much money or assets your organization had at the start of the year, liabilities that you may owe, and the amount of money you have at the end of the year.

The IRS won’t accept any other balance sheet except for the one included with the 990 tax return. Here are a few tips about some of the relevant sections you’re required to complete with your balance sheet.

Land, Buildings, Equipment, and Leasehold Improvements
Organizations with any costs spent on land, buildings equipment, etc., must report it - this includes assets held for investments or property used for your organization’s programs or functions. If you indicate an amount, a Schedule D is also required.

You’ll need to enter the total amount of accumulated depreciation for the asset. Enter the cost of the land, building, or equipment as your beginning of year value - subtract the accumulated depreciation from that, and you’ll have your end of year value.

Liabilities
The balance sheet requires accurate information about any debts or financial obligations responsible by your organization. A few of these can include

• Accounts Payable / Accrued Expenses - the total accounts paid to suppliers or service providers, and expenses such as salaries, payroll taxes, and interests
• Grants Payable - unpaid portions of grants and awards your organization promised to pay others or individuals
• Deferred Revenue - revenue your organization has received, but not yet earned due to method of accounting

The IRS has many other liabilities listed which you can view within its Form 990 Instruction Sheet. Not every liability may apply to your organization - consult with a tax professional for further review.

Financial Accounting Standards (SFAS 117)
Organizations that follow SFAS 117 (ASC 958) must classify and report net assets into three groups:

• Unrestricted - no donor-imposed restrictions
• Temporarily Restricted - assets may be used after a specific date or for a particular purpose or both
• Permanently Restricted - assets utilized for a specified purpose, be preserved, and not be sold, or invested in sustaining a permanent source of income

The sum of these three categories is factored with your total liabilities amount to show “Total Liabilities and Net Assets.”

Financial Statement Details
Your financial statement details should show your total revenue and total expense amounts for the year. It should also list your amount of net assets and fund balances from the beginning of the year which should be the same as the end of year value from your previous 990 return.

Report any net unrealized gains or losses, the value of services or use of donated facilities, or net prior period adjustments - these amounts will factor into your net asset and fund balance for the end of the year.

With ExpressTaxExempt.com, our user-friendly interface allows you to enter these amounts quickly and easily - you can even make changes to your balance sheet instantly. Our internal audit check also ensures that you report evenly matched net assets and fund balances.

Contact our helpful U.S. - based support team for any further questions - we’re available at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or email us with support@ExpressTaxExempt.com.

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ExpressTaxExempt Wishes You All A Happy Thanksgiving!

We’re only a couple of days away from Turkey Day and the excitement of the upcoming holidays has us counting down with anticipation. In the spirit of goodwill, we like to say “Thank You” to each of our clients who e-filed using our services this past tax season.

Whether you tried us out for the very first time or have been e-filing with us for years, we are thankful and greatly appreciative of your continued support. Any tax-exempt groups that are looking for a more quick and secure way to file, ExpressTaxExempt is your premier, IRS-authorized e-file provider!

Form 990 Series
We support tax returns for exempt organizations based on your gross receipts:

• IRS Form 990 - Required for organizations with gross receipts equal to or over $200,000 and total assets equal to or over $500,000.
• IRS Form 990-EZ - Required for organizations with gross receipts less than $200,000 and total assets less than $50,000.
• IRS Form 990-N (e-Postcard) - Required for organizations with gross receipts less than $50,000.

We also support Extension Form 8868 for tax-exempt groups applying for an automatic 3-month extension or an additional, not-automatic 3-month extension. Remember, you must e-file your extension before the original IRS deadline, and tax extensions can only extend your time to file - not to pay any owed taxes.

Why E-file With ExpressTaxExempt?
We work closely with the IRS to provide the most streamlined filing experience available. Our service boasts unique features that you won’t find anywhere else such as automatic email notifications of filing status, bulk upload of contributions, internal error checks, and free transmittal of any rejected forms.

Check out a few of our short, easy read blogs this holiday season for more information about ExpressTaxExempt.com and e-filing 990 forms with the IRS:

• ExpressTaxExempt - E-file Solutions for Exempt Organizations
• Made a Mistake On Your Form 990? We've Got You Covered!
• Expert Assistance with Premium Support
• Form 990 Instructions for Exempt Organizations
• E-file Tax-Exempt Returns from Anywhere!

As with every year, we recognize major holidays so that our staff can be with family and friends. Our Rock Hill, South Carolina, headquarters will be open on Wednesday, November 23, during our regular hours of 9 a.m. to 6 p.m. EST; you can reach for any questions or e-filing assistance at 704.839.2321.

We will close our office for both Thanksgiving Day and Friday, November 25, with only limited email support available through support@ExpressTaxExempt.com. We wish all of you a safe and Happy Thanksgiving and thank you for choosing ExpressTaxExempt for your IRS 990 e-filings.

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Final IRS Deadline for Tax-Exempt Groups is TODAY!!

The day has finally arrived for exempt organizations - the last BIG day to e-file IRS Form 990 and Form 990-EZ.

If your nonprofit or charity runs on a calendar tax year, and you filed Extension Form 8868 Part II this past August, then you have until midnight local time to complete your tax return.

Apply for Extra Time!
There may still be a chance for your tax-exempt group to e-file an IRS Form 8868 extension; however, your organization must follow a fiscal tax year with specific end dates. If your tax period ends on June 30, you’re eligible to e-file Form 8868 Part I and get an automatic 3-month extension.

If your organization’s tax year ends on March 31, and you filed an extension for the August deadline, you can e-file Form 8868 Part II for an additional, not-automatic 3-month extension. You’ll need to include a reasonable explanation why you’re requesting extra time.

Important: You can now e-file a tax extension from anywhere with your favorite iOS or Android device - download our FREE ExpressTaxExempt - Form 8868 mobile app. Tax extensions are not available for IRS Form 990-N (e-Postcard).

Benefits of E-filing with ExpressTaxExempt.com
As an IRS-authorized, e-file provider, we work closely with the IRS to provide the most streamlined filing experience. Access your account from anywhere at anytime. Our interview-style questions guide you through the entire process. We automatically generate required schedules for Form 990 and 990-EZ, and our internal audit check ensures your return is error-free. Get a printable copy of your form - even submit amended returns for prior year filings.

IRS Penalties
You must transmit your tax return by 11:59 pm local time to avoid any late penalty fees. If you have no choice but to file late, the IRS charges $20 each day your return is not sent - $100 each day if your organization’s gross receipts are greater than $1 million. Maximum penalties can go up to $50,000 or 5% of total revenues, whichever is the smallest amount.

For any questions or technical assistance with e-filing your 990 form, call our U.S. - based customer support at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or reach us 24/7 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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Principal Officer’s Role with Filing Form 990

When an exempt organization files its annual tax return, it’s typically the responsibility of the principal or primary officer to complete the filing. The officer can either finish and submit the 990 form on their own or outsource the work to a tax professional or CPA.

Whatever the principal officer decides to do, it’s important for that person to provide their signature to the tax return before it gets sent to the IRS. Here is some general information about principal officers and their role in filing the form 990 series.

Who is a Principal Officer?
A principal or primary officer can have many different titles within tax-exempt groups. It can be your organization’s current President, Vice-President, Director, Treasurer, Secretary, Chief Accounting Officer, or other corporate officers - for instance, a tax or financial administrator. People who are not officers are your regular employees or volunteers.

Does a Principal Officer have Authority to Transmit 990 Form?
With a small tax-exempt organization, the principal officer is usually the President or a Director, so that person does have supreme authority to submit to the IRS once finishing the return. For larger organizations, the officer may need approval from the President or other board members before completing the filing.

With ExpressTaxExempt.com, you can use our unique “Manage Approvers and Reviewers” feature which allows you to invite prominent members to a secure web portal via email. While there, they can review your 990 form, add comments or corrections, and e-verify with their signature. Have your entire board approve without managing multiple copies or wasting precious paper.

What Filing Details are Required About the Principal Officer?
IRS Form 990 and Form 990-EZ only ask for the officer’s name, title within the organization, and a daytime phone number. The IRS Form 990-N (e-Postcard) and Extension Form 8868 requests the same information with the addition of a mailing address.

If the primary officer is using a tax professional or a paid preparer to file the 990 series electronically, the officer is required to sign IRS Form 8453-EO. The form states that you are indeed an officer from a tax-exempt group and that you approve the return, and you give authorization for the preparer to file the form. It only requires the officer’s signature, date, and title within the organization.

Can an Officer File for Multiple Organizations?
If an officer is a primary member of each organization getting filed, then there shouldn’t be any issues. But if a principal officer of one group is filing on behalf of a different group without membership, then a signed Form 8453-EO is required from a primary officer of the different group.

ExpressTaxExempt.com lets you e-file for as many organizations as you need from just one account. We even generate your 8453-EO so you can print it, get the signature needed, and then upload the form into your account.

Call our U.S. - based, customer support team for any assistance needed with e-filing the form 990 series. You can reach us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. We also over email support with support@ExpressTaxExempt.com.

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Reporting Sales of Assets for Tax-Exempt Groups

For many tax-exempt organizations with significant gross receipts, some of that revenue may have come from the selling of assets.

An asset is usually an owned item or resource with monetary value or worth. The seller of an asset typically receives some form of cash or an equivalent, while the buyer becomes the new owner of the sold asset.

Types of Asset Sales
With IRS Form 990 and 990-EZ, the federal government requires exempt organizations to report any sale of assets occurring within the filing year. The amounts receive count as revenue; however, there are assets that the IRS specifically asks for on the form:

• Sale of Securities - Usually stocks, bonds, or options
• Sale of Other Types of Investments - Includes real estate, royalty interests, or partnership interests 
• Sale of Non-Inventory Assets - Contains program-related investments and an organization’s fixed assets in its related and unrelated activities
• Sale of Capital Gains Dividends and Distribution - Involves your organization’s share of capital gains and losses from a joint venture, limited liability company, trusts or other entities treated as a partnership

Reporting Sales of Assets
On the Form 990/990-EZ, tax-exempt organizations can use the average cost basis method to calculate its gain or loss. When selling an asset, you typically subtract your sales price from the average value of the property. If the outcome is negative, then you took a loss in that sale.

Recorded Information of Assets
Your tax-exempt group must maintain strong records of sold assets in which market quotations are not published or readily available. The information should report the following:

• Description of Asset
• Date Asset was Acquired
• Whether Asset was a Donation or Purchase
• Date Asset was Sold and to Whom
• Gross Sales Price of Asset
• Cost or Value When Asset was Acquired
• Expense of Sale and Improvements After Purchase, if applicable
• Depreciation Since Purchase, if applicable

With ExpressTaxExempt.com, you can report your organization’s sales of assets quickly and easily with our streamlined, interview-style questions. Our internal audit check will also ensure you enter all the required information before transmitting to the IRS.

Feel free to contact our U.S. - based customer support team - 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or email us at support@ExpressTaxExempt.com - for questions or assistance e-filing your IRS Form 990/990-EZ.

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E-file Tax-Exempt Returns from Anywhere!

E-file Tax-Exempt Returns from Anywhere

For those of you running small exempt organizations, you know that you’re required to file an annual tax return with IRS. Even if your nonprofit or charity brought in little or no money for the filing year, you still need to report that fact to the federal government.

Filing for tax-exempt organizations can take a lot of time and paperwork - or it used to. If your tax-exempt group makes less than $50,000 a year, you can now e-file your tax return in minutes with ExpressTaxExempt.com. And the best part - you don’t need to be anywhere near a desk or computer at all!

ExpressTaxExempt - Form 990-N App
With this FREE downloadable mobile app, you can e-file IRS Form 990-N (e-Postcard) at anytime and anywhere from your favorite iOS or Android devices and handsets. Complete the entire filing process in less than 10 minutes - all you need is your basic organization details, tax year period, and confirmation of $50,000 or less in gross receipts.

Your form is checked for any errors before you submit to the IRS, and you’ll receive an email confirmation of approval soon after transmitting your form. The information goes directly to the IRS and nowhere else. If your return gets rejected, the app identifies the mistake so you can correct it and resend with no additional charges.

ExpressTaxExempt - Form 8868 App
For other exempt organizations with gross receipts over $50,000, and you need more time to file your IRS Form 990 or 990-EZ, you can also e-file the IRS Form 8868 tax extension at your convenience from iOS and Android tablets.

You can e-file your extension in just minutes with your organization’s basic information and tax year period - you’ll also need to select which IRS form you typically file for your tax-exempt group. Like the 990-N mobile app, your return gets scanned for any mistakes, and you gain access to PDF copies of your transmitted tax form.

We’re here to offer you the easiest, most streamlined filing experience so you can stay compliant with the IRS and quickly get back to running your organization smoothly. Contact us at 704.839.2321 for any questions or help e-filing to the IRS. We’re also available 24/7 with support@ExpressTaxExempt.com.

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E-file Form 990-N Before the Year Ends!

E-file Form 990-N Before the Year Ends!

There are only two full months left within the year, and if your small tax-exempt organization needs to file a tax return, ExpressTaxExempt.com has you covered. It’s not too late to transmit your IRS Form 990-N (e-Postcard) before the end of the year!

IRS Form 990-N (e-Postcard)
The 990-N serves as an electronic notice and is for small organizations that make less than $50,000 - and that’s pretty much all you’re reporting to the IRS. There is no need for any exact amounts or schedules. The form is also electronic-only; you won’t find a paper version anywhere!

E-filing with ExpressTaxExempt.com
We make e-filing IRS Form 990-N (e-Postcard) as simple as 1-2-3! With our quick and easy steps, you can complete and transmit your form within minutes:

1. 1. Create a FREE account at ExpressTaxExempt.com
2. 2. Enter your Basic Organization Details
3. 3. Select the appropriate Tax Year
4. 4. Confirm your Gross Receipt
5. 5. Review Summary and Audit Report
6. 6. Authorize and Transmit to IRS

After submitting your 990-N, you’ll gain access to a printable copy of your e-Postcard summary and receive real-time email notification about your filing status. If the IRS rejects your e-file for any reason, we’ll identify the issue so you can make corrections and re-transmit at no extra cost!

IRS Penalties
There isn’t much of a penalty for filing Form 990-N (e-Postcard) late, which is why you still have until the end of the year to file. It doesn’t matter if your deadline was months ago - you’re still able to e-file.

There are consequences for not filing at all - fail to file for three consecutive years, and you’ll lose your tax-exempt status. You also can’t file an IRS Form 8868 extension form for e-Postcards. If you can’t file before the deadline, be sure to file as soon as possible afterward.

Important: The IRS e-filing system only supports three consecutive filing years at a time. As the new year begins, the oldest year gets dropped from support. These final two months will be the last time an organization can e-file for 2013. Your only option is to paper file IRS Form 990-EZ for any discontinued years.

Feel free to contact our U.S. - based, e-file professionals for valuable assistance or to answer questions about e-filing a 990 form. You can reach us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or 24/7 day and night with support@ExpressTaxExempt.com.

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3 Keys to Gain More Donors

3 Keys to Gain More Donors

In the nonprofit industry, it’s standard practice to request for donations or contributions - and there are many ways to secure supporters. One way that’s least chosen by small organizations is cringe-worthy persuasion.

When thinking about persuasion, most of us picture being sold something by any means necessary - or someone overly aggressive and a bit sleazy. But mainly, persuasion is getting someone to believe in something as much as you do.

And we persuade more than we probably think - any time you casually talk about your organization to someone, when explaining what you do, or when you acquire volunteers and members. Keep these three keys in mind the next time you need potential donors to become believers.

Convey Your Faith & Purpose

Remember your reasons for starting your nonprofit or charitable organization. Why do you want to make a difference or leave an impact? There clearly has to be a love or passion for the goals your organization is attempting to achieve. You don’t necessarily need to be extremely eager or excited, but understand that people can sense when you’re speaking with genuine interest rather than regurgitating facts.

Utilize the Three Cs

To keep your conversation on track, remember to be clear, concise, and calm - the three Cs. Consistency is important here - you’ll lose your potential donor by contradicting something you said earlier. Refrain from over sharing anything that doesn’t drive your point, and if you happen to be shy or an introvert, practice a few times until the process becomes natural.

Aim Beyond Donations

When speaking about your exempt organization, donations should be the bonus - not the goal. Your objective should be to get the donor enthusiastic about your nonprofit as much as you are. Nonprofits typically establish and maintain relationships with potential donors - you might not get that check right after the first meeting, but in the long run, the money will come as others begin to believe in you more.

After you’ve built donor relationships and start receiving donations, visit us at ExpressTaxExempt.com where you can enter or bulk upload your list of contributions, gifts, and grants. According to the IRS, you must report donations greater or equal to $5,000 on your IRS Form 990/990-EZ - you also need to submit donor information such as name and address for each contribution you report.

Our U.S. - based, customer support team are available to assist you with contributions or any other questions about the e-filing process. Give us a call at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. You can also contact us via email with support@ExpressTaxExempt.com.

Related Blog: Tax Tips for Nonprofit Volunteers

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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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Start a Nonprofit in 3 Simple Steps

Creating a nonprofit or charitable organization isn’t as easy as getting all your buddies together and doing community work for a noble cause. And at first glance, it may seem impossible with all the start-up costs and legal forms required.

Though it may be a challenge, and take lots of work, it is possible to break the process down into its essential phases. With these three steps, you can work towards building a recognizable tax-exempt organization sooner than you think.

File All Necessary Paperwork
Okay, take a breath and exhale - the sooner you realize you can’t avoid the paperwork, the easier you can embrace it and get done quicker. Keep in mind that there are application fees that accompany the majority of these forms, but they’re not as expensive as you may think.

You first need to register your organization’s name and receive an employer identification number - applying for an EIN is available for free on IRS website. Then, you have to get incorporated with your state; check your state’s chamber of commerce about incorporation and any associated fees.

Only after becoming incorporated with your state can you apply for tax-exempt status. Keep your ambitions and operating costs small to pay less in registration fees - you can build and grow later as time goes on. You want to file IRS Form 1023-EZ and pay the fee which was reduced this past July for small organizations.

Gain Trust & Supporters
While your applications are processing, use your waiting time connecting with potential donors and possible volunteers. No one is going to believe in your mission more than you, so prepare to have unyielding faith in what you what to accomplish and convey that to others.

By gathering contributors and volunteers at this point, you could cover some of the initial costs of your nonprofit. It’ll seem like you already have exemption status instead of a burdensome process of becoming tax exempt.

Use Community Resources
In most cases, you probably won’t be the only nonprofit or charity in your city. You may want to rely totally on fund grants, but they’re not as simple to obtain. Connect with other organizations in your community with similar missions and goals - they can share valuable insight about how your organization can best operate and possibly which grants favor your type of nonprofit.

After you build your organization and receive exemption status, you must file a tax return with the IRS each year which reports your nonprofit’s assets, structure, and activities. Based on your gross receipts, you could be fined a penalty for filing late or completely lose your tax-exempt status for not filing three years straight.

With ExpressTaxExempt.com, we offer the most streamlined, e-filing experience available - complete and transmit your tax-exempt return quicker than paper filing. No matter how large or small your organization, we have the 990 form or tax extension to accommodate your nonprofit or charity.

Assistance with the e-filing process is only a call away - contact our U.S. - based, customer support team 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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IRS Lowers Nonprofit Applications

Outstanding news for organizations trying to seek tax-exemption status - the Internal Revenue Service reduced its processing fee for Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.

The change, implemented this past July 1, slashes the original application fee from $400 to $275.

What is Form 1023-EZ
The EZ version of IRS Form 1023 was introduced back in 2014 as a quicker and simpler process for small organizations applying for exemption status under Section 501(c)(3) of the Tax Code. This shorter 3-page form made it possible for the IRS to cut down the backlog of the tens of thousands of organizations seeking tax-exemption each year.

If your organization makes less than $50,000 and have assets less than $250,000, the short application form is the best way to go. You can also learn more about what the form requires with our easy blog: Section 501(c)(3) Applications

How To Pay
The IRS states that organizations can pay their processing fees through Pay.gov when filing the application. You’ll need to provide either bank account information or a valid credit card or debit card to process the payment.

IRS Compliance
After your organization applies and receives exemption status, the next thing to do is preserve your tax-exemption by e-filing the required form each year with the IRS. Because your gross receipts are less than $50,000, you’ll need to e-file IRS Form 990-N (e-Postcard), and no other service makes that easier than ExpressTaxExempt.com.

With ExpressTaxExempt.com, all you need to enter is basic organization details, select your tax year period, and confirm your organization makes less than $50,000. Afterward, you can authorize and transmit to the IRS along with receiving real-time, email notifications of your filing status. And the best part - the process takes only minutes to complete.

If you’re nowhere near a computer, that’s not a problem. Our FREE downloadable ExpressTaxExempt Mobile app, for iOS and Android devices, allows you to e-file anywhere there is Wi-Fi access for smartphones and tablets. And the process is no different - complete your filing within minutes.

As easy as we’ve made it, we still understand the severity that comes with federal tax filings. If you have any questions or need assistance with your e-filing experience, contact our U.S. - based support team in Rock Hill, South Carolina. We’re available at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. We also offer 24/7 email messaging with 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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5 Stages of Exempt Organizations

From conception to execution, it’s a beautiful sight to behold all of your efforts coming together to establish a nonprofit or a charity organization. And once your organization meets the requirements of Internal Revenue Code section 501(a), it can become exempt from federal income taxation.

Becoming tax-exempt doesn’t happen overnight and maintaining your exemption status takes even more dedication and a thorough understanding of IRS compliance - enough that it may detract from your organizational duties. Don’t let that deter you from succeeding with your organization. You can find numerous online sources that can detail running an exempt organization and keeping up with your exempt filings.

Over the course of operating your exempt organization, you’ll get familiar with the intersecting points where you are responsible for tasks mandated by the IRS, or even the state. These points, or stages, are also referred to as the life cycle of an exempt organization.

Stage 1 - Starting Out
There are a number of things you need to have accomplished before you can even dream about being tax-exempt. Your organization has to be created under state law, an Employer Identification Number (EIN) must be issued, and your appropriate federal tax classification must also be determined.

See how to forge your beginning with our blog:
Becoming a Nonprofit or Tax-Exempt Organization

Stage 2 - Applying for Exemption
To obtain recognition of exemption from federal income tax, you are required to file Form 1023; The IRS Form 1023 is categorized as the Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code. Not as simple as you may think - before you even begin, you must have these items:

• Employer Identification Number (EIN)
• Organizing Document (Article of Incorporation, Trust Agreement, or Articles of Association, Constitution, Bylaws or Other Similar Organizing Documents
• Section 501(c)(3) Purpose and Dissolution Clause Verification (Included in Organizing Document)
• Form 2848, Authorized Representative Verification (if applicable)
• Form 8821, Tax Information Authorization

More information about the Section 501(c)(3) application can be found here:
A Form 1023 Thanksgiving

Stage 3 - Required Filings
Getting your exemption status is one thing, maintaining your exemption status is another. You are required to file your tax-exempt returns with the IRS each year.

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

You can learn about the 990 series tax forms from another one of our insightful blogs:
ExpressTaxExempt - #1 for Tax-Exempt 990 Forms

Stage 4 - Ongoing Compliance
There are basic guidelines of governance that should be instilled your organization - even if it’s operated differently from the next. You have disclosure requirements, employment taxes, and ways to avoid risking, or worse - losing, your exempt status. And it’s been proven how governance guidelines can link to how tax compliant your organization is.

Check on how compliant your governance practice could be with our blog:
Compliant or Not Compliant

Stage 5 - Significant Events
These could be your organization’s “be all, end all” moments, and can include audits, private letter rulings, and termination procedures. Nothing is meant to last too long - but if you’re on top of your financial responsibilities and IRS compliance, these events should be few and far in-between.

Know the key areas of a standard audit review with our two blogs:
Legal Audits pt.1
Legal Audits pt.2

We understand how demanding federal paperwork can be, and how it can take away precious time from strengthening the impact of your organization - which is why we offer quick and simple e-filing solutions specifically for exempt organizations. ExpressTaxExempt offers secure e-filing; your information is transmitted directly to the IRS and no one else. And your information is securely stored within our cloud-based servers that you can safely access from anywhere, anytime.

Contact our live, supportive team of e-filing professionals if you have questions or need further assistance with your e-filing experience; we’re happy to help! Call us at (704) 839-2321, Monday through Friday from 9 a.m. to 6 p.m. EST, or email us at any given time of day, even on weekends, at support@expresstaxexempt.com.

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