Before 2007, tax-exempt organizations with average annual gross receipts of less than $25,000 were not required to file any returns with the Internal Revenue Service (IRS). That changed when the Pension Protection Act became law, and those organizations are now required to file Form 990-N. The form is filed electronically, so it is sometimes referred to as the e-Postcard. The e-Postcard is due no later than the 15th day of the 5th month after the close of the exempt organization’s taxable year (i.e. May 15 for organizations with a December 31 year end). Starting in 2010, the broader group of organizations with gross receipts up to $50,000 will be able to file the e-Postcard.
If an organization fails to file the required return for three consecutive years, it automatically loses its exempt status under the Pension Protection Act provisions. For organizations that hadn’t been required to file returns before 2007, that means that revocation of exempt status could have occurred as early as May 15, 2010, if returns weren’t filed for 2007, 2008 and 2009. To avoid this dire outcome, the IRS has been working to give these small organizations a chance to comply. The smallest organizations have until October 15, 2010 to complete the filing of Form 990-N. More details on the program are available here. If there is a particular organization you are concerned with, the IRS posted a list of organizations that have not filed required returns here.
The e-Postcard is easy to file, requiring only eight items of basic information: employer identification number, tax year, legal name and mailing address, any assumed names, name and address of a principal officer, website address, confirmation that gross receipts are less than $25,000 and a statement that the organization has terminated or is terminating, if that is the case. It does not require detailed financial information and has been designed to provide minimal burdens to the small organizations. With loss of exempt status at risk, it’s well worth filing.