Do you know that most of the small nonprofit businesses must file Form 990-N (e-Postcard)? Prior 2007 all nonprofits having annual gross receipts below $25000 weren’t required to make any yearly filings with the IRS, however, it changed in 2008. In the beginning of 2008, IRS introduced a new guideline stating that all small nonprofit organizations must file the Form 990-N.

Evolution Of Form 990-N (e-Postcard)

IRS was deeply concerned over the fact whether most of the small nonprofits were updating their new business address and other key information, which made the Congress file a resolution making it mandatory to file the Form 990-N. In addition, IRS had doubts that thousands of small nonprofits have been dissolved or closed down without informing them.

With the Form 990-N, IRS can easily maintain the up-to-date database of the primary and required information related to the active non-profit agencies as well as those which have been dissolved. Not only this will assist IRS in meeting the administrative goals, it will even come in handy for individuals or donors who want to make contributions and ensure that it is going to a recognized nonprofit agency.

Evolution Of Form 990-N (e-Postcard)

Criteria For Filing 990-N (e-Postcard)

Not all nonprofits are required to file e-postcard. There is a certain criterion that needs to be satisfied to file this form and that is gross receipts. If the gross receipts of a nonprofit are normally under $50,000, then it must file the 990-N form. Even if the gross receipts averaged to 50,000 or less in the prior three successive tax years, including the year when the nonprofit tax returns are filed, you still need to file the 990-N form.

Filing 990-N Form (e-Postcard)

It is easy and simple to file the 990-N online only if you are choosing You can e-file 990-N in 3 steps. Enter EIN, Review summary, & transmit it to the IRS. You can also print and download your accepted forms.

When you are e-filing your Form 990-N using you will be notified right away if your form was accepted or rejected. If rejected, the reason will be provided by mail as well as from the application. This ensures that you can make the correction immediately and retransmit it again at no extra cost.

Another method is using the services of IRS. Login to the IRS gov site and reading the given instructions and clicking the link that directs to the form. Once the form is loaded, you can use your EIN (Employer Identification Number) to start e-filing.

Filing 990-N Form (e-Postcard)

Time Period For Filing 990-N Form (e-Postcard)

As per the IRS rules and regulations, you need to e-file the 990-N form each year by the 15th day of the 5th month, just after the close of the tax year. Now once the e-postcard has been filed, IRS will send a notification stating whether it has rejected or accepted the form. If it is rejected, there will be instructions on what needs to be done next.

Reasons For Rejection of Form 990-N File (e-Postcard)

The following are some of the reasons on why 990-N can be rejected -

  • Not Getting Tax Exempt Status
    It is mandatory that small nonprofit organizations must apply a tax-exempt status using Form 1023 or Form 1024 from the IRS. This states the tax-exempt status and must be done before filing the Form 990-N.
  • Being Under 501 (c) (3) Category
    If a filer comes under the 501 (c) (3) tax returns, then there are chances that they must have applied for Form 1023. So, if the organization has applied for exempt filing previously, but never got the confirmation, then there is an option to select. So, if you miss checking this box, there is a huge possibility of the IRS rejecting your 990-N application.
    Visit know about how to obtain 501 c3 status?
  • Providing Inappropriate Tax Year
    It is mandatory that tax fillers need to provide the appropriate tax year of the organization and shouldn’t file the returns by modifying the organization’s tax year. In addition, the provided tax year should match with the IRS database.

Revocation of Tax Exempt Status

If nonprofits avoid e-filing the 990-N form, then they may have to bear serious outcomes and can even lead to losing the tax exemption status. Thousands of nonprofits have lost their tax-exempt status because they forgot to file 990-N.

If you fail to file for a single year, IRS will send a reminder, but if you end up failing to file for three consecutive tax years, then you will end up losing your tax-exempt status.

Now, this revocation will happen automatically and henceforth IRS won’t send any notices. If the tax-exempt status is revoked, then it means the organization is no longer eligible for federal tax exemption and cannot promise their donors that their donation will be tax deductible.

Reinstating Exempt Status

It is not the end of the road if you lose your tax-exempt status. You can still re-apply for federal tax exemption. So, it means that you need to file IRS Form 1023 again and even pay a hefty filing fee. Now, this is something that you really need to avoid as you will again need to go over the unnecessary paperwork, giving you a headache.

Frankly, it is better if you continue filing your 990-N forms each year and be in compliant with the IRS rules and regulation. Assisting you in this is e-postcard 990-N who will ensure that you never delay or make errors in your filing.

So go ahead and check out how simplifies your filing