Nonprofit Filing Exemptions
There are certain exceptions in the law for filing a nonprofit tax return. For example, the following nonprofits are exempt from the filing requirements:
- Most religious organizations, religious schools and missionary organizations.
- Subsidiaries of nonprofits that may be covered under a group return filed by the parent organization.
- Certain government corporations and state institutions providing essential services.
Nonprofit Filing Forms
Nonprofits with gross receipts of more than $50,000 must file Form 990 or 990-EZ, those with gross receipts that don’t exceed $50,000 file Form 990-N (the “e-Postcard”), and private foundations file Form 990-PF.
Filing on Time is Important
Not filing could result in monetary penalties. Even worse, if an organization fails to file Form 990 three years in a row, the IRS will automatically revoke its tax-exempt status and it can no longer receive tax-deductible contributions. There is no appeal process for this result.
Other Related Tax Filings
A tax-exempt organization may owe an “unrelated business income tax” (UBIT) for regular business activities unrelated to its charitable function. For example, if a nonprofit charges advertising in its publications, the income may be subject to UBIT.
If you need more information about nonprofits and taxes, contact an accountant who understands non-profit reporting.