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Nonprofit organization tax compliance and Form 990 requirements

by | Sep 26, 2025 | Specialty Areas

Here’s what HIVE AI had to say about “Nonprofit organization tax compliance and Form 990 requirements”:

Nonprofit organization tax compliance and Form 990 requirements

Who must file in the Form 990 series

General rule

  • Most organizations exempt under IRC §501(a) must file an annual information return under §6033 on a Form 990-series return, reporting income, receipts, disbursements, and other required information. Exceptions apply (for example, churches and certain church-related organizations generally are not required to file) 1

Filing thresholds and which form to file

  • Form 990: Required if gross receipts are ≥ $200,000 or total assets are ≥ $500,000 at year end, or if the organization is in certain categories (e.g., operates a hospital facility, is a sponsoring org for donor-advised funds, is a central org filing a group return). 2
  • Form 990-EZ: Allowed if annual gross receipts are < $200,000 and total assets are < $500,000, unless the organization is otherwise required to file the full Form 990. 2
  • Form 990-N (e‑Postcard): If gross receipts are normally ≤ $50,000, the organization may file Form 990‑N, unless specifically barred (e.g., most 509(a)(3) supporting orgs; certain foreign orgs; 501(c)(23)/(24)). 2
  • Form 990‑PF: Every private foundation must file Form 990‑PF annually, regardless of revenues or assets. 2

Filing dates and extensions

  • Due date: The 15th day of the 5th month after the end of the organization’s annual accounting period (e.g., May 15 for a calendar-year organization). 3
  • Automatic extension: Form 8868 provides an automatic 6‑month extension for Form 990-series and related EO returns if timely requested under Reg. §1.6081‑9. 4

Consequences of noncompliance

Late filing penalties and required content

  • Penalties: IRC §6652(c)(1) imposes a per‑day penalty for late Form 990 filings; revocation can be considered if such penalties fail to secure compliance. 5
  • Final returns: Form 990 instructions require statements regarding disposition of assets and plan of termination for 501(c)(3)s that terminate. 5

Automatic revocation after three consecutive failures

  • If an organization fails to file a required Form 990‑series return for three consecutive years, its tax‑exempt status is automatically revoked as of the due date of the third return. After revocation, the filing requirement switches to a taxable return (Form 1120 or 1041, as appropriate), and the organization must file a return for the remainder of the revocation year. 6
  • Revocation status codes (IRS internal accounts) reflect systemic recognition; however, revocation applies once the third due date has passed even if the status code update has not yet posted. 6
  • Reinstatement: Automatically revoked organizations may apply for reinstatement under Revenue Procedure 2014‑11 procedures. 2

Recordkeeping and special compliance points

Recordkeeping to support thresholds and filings

  • All exempt organizations must maintain records under §6001 adequate to determine gross receipts and to substantiate exemption from filing or to complete required filings; filing a complete Form 990 or 990‑EZ satisfies the 990‑N electronic notice requirement and starts the assessment statute under §6501(g)(2). 7

Fundraising, contributions, and noncash property

  • Maintain samples of solicitations and fundraising materials (including online and media) and records to determine the non‑deductible portion of event payments; be aware of Form 8283 acknowledgment for donors and Form 8282 for dispositions within 3 years; complete Schedule M and Schedule B as applicable. 8

Employment and other returns frequently required

  • Even if exempt from income tax, organizations may need to file employment tax returns (e.g., Form 941) and Form 990‑T if they have unrelated business income. 2
  • Hospital organizations with noncompliant hospital facilities subject to §501(r) taxes must file Form 990‑T to report that tax; this does not replace other required returns. 9

Supporting organizations, 527s, and private foundations

Supporting organizations

  • Certain 509(a)(3) supporting organizations cannot file Form 990‑N even if gross receipts are ≤ $50,000 and must file Form 990 or 990‑EZ (subject to thresholds); review specific supporting organization filing guidance and revocation resources. 10

Section 527 political organizations

  • 527 political organizations have distinct filing thresholds; organizations under §527 generally must file 990/990‑EZ if gross receipts ≥ $25,000 for the year. 11

Private foundations

  • Private foundations file Form 990‑PF annually regardless of size and may also have excise tax reporting (e.g., Form 4720); states may accept Form 990‑PF to satisfy certain state reporting, but requirements vary by jurisdiction. 12

State charitable registration and periodic reporting

  • Many states require charitable solicitation registration and periodic financial reports; many accept a copy of the federal Form 990/990‑EZ/990‑PF with additional state-specific attachments. Verify each state’s definition of “doing business” and additional schedules, audit requirements, and monetary thresholds. 13

Practical filing tips and tools

  • Use the IRS Form 990 resources for current-year forms, e‑filing, and filing tips; small organizations should file the 990‑N via the IRS electronic system by the due date. 14
  • Form 990‑N content includes basic organizational information and the confirmation that gross receipts are ≤ $50,000; it is due the 15th day of the 5th month after year end and must be filed electronically. 15

Governance and content updates on Form 990

  • The modern Form 990 requires calendar‑year compensation reporting for certain leaders and key employees and expanded disclosures through schedules tailored to activities; organizations should use the annually updated instructions and schedules to ensure compliance. 1

Action checklist

  • Confirm exemption type and filing category (public charity, private foundation, 527, supporting org).
  • Determine gross receipts and total assets to select the correct Form 990 version.
  • Calendar the due date and file an extension (Form 8868) if needed.
  • Review unrelated business activities and hospital facility compliance to determine Form 990‑T needs.
  • Maintain solicitation, contribution, noncash property, and fundraising records to support Form 990 disclosures and donor substantiation.
  • Verify state registration and reporting obligations in each jurisdiction where you solicit or operate.
  • Monitor for automatic revocation risk if any prior year returns are missing; if revoked, follow Rev. Proc. 2014‑11 reinstatement procedures. 6 2

If you share your organization’s type, gross receipts, assets, and any special activities (e.g., fundraising events, DAF sponsorship, hospital operations, unrelated business), I can map your exact filing path, schedules to complete, and a compliance timeline.

Sources

1 – T.D. 9423 📄 Summarize
2 – IRS – Publication 4839 Annual Form 990 Filing Requirements for Tax-Exempt Organizations (Forms 990, 990-EZ, 990-PF and 990-N (e-Postcard)) 📄 Summarize
3 – IRS – Publication 4221-NC Compliance Guide for Tax Exempt Organizations (other than 501(c)(3) Public Charities and Private Foundations) 📄 Summarize
4 – Treasury Regulation 1.6081-9 📄 Summarize
5 – IRS Determination-201418058 📄 Summarize
6 – IRS IRM 5.1.11 Delinquent Return Investigations 📄 Summarize
7 – Treasury Regulation 1.6033-6 📄 Summarize
8 – IRS.gov – Instructions for Form 990 Return of Organization Exempt From Income Tax (2024) 📄 Summarize
9 – Treasury Regulation 1.6012-2 📄 Summarize
10 – IRS.gov – Annual filing requirements for supporting organizations 📄 Summarize
11 – IRS IRM 3.13.12 Exempt Organization Account Numbers 📄 Summarize
12 – IRS – Instruction 990-PF Instructions for Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation 📄 Summarize
13 – IRS.gov – Charitable solicitation – Periodic state reporting 📄 Summarize
14 – IRS.gov – Form 990 resources and tools 📄 Summarize
15 – IRS – Publication 4221-PC Compliance Guide For 501(c)(3) Public Charities 📄 Summarize

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