It is a relief for many organizations to learn that IRS Form 990, the annual "Return of Organization Exempt From Income Tax," is not required when gross receipts are less than $25,000. It may be a better idea to file a "blank" Form 990, however, than not to file at all:
1) In some cases, the IRS deletes organizations that do not
file from their annual list of qualified charities
(Publication 78).
2) The annual 990 is a very good way to notify the IRS of
changes in your organization's address, etc.
3) Filing a blank Form 990 gives your organization a "paper
trail." When a new president or treasurer takes office, he
or she will be able to tell at a glance that IRS filings are
all up-to-date.
Most important of all, the normal IRS three-year "statute of limitations" is triggered by the filing of a return. If your group does not file a 990 or 990-EZ, the three year period never starts, the statute never closes, and there is no limit on how far back the IRS can go in an audit situation. If an organization files Form 990 or 990-EZ, even though not required to do so, the statute of limitations will usually begin to run.
To file a "blank" return, complete all the identifying information at the top of the return, check the box indicating that gross receipts are normally less than $25,000, sign and date the return, and send it to IRS, Ogden Service Center, Ogden, Utah, 84201-0027. Be sure to make a copy for your own records.
NOTE: The Advisory Committee on Tax Exempt and Government Entities, a citizens group
that advises the IRS, recently made the following recommendation:
"Lower the Form 990 filing threshold to $5,000. Require charities, notAs of January, 2006, this recommendation was still pending at the IRS.
otherwise exempt from the Form 990 filing requirement and having gross receipts between $5,000 and $25,000, to complete and submit a modified version of the top section of Form 990-EZ. The ACT recommends that the Secretary of the Treasury rescind the discretionary exemption for charities with gross receipts normally below $25,000 and reinstate the $5,000 statutory filing threshold. Charities with gross receipts between $5,000 and $25,000 would be required to file basic identifying information only."
This page last updated January, 2006
Employment
Taxes and Forms for Employers
Maintaining
Exempt Status
Home