IRS Reminds Tax-Exempts to File Form 990

Losing tax-exempt status can affect the ability to offer 403(b) plans.

The Internal Revenue Service (IRS) is reminding tax-exempt organizations that many have a filing deadline for Form 990-series information returns in mid-May.

Form 990-series information returns and notices are due on the 15th day of the fifth month after an organization’s tax year ends. Many organizations use the calendar year as their tax year, making May 15 the deadline for them to file for 2015. However, because May 15 falls on a Sunday, the deadline this year moves to Monday, May 16.

By law, organizations that fail to file annual reports for three consecutive years will see their federal tax exemptions automatically revoked as of the due date of the third required filing. The Pension Protection Act of 2006 (PPA) mandates that most tax-exempt organizations file annual Form 990-series information returns or notices with the IRS. The law, which went into effect at the beginning of 2007, also imposed a new annual filing requirement for small organizations. Churches and church-related organizations are not required to file annual reports.

Losing tax-exempt status can affect the ability to offer 403(b) plans. In 2014 and 2015, the IRS Employee Plans Compliance Unit conducted a project related to 403(b) plan sponsorship eligibility for organizations that lost their 501(c)(3) exempt status due to the automatic revocation for not filing a required return for three consecutive years. Some entities were unaware that their 501(c) status affected their eligibility to sponsor a 403(b) plan.

The IRS generally does not ask organizations for Social Security numbers and, in the Form 990 instructions, it cautions filers not to provide them on the form. The IRS also urges tax-exempt organizations to file forms electronically in order to reduce the risk of inadvertently including Social Security numbers or other unneeded personal information.

Organizations that need additional time to file a Form 990, 990-EZ or 990-PF may obtain an automatic three-month extension. An organization may also request an additional three-month extension; however, the organization must show reasonable cause for the additional time requested. Use Form 8868, Application for Extension of Time to File an Exempt Organization Return, to request extensions. The request for extension must be filed by the due date of the return. Note that no extension is available for filing the Form 990-N (e-Postcard).

The IRS offers an online search tool, Exempt Organizations Select Check, to help users more easily find key information about the federal tax status and filings of certain tax-exempt organizations, including whether organizations have had their federal tax exemptions automatically revoked.