Form 990 is an annual information return that most tax-exempt organizations use to report their activities, finances, and other information to the IRS. Most organizations must file if they have $200,000 or more in gross receipts or $500,000 or more in total assets. Organizations with gross receipts normally of $50,000 or less may generally file the simpler Form 990-N. Organizations with $1,000 or more of gross income from an unrelated business generally must also file Form 990-T. Churches, private foundations, and some other organizations have different filing requirements. Some organizations are also exempt from filing based on their type or activities.
Form 990 gives the IRS and the public a broad picture of an organization’s operations. It reports the mission, major programs, revenue, expenses, assets, liabilities, grants, fundraising, unrelated activities, compensation, and financial-statement information. It also asks about governing bodies, independence, conflicts of interest, document-retention practices, management companies, joint ventures, foreign activities, tax-exempt bonds, related organizations, and transactions with interested persons. Required schedules add detail about contributors, lobbying, grants, fundraising, hospitals, noncash gifts, liquidation, and related entities. This reporting structure supports nonprofit transparency, although contributor names and addresses generally receive special protection.
Under section 6104, an organization’s annual return generally must be available for public inspection for three years from the later of the filing deadline, including extensions, or the actual filing date. The IRS and organization generally disclose the return, schedules, and attachments, except for information the law permits withholding, such as contributor names and addresses for most nonprivate-foundation organizations.
Form 990 is the full annual return. Form 990-EZ may generally be used when gross receipts are less than $200,000 and year-end total assets are less than $500,000. Form 990-N is an electronic notice generally available to organizations whose gross receipts are normally $50,000 or less. Private foundations and section 4947(a)(1) trusts treated as private foundations generally file Form 990-PF.
While Form 990 focuses on exempt activities, Form 990-T applies to taxable income unrelated to the organization’s mission. Organizations choosing to file a full Form 990 must complete the entire return and required schedules.
The form reports nonprofit financial information under rules different from Nonprofit vs For-Profit Accounting. An organization generally uses its regular accounting method, but Form 990 compensation reporting commonly uses the calendar year ending within the organization’s tax year. Disregarded entities are generally reported as part of the parent, while partnership joint ventures pass through the organization’s proportionate activities and items.
Part IV identifies schedules triggered by particular activities or transactions. Parts III, VIII, and IX show whether programs, revenue, and expenses are accurately described and properly classified. Part V addresses other federal filings, including employment returns, foreign accounts, prohibited tax-shelter transactions, and Form 990-T compliance. Part VI focuses on nonprofit governance, including independence, relationships, management companies, significant asset diversions, policies, compensation procedures, and joint ventures. Part VII reports officers, directors, trustees, key employees, highly compensated employees, and independent contractors. Parts IX and X provide functional expenses and balance-sheet information. Schedule L, Schedule R, Schedule A, and Form 990-T may require further reconciliation.
A Form 990 is generally due by the 15th day of the fifth month after the accounting period ends, which is May 15 for a calendar-year organization. Form 8868 can request an automatic extension. Under section 6652(c)(1)(A), late filing generally costs $25 per day, capped at the lesser of $13,000 or 5% of the organization’s total gross receipts for the year. If gross receipts exceed $1,309,500, the rate is $130 per day, capped at $65,000. Incomplete, inaccurate, or required-but-paper-filed returns can also be treated as failures. Responsible persons may face $10 per day, capped at $6,500. Willful failures may trigger criminal penalties under sections 7203, 7206, or 7207.
Failure to file the required annual return or notice for three consecutive years automatically revokes section 501(a) exemption beginning after the due date for the third filing. Reinstatement requires an application, although retroactive reinstatement may be available for reasonable cause. Record retention is a separate issue from any Statute of Limitations analysis; supporting records are generally kept for at least three years after the later of the return’s due date or filing date, unless longer retention is necessary.
Form 990 is due on the 15th day of the fifth month after the accounting period ends. A calendar-year organization generally files by May 15. Form 8868 may request an automatic extension, but the filing obligation remains.
An organization whose gross receipts are normally $50,000 or less generally may file Form 990-N instead of Form 990. Churches, supporting organizations, private foundations, and other exempt categories may have different rules or mandatory filing requirements.
Yes. Form 990, schedules, and attachments generally must be available for public inspection for three years. Most organizations may withhold contributor names and addresses, but section 527 political organizations generally have broader disclosure obligations.
No Form 990 schedule replaces Form 990-T for reporting unrelated business income. An organization with $1,000 or more of gross income from an unrelated trade or business generally must file Form 990-T in addition to its required Form 990.
For more than four decades, Bennett Thrasher has provided businesses and individuals with strategic business guidance and solutions through professional tax, audit, advisory, and business process outsourcing services. Contact Alana Mueller, partner in Bennett Thrasher’s nonprofit accounting practice, or call us at 770.396.2200.
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