On May 5th, 2015 we learned that the Internal Revenue Service has been planning to create a deadline for many tax-exempt organizations for a ‘Form 990’ and that deadline seems to be set for May 15th.
With such a deadline drawing close rather quickly, the large group of organizations were warned by the IRS to not include any unnecessary information on their Form 990, and to use the reliability of filling out electronic of their forms to their advantage instead of filling out the forms on paper which has multiple risks with one of the most threatening being the possible public release of any private identifiable information that you may have included on your forms.
Stripped of Tax-Exempt Title
It is by law that any organizations that fail to file their annual reports for a minimum of 3 consecutive years will unfortunately have their federal tax exemptions be taken away. The law which is The Pension Protection Act of 2006 which states that most tax-exempt organizations annually file their Form 990-series with the Internal Revenue Service. Churches and church-related organizations are not required to fill out annual forms.
Exclude SSN on 990 Forms
Generally the IRS does not require your social security number to be included on your forms and in the instructions for the form, warns filers to not include their SSNs on the 990 forms. The IRS and tax-exempt organizations are by law supposed to publicly disclose any personal information in that manner. Any public reveal of SSNs or any other private identifiable information could give criminals an opportunity for identity theft.
What is the Form 990-Series?
As listed above, tax-exempt organizations are required to fill out the Form 990. Whilst that’s established, the organizations are split in different categories as well. Organizations with average annual receipts of $50,000 or less may file a Form 990-N which asks these organizations for basic pieces of information about themselves. Tax-exempt organizations with average annual receipts of over $50,000 are required to file a Form 990 or 990-EZ but it all depends on the organizations receipts and assets.
Organizations can also request an extension if needed for multiple versions of the Form 990s yet it excludes the Form 990-N which has no availability for an extension.
Review Tax-Exempt Status Online
Upon failure of filing annual reports for at least 3 consecutive years, the Internal Revenue Service will proceed to publish the names of the organizations who have done such. Any organizations who fail to file their annual reports will promptly have their tax-exempt title stripped from them and those specific organizations will be required to file an application for exemption and pay the appropriate fees if they wish to do so.
The IRS also offers an online search tool, Exempt Organizations Select Check, to help organizations who are curious about their tax-exempt status by showing them whether or not they have had their federal tax exemptions revoked or not. The search tool also provides other benefits such as helping users more easily find possibly important information about the federal tax status and filings of certain tax-exempt organizations.
Form 990s Summarized
To summarize the topic, all versions of the Form 990 are very important to both the Internal Revenue Service who will be collecting these appropriately filed forms from most tax-exempt organizations who agree to file them electronically whilst completing the process correctly. Not every organization is fully required to file these forms, and the organizations that are required to do such will all have different tasks to go about whilst filing them such as different versions of this specific form.
Information that is to be filed with this form should be kept to a minimum of basic pieces with nothing delving too personally into your life such as SSNs and any other types of private identifiable information such as info about donors, clients or the benefactors. All information required for the forms should all be filled out electronically to keep the risk of publication of these documents at the lowest point of being a risk as possible.
These forms are extremely important so they should be filed carefully but quickly. It appears as if the Internal Revenue Service feels the same way about the way the forms should be completed as they have set a deadline for May 15th which is closing in fast. This means that most tax-exempt organizations will need to fill these forms out quickly or multiple organizations could be at a very large risk of losing their tax-exempt title and they will be required to file an application for tax-exemption and they will need to follow the process thoroughly and pay the appropriate fees if they wish to have their status renewed.
All the issues can be avoided if all of the organizations that feel as if they should file their Form 990s and organizations that are required to do so just file their forms electronically to prevent any identify theft risks, exclude most personal information whilst only including important pieces, and file them quickly and before the May 15th deadline to fully prevent themselves from getting their tax-exempt title stripped.