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IRS Updates, March 2008

The Exempt Organizations Division of the Internal Revenue Service was busy in February. It posted information on governance and related topics for 501(c)(3) organizations; announced that registration is open for one-day workshops for small and mid-sized 501(c)(3) organizations; released Form 990-N; posted a database of Form 990-N information; and released fact sheets on the complaint, examination, and compliance processes. Read on for details.

Governance and Related Topics for 501(c)(3) Organizations

Want to know what the IRS considers best practices in governance for 501(c)(3) organizations? Check out new information posted on the IRS Web site >

Workshops for Small and Mid-sized 501(c)(3) Organizations

The Exempt Organizations Division will be back on the road in April and May with its one-day workshops for small and mid-sized 501(c)(3) organizations:

  • April 1, 2, and 3, 2008—Alexandria, Virginia (Washington, D.C., metro area)
  • May 6, 7, and 8, 2008—Austin, Texas
  • May 20, 21, and 22, 2008—Columbus, Ohio
The workshops will look at the benefits and responsibilities of tax-exempt status; actions that can jeopardize an organization's exempt status; unrelated business income; employment issues; Form 990, including Form 990-N; and required disclosures, including those imposed by the Pension Protection Act of 2006. Pre-registration is required.

E-Postcard Filing for Smaller Nonprofits

If your organization is required to file a Form 990-N, you can now find it on-line at the Web site of the Urban Institute, the IRS's partner for this project. Organizations with gross receipts of $25,000 or less (except for churches and their auxiliaries and organizations included in a group return) are generally required to file the Form 990-N, which is also known as the e-Postcard.

Filing in 2008 is required for tax years that ended on or after December 31, 2007. The form is due each year by the 15th day of the 5th month after the end of an organization's tax year and must be submitted electronically. No extensions will be granted.

Although there will be no financial penalties for late filing, the consequences for failing to file at all will be dire: beginning May 15, 2010, any organization required to file a Form 990-N, 990, 990-EZ, or 990-PF that has not done so for three consecutive years will automatically lose its tax-exempt status.

In order to file a Form 990-N, the following information about your organization is needed: Employer Identification Number (EIN); tax year; legal name and mailing address; other names used; name and address of the principal officer; Web site URL, if your organization has one; confirmation that gross receipts are generally $25,000 or less; and, if applicable, a statement that your organization has gone out of business or is in the process of doing so.

You can search for and view an individual organization's Form 990-N data from the IRS Web site; scroll to the "Search for e-Postcards—Public Disclosure" section near the bottom of the page.

The IRS is asking everyone to spread the word about Form 990-N. As Lois G. Lerner, director of the Exempt Organizations Division, noted, "People do a lot to help their communities by volunteering their time and money to local charities. We're asking them to also offer a helping hand by making sure that charities know about the law change."

Fact Sheets on Complaint, Examination, and Compliance Processes

Two new fact sheets have been made available by the Exempt Organizations Division. The first is an explanation of the process undertaken by the IRS when it receives a complaint about a nonprofit organization, from initial analysis of the situation to the decision on whether to pursue an examination or not. The second outlines the differences between examinations that are used to determine tax liability and compliance checks that determine if an organization is following regulations in regards to record keeping, reporting, and other activities.

Patrick Ferraro and Suzanne E. Coffman, March 2008
© 2008, Philanthropic Research, Inc. (GuideStar)

Patrick Ferraro is a freelance writer in Seoul, Korea, and a former editor of the Newsletter. Suzanne Coffman is GuideStar's director of communications and the current Newsletter editor.
Topics: Law and Regulations