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IRS Updates, October 2008: New 990-EZ Instructions, Form 990 Webinar, and Elimination of the Advance Ruling

Last month, the IRS released instructions for the new Form 990-EZ, announced a free Webinar on preparing the new 990, and dispensed with the advance ruling for 501(c)(3) public charities.

New Instructions for Form 990-EZ

Form 990-EZ itself hasn't changed much, except to incorporate schedules from the new Form 990. The filing threshold has been raised substantially, however. For the 2008 filing year (i.e., a fiscal year that begins in 2008), an organization is eligible to file the 990-EZ if its gross receipts are greater than $25,000 but less than $1 million and its assets total less than $2.5 million.

Links to the new instructions for the 990-EZ, a background paper on the form, and information on the filing thresholds through the 2010 tax year are posted on the IRS site.

Webinar on the New Form 990

On November 4, 2008, the IRS will present a free Webinar on filing the new Form 990. If you prepare your organization's return, you'll want to participate. If someone else prepares your 990, you may want to let him or her know about the Webinar.

Register for the IRS Webinar >

Elimination of the Advance Ruling

The IRS has streamlined the process of becoming a 501(c)(3) public charity. As of September 9, 2008, the service will no longer issue advance rulings. If your organization is operating as a 501(c)(3) public charity under an advance ruling, you need to check the expiration date to determine how the new procedure will affect you.

If your advance ruling expires on or after June 9, 2008, you can cross "File IRS Form 8734" off your calendar. You are no longer required to file Form 8734 to document that you meet the public support test, and your advance ruling letter is proof of your status as a 501(c)(3) public charity.

If your advance ruling expired before June 9, 2008, you must file Form 8734. Otherwise, your organization will be reclassified as a 501(c)(3) private foundation, making it subject to excise taxes and restrictions on its activities. (For information on the differences between the two types of charitable organizations, see "Just What Are Public Charities and Private Foundations, Anyway?")

If your organization has applied for exemption as a 501(c)(3) public charity but has not yet received a determination from the IRS, hang tight. Your application is being processed under the new rules.

More information

Suzanne E. Coffman, October 2008
© 2008, GuideStar USA, Inc.

Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter.
Topics: Law and Regulations