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Filing an IRS 990 Report as an Illinois Nonprofit

Woman calculates value of receipts for taxation purposes

Nonprofit organizations, like any other business, must generally file annual returns with the IRS. Nonprofits must file these returns even though, by definition, they do not pay federal taxes except in limited circumstances (e.g., UBIT). The annual informational filing is known as a Form 990. A knowledgeable Illinois nonprofit attorney can help ensure that you fulfill your filing requirements, maintain your tax-exempt status, and otherwise do not run afoul of federal regulations.

Form 990 is more than a tax return

Beginning in 2009, the IRS changed the filing requirements for nonprofits. Form 990 allows the IRS and the general public to evaluate a nonprofit’s operations and includes information about the organization’s mission, programs, and finances. The filing has much to do with governance beyond finances and is thus more than merely an accounting function. It is strongly encouraged that nonprofits retain the help of a business lawyer with experience helping nonprofits to correctly and completely file the form. Form 990s are obtainable by the public and are often viewed by prospective donors and others.

Who must file a Form 990?

The IRS has guidance on which form your organization will need to file. Most federally tax-exempt organizations that generate more than $50,000 a year in gross receipts must file a Form 990 or Form 990-EZ. Organizations that generate $50,000 or less a year in gross receipts must file a Form 990-N (e-postcard). Private foundations file Form 990-PF.

Organizations that do not need to file a Form 990 include churches, missions, missionary organizations, and religious schools; subsidiaries of other nonprofits covered by a group return; many government organizations; and state institutions that provide essential services.

When is Form 990 due?

The form is due every year on the 15th day of the 5th month after the end of the organization’s taxable year. If your organization follows the typical January 1 – December 31 calendar year, then your Form 990 is due on May 15.

What if my organization does not file a Form 990?

If your nonprofit fails to file a Form 990 for three years in a row and is required to do so, you will lose your tax-exempt status. There is no appeals process for the automatic loss of tax-exempt status. Thousands of nonprofits lose their tax-exempt status every year because they fail to file their Form 990s.

Small nonprofits may still need to file a Form 990-N

There is a minimum size for nonprofits to necessitate filing a Form 990. Small tax-exempt organizations, those whose gross receipts are typically $50,000 or less, are not required to file a Form 990 or Form 990-EZ. However, small tax-exempt organizations that choose not to file a Form 990 are now required to file a Form 990-N with the IRS annually. Form 990-N must be completed and filed electronically online through the IRS submission website. Form 990-N is a much more simplified form than the regular Form 990.

Organizations that are included in a group return, private foundations required to file the Form 990-PF, and section 509(a)(3) supporting organizations that are required to file either Form 990 or Form 990-EZ are not required to file Form 990-N. Additionally, the Form 990-N filing requirement does not apply to churches and related associations.

Our Experienced Illinois Non-Profit Lawyers are Here to Help You Further Your Mission

If your church, religious organization, or other non-profit organization faces legal issues in Illinois, get a seasoned and professional opinion on how to proceed by contacting the Chicago non-profit attorneys at MacDonald, Lee & Senechalle in Hoffman Estates at 847-310-0025 and in Des Plaines at 847-298-5030.

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