Form 990-EZ for 501(c)(3)(6)

[Patrick Michael]

I'm hoping someone with non-profit experience can help out. A potential client contacted me about filing their 990-EZ. They filed their initial 990-EZ for the tax year ending 12/31/10 and have not filed for 2011 or 2012. The treasurer of the organization claims the attorney who helped them set up LLC told them they need to file every two years after the initial filing. Not sure if he misunderstood or I'm missing something. Everything I have found says an annual return is needed. Their gross receipts have been less $50,000 a year so they qualify to file a 990-N instead of the 990-EZ. Can they still file the 990-N even if the returns are past due?

Thanks.

[ILLMAS]

Most small tax-exempt organizations whose annual gross receipts are normally $50,000 or less are required to electronically submit Form 990-N, also known as the e-Postcard, unless they choose to file a complete Form 990 or Form 990-EZ instead.

If you do not file your e-Postcard on time, the IRS will send you a reminder notice. There is no penalty assessment for late filing the e-Postcard, but an organization that fails to file required e-Postcards (or information returns – Forms 990 or 990-EZ) for three consecutive years will automatically lose its tax-exempt status. The revocation of the organization’s tax-exempt status will not take place until the filing due date of the third year.

Due Date of the e-Postcard

The e-Postcard is due every year by the 15th day of the 5th month after the close of your tax year. For example, if your tax year ended on December 31, the e-Postcard is due May 15 of the following year. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day. You cannot file the e-Postcard until after your tax year ends.

Tell the treasurer to send the IRS penalty bill to the attorney, if it was one year you can get by, but two years there is a very high chance your client will owe a hefty amount for late filing, 990 late fees are no joke.