IRS Form 990 – Returns of Organizations Exempt from Income Tax

January 13, 2011

Purpose of the IRS Form 990:

IRS Form 990 is used by exempt organizations, nonexempt charitable trusts and 527 political organizations to satisfy the information and reporting requirements under I.R.C. 6033.

Filing Deadline:  IRS Form 990 must be filed by the 15th day of the 5th month after the organization’s accounting period ends.  The following are examples of accounting periods and related filing deadlines:

  • Accounting period ends December 31:  Filing deadline is May 15
  • Accounting period ends September 30:  Filing deadline is February 15

Extensions are available.  Use IRS Form 8868 to request an automatic three-month extension of time to file.  This form may also be used to request an additional, non-automatic, three-month extension if the original three-month extension was not sufficient.  The non-automatic extension request must be accompanied by information setting froth reasonable cause for the additional time requested.

Organizations exempt under I.R.C. 501(c)(3) must also file Schedule A to Form 990.

The filing requirement applies to all 501(c)(3) organizations, unless limited exceptions apply.  Statutory and regulatory exemptions apply to the following:

  • Churches and related organizations (I.R.C. 6033(a)(3)(A)(i))
  • Organizations that are not private foundations with annual gross receipts of $5,000 or less (I.R.C. 6033(a)(3)(A)(ii))
  • Religious orders (I.R.C. 6033(a)(3)(A)(iii)

Organizations that are exempt from filing Form 990 must still file the “Post Card” return Form 900-N.

Organizations that fail to file the information return for three consecutive years lose their 501(c)(3) exemption.  See I.R.C. 6033(j).

There are other penalties that apply to failure to file.  See I.R.C. 6652(c)(1).

Matters relating to Schedule K:

Schedule K (Form 990) is used by an organization that files Form 990 to provide certain information about the organization’s outstanding liabilities associated with tax-exempt bond issues.

Part II, Line 11 (Final Allocation):

“Has the final allocation of proceeds been made?” goes towards the requirement in Section 1.148-6 of the Regulations which provides that proceeds of a bond issue that are expended for a governmental purpose are no longer treated as gross proceeds of an issue (and are therefore no longer subject to rebate or yield restriction).  The borrower completing Schedule K will check “Yes” for line 11 if the bond proceeds have been spent, and should be in a position to prove such expenditure by records such as trustee statements or otherwise. Allocation of bond proceeds to expenditures is related to allocation that may be done in the tax agreement (or no-arbitration certificate) at the beginning of the project. Such allocation in the tax document will assist in identifying how moneys from various sources are expected to be used. For information concerning allocation of proceeds to expenditures, see Section 1.148-6 of the Regulations. See also page 80 of Fundamentals of Municipal Bond Law (2007 Ed.).

Other Matters

See Rev. Proc. 95-48 for information regarding filing exemptions for governmental units and affiliates of governmental units.

See Rev. Proc. 2015-2 VCAP for organizations that have lost their 501(c)(3) status for not filing Form 990, and the impact on the tax status of section 145 bonds.