On July 15, 2021, the IRS released an Exempt Organization Mandate that requires all Forms 990-EZ be filed electronically. The mandate is effective for filings for tax years that end July 31, 2021 (i.e., for tax years beginning August 1, 2020). Not sure what this means for your organization? Read on.
What is Form 990-EZ?
Form 990-EZ is the short form information return filed annually with the IRS by smaller tax-exempt organizations and nonexempt charitable trusts that qualify under section 501(a) of IRS Code. Organizations with gross receipts of less than $200,000 and total assets of less than $500,000 at the end of their tax year are eligible to file the “short form” 990-EZ instead of Form 990.
What does the new IRS update do?
The new IRS update[A1] requires all exempt organizations that file Form 990-EZ for tax years ending July 31, 2021 or later to file electronically. Forms 990-EZ for tax years ending before July 31, 2021 may still be filed on paper or electronically. The IRS previously issued an electronic filing requirement for all Form 990 and Form 990-PF filers unless covered by a specific exception. This new mandate expands the electronic filing requirement to those smaller organizations that file the Form 990-EZ.
More on the Form 990 that you may not have known about
The Form 990 series forms are generally available for public inspection, providing the public with one of the primary sources of information about the organization. There are specific types of organizations that are not required to file Form 990 (including 990-EZ). For example, certain religious organizations, government organizations, political organizations, and other organizations with limited gross receipts are not required to file this form. Certain exempt organizations whose gross receipts normally are $50,000 or less may file an “electronic postcard” – Form 990-N – in lieu of either Form 990 or 990-EZ.
For more information on how this new filing mandate affects your organization, or to learn more about required annual filings for nonprofit organizations, please reach out to the professionals at Law Firm For Nonprofits (LFNP). Contact us by visiting www.lfnp.com or by calling us at 818.623.9898.