
Nearly all tax-exempt organizations must file an annual return with the IRS. As a general rule, tax-exempt organizations must file a Form 990 unless they qualify to file a 990-EZ or 990-N. For several years, the smallest tax-exempt organizations (gross receipts of $25k or less) had no filing requirement. However, the IRS now requires the smallest tax-exempt organizations to electronically file Form 990-N (also called the e-Postcard).
Also any tax-exempt organization that fails to file required returns for three consecutive years, whether it be the Form 990-N, 990-EZ, or 990, automatically loses its federal tax-exempt status. If an organization loses its tax-exempt status, then it must reapply with the IRS to regain its tax exemption. Any income received between the revocation date and renewed exemption may be taxable.
If you are part of a small tax exempt organization, which has failed to file required returns for 2007, 2008, and 2009, then you are in luck. Small tax exempt organizations can preserve their status by filing returns by Oct. 15, 2010, under a one-time relief program provided by the IRS. The smallest tax-exempt organizations required to file Form 990-N can go to the IRS website and submit a simple form to bring itself back into compliance. While small tax-exempt organizations eligible for file a Form 990-EZ may participate in a voluntary compliance program (VCP), file delinquent annual returns, and pay a compliance fee.
If you don't know whehter your organizations has filed to file returns for the last three years, the IRS has posted on the following page the names and last-known addresses of these at-risk organizations, along with guidance about how to come back into compliance.
As always, we generally recommend that you contact a tax professional before doing anything.