Introduction to IRS 990-EZ
The IRS 990-EZ is an annual information return that most tax-exempt organizations, non-profits, and charities must file with the Internal Revenue Service. The purpose of this form is to provide the IRS with information about the organization's financial activities, governance, and compliance with tax laws.
The 990-EZ form is used to report the organization's income, expenses, assets, liabilities, and other relevant financial information. It also requires disclosure of certain governance and management practices, such as the composition of the board of directors and the process for setting compensation.
Who Must File the 990-EZ
Most tax-exempt organizations with annual gross receipts of $200,000 or less and total assets of $500,000 or less are eligible to file the 990-EZ. However, some organizations, such as churches and certain government entities, are exempt from filing the 990-EZ or any other annual information return.
Organizations that are required to file the 990-EZ must do so by the 15th day of the 5th month after the end of their tax year. For example, if an organization's tax year ends on December 31, the 990-EZ must be filed by May 15 of the following year.
Preparing to File the 990-EZ
Before filing the 990-EZ, organizations should gather all necessary financial records and information, including their financial statements, balance sheet, and income statement. They should also review the IRS instructions for the 990-EZ and ensure that they have all required documentation and information.
Organizations can file the 990-EZ electronically or by mail. Electronic filing is generally faster and more convenient, and it can help reduce errors and processing time.
Completing the 990-EZ Form
The 990-EZ form consists of several parts, including a summary of financial activities, a balance sheet, and a statement of program service accomplishments. Organizations must provide detailed information about their financial activities, including revenue, expenses, assets, and liabilities.
Organizations must also complete a schedule of contributors, which lists all donors who contributed $5,000 or more during the tax year. This information is used by the IRS to verify the organization's tax-exempt status and to ensure compliance with tax laws.
Consequences of Failing to File the 990-EZ
Organizations that fail to file the 990-EZ or file it late may be subject to penalties and fines. The IRS may also revoke the organization's tax-exempt status if it fails to file the 990-EZ for three consecutive years.
In addition to penalties and fines, failure to file the 990-EZ can also damage an organization's reputation and credibility. Donors and other stakeholders may view an organization's failure to file the 990-EZ as a sign of poor governance or financial mismanagement.
Frequently Asked Questions
What is the purpose of the 990-EZ form?
The 990-EZ form is used to provide the IRS with information about a tax-exempt organization's financial activities, governance, and compliance with tax laws.
Who is required to file the 990-EZ?
Most tax-exempt organizations with annual gross receipts of $200,000 or less and total assets of $500,000 or less are required to file the 990-EZ.
What is the deadline for filing the 990-EZ?
The deadline for filing the 990-EZ is the 15th day of the 5th month after the end of the organization's tax year.
Can I file the 990-EZ electronically?
Yes, organizations can file the 990-EZ electronically or by mail. Electronic filing is generally faster and more convenient.
What happens if I fail to file the 990-EZ?
Organizations that fail to file the 990-EZ or file it late may be subject to penalties and fines, and may also have their tax-exempt status revoked.
How do I get an extension to file the 990-EZ?
Organizations can request an automatic 6-month extension to file the 990-EZ by submitting Form 8868 to the IRS.