Many more tax-exempts can file e-Postcard instead of Form 990 for 2010 under new rule

IRS has raised the annual gross receipts threshold at which tax-exempt organizations (other than private foundations and Code Sec. 509(a)(3) supporting organizations) must file Form 990, Return of Organization Exempt from Income Tax, from $25,000 to $50,000, for tax years beginning on or after Jan. 1, 2010. Thus, under this new rule, most tax-exempt organizations whose gross annual receipts are normally $50,000 or less can file the simpler Form 990-N (Electronic Notification e-Postcard).

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Most tax-exempt organizations, other than churches, must file with IRS an annual Form 990, Form 990-EZ (Short Form Return or Organization Exempt From Income Tax), or Form 990-PF (Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation).  , IRS provided that exempt organizations, other than a private foundation, whose annual gross receipts aren't normally in excess $25,000 do not have to file Form 990, but instead can file the simpler Form 990-N, the e-Postcard which only requests eight items of information items. ( Rev Proc 83-23, 1983-1 CB 687 ) IRS provides similar exceptions for tax-exempt foreign ( Rev Proc 94-17, 1994-1 CB 579 ) and possession organizations ( Rev Proc 2003-21, 2003-1 CB 448 ).

Form 990-series information returns are due on the 15th day of the fifth month after an organization's fiscal year ends.

Non-church exempt organizations that fail to file for three consecutive years automatically lose their tax-exempt status. In an effort to help them keep their status, IRS offered a one-time, two-part filing relief program in July of 2010 to bring small organizations back into compliance.

New simpler reporting rule. Rev Proc 2011-15, Sec. 3.01 , provides that a exempt organization (other than a private foundation or a Code Sec. 509(a)(3) supporting organization) that normally has annual gross receipts of not more than $50,000 (as described in Rev Proc 2011-15, Sec. 4 ) isn't required to file an annual return under Code Sec. 6033(a) , i.e., Form 990. Rev Proc 2011-15, Sec. 4 , provides that the annual gross receipts of an organization are normally not more than $50,000 if:

... in the case of an organization that has been in existence for one year or less, its gross receipts, including amounts pledged by donors, are $75,000 or less during its first tax year;

... in the case of an organization that has been in existence for more than one year, but less than three years, its average annual gross receipts for its first two tax years are $60,000 or less; and,

... in the case of an organization that has been in existence for three years or more, its average annual gross receipts for the immediately preceding three tax years, including the tax year for which the return is filed, are $50,000 or less.

In addition, Rev Proc 2011-15, Sec. 3.02 , provides that a tax-exempt foreign organization or a U.S. possession organization (other than a private foundation or a Code Sec. 509(a)(3) supporting organization) isn't required to file an annual return under Code Sec. 6033(a) if: (1) it normally doesn't receive more than $50,000 in annual gross receipts from sources within the U.S.; and (2) it has no significant activity (including lobbying and political activity and the operation of a trade or business, but excluding investment activity) in the U.S.

If at any time an organization ceases to meet the conditions set out in Rev Proc 2011-15 , it must file an annual return on Form 990 for the year in which it first ceased to qualify for relief under Rev Proc 2011-15 and for all later years in which the organization doesn't qualify. ( Rev Proc 2011-15, Sec. 3.04 )

Tax-exempt organizations exempted from filing an annual return under Rev Proc 2011-15 must submit a Form 990-N e-Postcard annually in electronic format. By submitting an e-Postcard, an organization acknowledges that it isn't required to file a return because its annual gross receipts are normally not more than $50,000. ( Rev Proc 2011-15, Sec. 3.03 ) Further, Rev Proc 2011-15 doesn't affect an organization's obligation under the Code to file any tax or information return other than Form 990. For example, if an organization earns sufficient gross unrelated business income, it is still required to file of Form 990-T, Exempt Organizations Business Income Tax Return. ( Rev Proc 2011-15, Sec. 5 )

Rev Proc 2011-15, Sec. 1 , provides that it doesn't apply to organizations exempt from income tax under Code Sec. 527 (i.e., political organizations).