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Sunday, January 16, 2011

IRS EXPANDS SIMPLIFIED FILINGS FOR SMALLER EXEMPT ORGANIZATIONS

The IRS has doubled the $25,000 gross receipts threshold to $50,000 that allows exempt organizations to file an “e-postcard” Form 990-N, in lieu of a full Form 990. More particularly, an exempt organization with annual gross receipts of less than $50,000 can use the Form 990-N:

--if for the first year of existence, total gross receipts (including amounts pledged by donors) are $75,000 or less;

--if in the second or third year, $60,000 or less;

--if in fourth or later year, $50,000 or less.

Now don’t get too excited – as before, private foundations and Code §509(a)(3) organizations cannot use the Form 990-N. Nor does it relieve organizations of having to file a Form 990-T to report unrelated business income.

Foreign organizations and U.S. possession organizations cannot use this alternate filing if they have significant activity (including lobbying and political activity or the operation of a trade or business, but excluding investment activity) in the U.S.

Rev.Proc. 2011-15

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