IRS Filing Deadline Is Fast Approaching for Small Charities

May 7, 2008, 9:27 pm

Next week comes the first annual deadline for the smallest nonprofit groups to comply with a new federal requirement to file annual information with the Internal Revenue Service, and a group of accountants in Connecticut want to make sure organizations are ready.

New tax law requires nonprofits groups with $25,000 or less in annual revenue to file the new Form 990-N informational tax return by the 15th day of the fifth month after the end of a fiscal year. For those operating on a calendar year, for example, the deadline would be May 15.

Previously, small groups were exempt from filing any returns with the IRS. To inform them of the new requirement, the IRS sent out 650,000 letters last year, and posted an online question-and-answer page meant to help organizations comply.

But Adam P. Cohen, a West Hartford accountant, thinks more ought to be done to get the word out about the new rule and to teach organizations how to file. So, in conjunction with the Connecticut Society of CPAs and a local group that offers pro-bono accounting services, Mr. Cohen has publicized information about the Forms 990-N, and is running free clinics this week to assist in their preparation.

Charity officials can visit the clinics on Friday afternoon at any of three libraries around the state to learn how to file the online Forms 990-N, also known as “e-postcards.”

The form requires only basic information, such as the name of a principal officer, a mailing address, and confirmation that gross receipts total less than $25,000. Still, some charity observers worry that many small organizations may be intimidated by the federal forms, and that many more may not even be aware they exist.

If an organization fails to file the Form 990-N three years in a row, the IRS will automatically revoke its tax-exempt status.

“My suspicion is that there are many micro-nonprofit groups that don’t know about the requirement,” Mr. Cohen says. “You might have the checkbook for your kid’s soccer league, but the information about your responsibilities has not reached you.”