IRS Reminds Small Charities About New Filing Requirement

By Elizabeth Schwinn

The Internal Revenue Service is reminding small charities and other nonprofit organizations that, beginning next year, they will have to file information annually with the tax agency.

Charities and other tax-exempt organizations that have income of $25,000 or less per year must file the electronic notice, known as the e-Postcard or Form 990-N, to inform the IRS of their current address and contact information.

Congress added the requirement as part of the Pension Protection Act of 2006 as a way to make wrongdoers easier to find among the 1.6 million nonprofit organizations that are registered with the tax agency. Lawyers and watchdog groups say that in the past, some con artists escaped notice by hiding behind such small groups because the groups are not required to file a Form 990, the federal informational return for charities.

Organizations that fail to send the IRS an e-Postcard within three years will automatically lose their tax-exempt status and have to re-apply for exemption.

More information about the Form 990-N is available online at http://www.irs.gov/pub/irs-tege/epostcard_faqs_final.pdf.