Beginning in
2008, small tax-exempt organizations that
previously were not required to file returns may
be required to file an annual electronic notice,
Form 990-N, Electronic Notice (e-Postcard)
for Tax-Exempt Organizations not Required To
File Form 990 or 990-EZ. This filing
requirement applies to small tax-exempt
organizations for tax periods beginning after
December 31, 2006. Small tax-exempt
organizations that do not file the notice will
lose their tax-exempt status.
Small tax-exempt
organizations, whose gross receipts are normally
$25,000 or less, are not required to file Form
990, Return of Organization Exempt From
Income Tax, or Form 990-EZ, Short Form
Return of Organization Exempt from Income Tax.
With the enactment of the Pension Protection Act
of 2006 (PPA), these small tax-exempt
organizations will now be required to file
electronically Form 990-N, also
known as the e-Postcard, with the IRS annually.
Exceptions to this requirement include small
tax-exempt organizations that are included in a
group return, private foundations required to
file Form 990-PF, and section 509(a)(3)
supporting organizations required to file Form
990 or Form 990-EZ. In addition, this filing
requirement does not apply to churches, their
integrated auxiliaries, and conventions or
associations of churches.
The IRS will mail
educational letters starting in July 2007
notifying small tax-exempt organizations that
they may be required to file the e-Postcard.
The IRS is developing an electronic filing
system (there will be no paper form) for the
e-Postcard and will publicize filing procedures
when the system is completed and ready for use.
The Pension
Protection Act requires the IRS to revoke the
tax-exempt status of any small tax-exempt
organization that fails to meet its annual
filing requirement for three consecutive years.
Therefore, organizations that do not file the
e-Postcard (Form 990-N), or an information
return Form 990 or 990-EZ for three consecutive
years, will have their tax-exempt status revoked
as of the filing due date of the third year.
