Can charitable organizations be subject to the IRS filing threshold for information returns?
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Yes, charitable organizations can be subject to the IRS filing threshold for information returns. The filing requirements for charitable organizations, which are typically tax-exempt under section 501(c)(3), are governed by Internal Revenue Code section 6033 and related Treasury Regulations.
1. Filing Thresholds and Requirements
1. General Rule for Filing- Every organization exempt from taxation under section 501(a), including charitable organizations described in section 501(c)(3), is generally required to file an annual information return (Form 990, 990-EZ, or 990-N) with the IRS, stating their gross income, receipts, disbursements, and other information as prescribed by the Secretary.
2. Mandatory Exceptions- Certain organizations are mandatorily excepted from the filing requirement, such as churches, their integrated auxiliaries, and conventions or associations of churches, as well as organizations with gross receipts normally not more than $5,000 (other than private foundations).
3. Discretionary Exceptions- The Secretary may relieve other organizations from filing if it is determined that such filing is not necessary for the efficient administration of the internal revenue laws.
4. Gross Receipts Threshold for Filing- For most organizations (other than private foundations and section 509(a)(3) supporting organizations), if their annual gross receipts are normally not more than $50,000, they are not required to file Form 990 or 990-EZ, but must instead file Form 990-N (e-Postcard).- The $50,000 threshold is determined as follows: - For organizations in existence for one year or less: gross receipts of $75,000 or less in the first year. - For organizations in existence more than one year but less than three years: average annual gross receipts of $60,000 or less over the first two years. - For organizations in existence for three years or more: average annual gross receipts of $50,000 or less over the immediately preceding three years.
5. Filing Form 990-N (e-Postcard)- Organizations that are not required to file Form 990 or 990-EZ due to the gross receipts threshold must file Form 990-N (e-Postcard) annually. This form requires basic information such as the organization’s legal name, address, principal officer, TIN, website, and confirmation that gross receipts are $50,000 or less.
6. Consequences of Not Filing- If a charitable organization fails to file the required annual return or notice (Form 990, 990-EZ, or 990-N) for three consecutive years, its tax-exempt status is automatically revoked as of the due date for the third return.
2. Summary
Charitable organizations are indeed subject to the IRS filing threshold for information returns. If their gross receipts are normally $50,000 or less, they are not required to file the full Form 990 or 990-EZ, but must file the Form 990-N (e-Postcard) instead. Failure to comply with these filing requirements can result in automatic revocation of tax-exempt status.
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