While 501(c)(3) organizations maintain tax-exempt status under the Internal Revenue Code, such status entails specific reporting obligations. Nonprofits, to maintain tax-exempt status in good standing, are required to file annual informational returns, state reports, donor disclosures, and other compliance reports.
Annual Federal Reporting: IRS Form 990 Series
Every 501(c)(3) organization must file an annual return with the IRS, known as the Form 990 series. The type of form depends on the organization’s size and revenue:
- Form 990-N (e-Postcard): For nonprofits with gross receipts of $50,000 or less.
- Form 990-EZ: For those with gross receipts under $200,000 and total assets under $500,000.
- Form 990: For organizations exceeding those thresholds.
- Form 990-PF: Required for all private foundations, regardless of income.
Due dates for Form 990 are the 15th day of the 5th month after the organization’s fiscal year ends (ex: May 15 for those operating on a calendar year). Failure to file 990s for three consecutive years may result in automatic revocation of the organization’s tax-exempt status.
State-Level Filings
Alongside federal requirements, 501(c)(3)s must also comply with state-level reporting requirements, which greatly differ depending on the state.
California, for instance, stipulates that nonprofits must file the following documents:
- Form 199 with the Franchise Tax Board (state information return)
- Form RRF-1 with the Attorney General’s Registry of Charitable Trusts (annual registration report)
- Form SI-100 with the Secretary of State (Statement of Information, which is filed biennially)
Each of these filings serves their purpose of ensuring transparency as well as keeping the nonprofit’s right to operate and raise funds within the state.
Donor Disclosure and Acknowledgment
501(c)(3)s are also required to provide a written acknowledgment to a donor for every contribution of $250 or more. 501(c)(3)s must report sizable donations on Form 990, Schedule B (though this is kept private for most nonprofits).
Recordkeeping and Public Disclosure
Nonprofits are required to keep accurate records of the income and expenses that come through the organization as well as the decisions pertaining to governance. Furthermore, the IRS requires 501(c)(3)s to keep their three most current Form 990s, as well as their IRS determination letter, and make these documents available to the public upon request.
Bottom Line for 501(c)(3) Organizations
In order to keep a 501(c)(3) tax-exempt status, the organization must provide the required annual reports. This is done by filing accurate and timely documents with the IRS as well as state agencies. This demonstrates accountability, transparency, and a level of public trust. If you are not sure about your obligations, contact us today. Our professionals at Dimov Tax are ready to present expert support.