December 2007

Note: The following discussion is provided for informational purposes only and is not intended to serve as legal or tax advice. For specific information about e-filing and Form 990-N, consult your attorney or tax adviser.

Final E-Filing Regulations

Large nonprofits, take notice: the IRS has issued finalized regulations regarding the e-filing requirements of tax-exempt organizations. The final ruling doesn't differ significantly from the temporary regulations that were issued in 2006 and only affects the following types of organizations:

• public charities that are required to file at least 250 returns a year and have $10 million or more in assets at year end
• private foundations that are required to file 250 returns a year regardless of their year-end assets

The 250 return minimum refers to all income, excise, employment tax, and information returns that an organization is required to file. The ruling requires that these organizations file their Forms 990 and 990-PF electronically.

See more information on e-filing >

Temporary E-Postcard Regulations

If you're associated with a small nonprofit, this one is for you. The IRS has issued temporary regulations for the new Form 990-N. This form, also known as the e-Postcard, was introduced as part of the Pension Protection Act of 2006. Smaller tax-exempt organizations with gross receipts of $25,000 or less that don't file a Form 990 or 990-EZ will now be required to file a Form 990-N, with the following exceptions:

• churches, their integrated auxiliaries, and conventions or associations of churches
• nonprofits included in a group return
• private foundations required to file Form 990-PF
• section 509(a)(3) supporting organizations required to file Form 990 or 990-EZ

The e-Postcard asks for basic organizational information, including address, EIN, and the name of the principal officer. It must be submitted to the IRS on-line, as there is no plan for a paper version of the form. Failure to file the e-Postcard for three consecutive years could lead to the loss of an organization's tax-exempt status.

More information on Form 990-N >
More information on the Pension Protection Act of 2006 >

Patrick Ferraro, December 2007
© 2007, Philanthropic Research, Inc. (GuideStar)

Patrick Ferraro is a freelance writer in Seattle and a former editor of the Newsletter.