The IRS has kicked off an educational campaign to the more than 650,000 small tax-exempt organizations that may be required to submit a new annual notice, Form 990-N, “Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ.” The campaign follows through on a Pension Protection Act of 2006 (“PPA”) change requiring exempt organizations that are not required to file annual information returns to file annual notices with the IRS.
The PPA amended the Internal Revenue Code (the “Code”) to require that organizations that are not otherwise required to make an annual filing because their gross receipts are less than $25,000 to file an annual notice with the IRS containing basic contact and financial information. The annual filing requirement is effective for notices and returns with respect to annual periods beginning after 2006.
The IRS is mailing educational letters to affected organizations to make certain small exempt organizations know about the “simple and straightforward” e-Postcard requirement, and to caution them that ignoring the requirement could imperil their tax-exempt status. Under the Code, any organization that fails to meet its annual reporting requirement for three consecutive years automatically loses its tax-exempt status. An organization that wants to regain its exempt status must reapply for recognition as a tax-exempt organization.
Please contact us if you have received an IRS letter and need additional guidance.