Really Easy! How To Understand IRS 990-EZ Form, Explained

Team of nonprofit leaders learn more about filing Form 990-EZUnless you’re a full-fledged employee of the IRS or a paid tax professional, it can be really difficult to understand the tax forms you must complete for your charity.  And if you’re operating as a non-profit, it makes sense that you can’t exactly afford to hire a tax professional, or take the classes to become one yourself! And you certainly can’t afford to not file!  

So what are you to do? You’ve turned to the right place.  We’ve done the research for you. We went straight to the source – the IRS – and read their instructions.  Here, we’ll go over what they have to say with you, in a straightforward question-and-answer format.  At TaxBandits, we’re all about straightforward! We want to make it truly easy for you to understand and complete your IRS 990 EZ Form.  

Who files the IRS 990-EZ Form?

The IRS gives a list of exactly who they expect to hear from with the IRS 990 EZ Form:

 “Tax-exempt organizations,

nonexempt charitable trusts,

and section 527 political organizations”

 

Specifically, “Form 990-EZ can be filed by organizations with gross receipts of less than $200,000 and total assets of less than $500,000 at the end of their tax year.”

Sounds pretty straightforward, right?  But, not so fast…

The IRS also has a list of those who aren’t allowed to file IRS 990 EZ, but must file another Form 990 instead:

  • sponsoring organizations of donor advised funds
  • private foundations required to file Form 990-PF
  • those filing a group return

In addition, there is a list of those who don’t have to deal with Form 990 or 990-EZ at all!

  • certain religious organizations
  • certain governmental organizations
  • certain political organizations
  • certain organizations with limited gross receipts
  • certain organizations that file different kinds of annual information returns

Keyword, “certain,” right? But don’t feel bad; these “certain” organizations are covered by other IRS Forms designed just for them!  

What is the IRS 990-EZ Form?

The long name for the IRS 990 EZ Form is the “Short Return of Organization Exempt from Income Tax.” That’s a mouthful!  Essentially, the IRS 990 EZ Form is a shorter version of IRS 990.

What’s the purpose?

Straight from the horse’s mouth, the IRS tells us that the IRS 990 EZ Form is here “to provide the IRS with the information required by section 6033.”

Okay, but what is section 6033?

Section 6033 is part of the IRS’s code, or Internal Revenue Code, which creates laws and guidelines for how the American people, businesses and organizations are taxed.  Section 6033 has to do with reporting and notification requirements that “certain tax-exempt organizations” must meet to stay compliant with US law.

What else should I know?

Within their instructions, the IRS makes an important note that you shouldn’t just look over then dismiss.  As an organization, you should know that “members of the public rely on Form 990 or 990-EZ as [a]…source of information about a particular organization.”  In fact, keep in mind that “how the public perceives an organization in such cases may be determined by the information presented on its return.”

When is the IRS 990-EZ Form filed?

The IRS states that you must “file Form 990-EZ by the 15th day of the 5th month after the organization’s accounting period ends.”  Generally, that adds up to May 15th for most organizations.

Wow!  This post sure is timely, isn’t it?  That deadline is coming up just around the bend!

Special note from the IRS: “If the organization is liquidated, dissolved, or terminated, file the return by the 15th day of the 5th month after liquidation, dissolution, or termination.”

What happens if I don’t file?

In a word?  Penalties. You’ll be fined.  It’s not good. Those penalties can get pretty steep, especially for an organization trying to put all their money toward doing good.  That’s why it’s such a passion for us here at TaxBandits to help you. We want your money to go where you want it to go, not toward fines!  Just so you have the information, here’s how the IRS breaks down the penalties:

Fines for the organization A penalty of $20 – $100 a day can be applied when a return is filed late or is incomplete or incorrect.

Penalties for the responsible person(s) Person(s) failing to comply in a timely manner with requests from the IRS can be charged a penalty of $10 a day.

Revocation of status If an organization fails to file for 3 consecutive years, its tax-exempt status is automatically revoked.

How do I file the IRS 990-EZ Form?

Here’s the easiest part!  TaxBandits can help you file fast, with just 5 simple steps!  Take a look!

  1. Sign in or create your free account.
  2. Add your organization’s details.
  3. Complete our simple IRS 990 EZ Form interview process.
  4. Review your information and audit report.
  5. Pay and transmit directly to the IRS.

When it’s that easy, why don’t you go ahead and get started now?  Let TaxBandits help you avoid penalties and accurate file your IRS 990 EZ Form today!  

 

File with TaxBandits!

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