Arguably, one of the most important tasks that a nonprofit must do is file annual tax forms with the IRS, in addition to the appropriate forms with the state in which they are registered. Failure to do so will result in the revocation of an organization's tax exempt status.
At Dennehy & Bouley, we represent a dozen nonprofit organizations, most of which would be considered micro groups with annual budgets under $200,000.00.
Nonprofit organizations that have annual gross receipts under $200,000.00, and assets of less than $500,000.00, are not required to file a full 990 tax form, but rather, they can file a 990-EZ form which is considerably less cumbersome.
Unfortunately, what we have seen over the last few years is the inability for a small nonprofit to find an accountant to file a 990-EZ at a reasonable rate. We have one organization with a budget of $75,000.00 that was being charged over $3,000.00 for a filing. Another organization had their accountant retire and they were unable to find a replacement.
Why is finding tax preparation help a problem now? One can only speculate for sure. However, 501(c)(3) organizations, which account for 75% of the nearly 2 million nonprofits in the United States, are increasing in number by 3-5% every year. Frankly, there is more money to be made by representing these larger organizations than with the smaller ones. That is a strategy that is difficult to argue with if you are an accounting firm.
Out of necessity, Dennehy & Bouley now offers tax preparation for nonprofit organizations. We have learned the ins and outs through IRS courses and we have successfully submitted over 50 tax filings for our clients. Today, we are ready and willing to help out any nonprofit who needs it. Providing, we still have the time available.
We take our tax preparation seriously, because, we know that your tax exempt status depends on it. In fact, several organizations have to come to Dennehy & Bouley having had their exemptions revoked due to prior mismanagement. We have successfully worked to reinstate their exemptions but it is a very time consuming process that everyone should strive to avoid. It can take as much as 18-24 months to reinstate an organization and deal with the aftermath of late filing penalties once the exemption is reinstated.
Don't forget, you can always file Form 8868 to extend your deadline if you need it!
One final note, for the super smallest of nonprofits, those with under $50,000.00 in gross receipts, you only need to file Form 990-N. This does take a little bit of understanding but it is the equivalent of just a postcard filing.
Please give us a call or send us an email if you are in need of assistance. Tax forms are due May 15th for organizations with a fiscal year ending on December 31!