What IRS Form 990 (2016) Is For

IRS Form 990 (2016) is the annual tax return that a nonprofit organization must file with the IRS to report income, expenses, and operational activities for the year. It ensures that every organization remains transparent about its gross income, paid wages, and property management, while meeting federal tax requirements and financial accountability standards.

The filing confirms that the organization qualifies for exemption from income tax and includes the required schedules, such as Schedule O, with complete explanations. Submitting the form before the filing date helps prevent penalties for late filing, underpayment, or reporting errors. The IRS uses this return to check that organizations pay and report income correctly, even when no estimated tax payments are owed. Accurate and timely filing protects eligibility for grants, builds public trust, and ensures compliance with federal law.      

When You’d Use IRS Form 990 (2016)

Organizations use IRS Form 990 (2016) to report their annual income, expenses, and activities to the IRS. Filing accurately and on time demonstrates accountability, ensures legal compliance, and helps nonprofit organizations maintain tax-exempt status. Each situation that requires this form serves a specific reporting or correction purpose within the organization’s financial cycle.

Filing Scenarios for Organizations

Organizations file when submitting a late return, correcting an error through an amended return, or updating prior-year income or wage data. The form also applies when confirming compliance after an IRS notice or when preparing documentation for grant applications or donors.

Key Rules or Details for the 2016 Tax Year

Organizations filing IRS Form 990 for 2016 must adhere to specific reporting rules established by the IRS. These ensure nonprofit organizations disclose accurate information about gross income, wages, and property to maintain compliance and transparency throughout the tax year.

• Filing Thresholds: Organizations with $200,000 or more in gross income or total assets exceeding $500,000 are required to file the complete form.
  
  
• Electronic Filing: Any organization filing more than 250 returns during the year must submit them electronically.
  
  
• Schedule O Requirement: All filers must complete Schedule O to provide explanations of financial or operational details.
  
  
• Automatic Revocation: Missing three consecutive filings results in loss of tax-exempt status.
  
  
• Late Filing Penalties: The IRS applies daily financial charges based on the organization’s income and overall size.

Step-by-Step: How to File IRS Form 990 (2016)

Filing IRS Form 990 for 2016 involves completing several steps to ensure that every nonprofit organization reports accurate financial and operational data. Each stage confirms compliance with IRS requirements and helps maintain an organization’s tax-exempt status.

1. Gather all financial statements that detail gross income, property, wages, and expenses for the 2016 tax year. Prepare supporting schedules and reconciliation items before proceeding.
   
   
2. Review the organization’s IRS account using Form 4506-T to confirm all prior filings are complete and properly recorded.
   
   
3. Download the correct IRS Form 990 2016 directly from the IRS website and verify that each page matches the filing year.
   
   
4. Complete every required section and attach the corresponding schedules, including Schedule O, to provide a comprehensive financial explanation.
   
   
5. Review every total for consistency, verify calculations, and confirm all entries meet the filing requirements before submission.
   
   
6. File electronically through an authorized e-file provider or send the completed return to the IRS Service Center in Ogden, Utah.

Common Mistakes and How to Avoid Them

Organizations filing IRS Form 990 for 2016 must take care to avoid errors that can delay processing or affect compliance. Accurate reporting of income, wages, and property ensures that the IRS receives a complete and verifiable record of nonprofit activities. Careful attention to each section of the form prevents the need for later amendments or corrections.

• Using the Wrong Form Year: Organizations should always use the IRS Form 990 2016 version to ensure that all reported data matches the correct filing period.
  
  
• Missing Schedule O: Every filer must complete Schedule O to explain income, governance, and financial disclosures in full.
  
  
• Reporting Errors: Nonprofits should confirm all figures for gross income, expenses, and property values before submission.
  
  
• Unsigned Returns: Each filing must include an authorized officer’s signature to be considered valid.
  
  
• Late Filing: Timely submission prevents additional penalties and ensures that the organization maintains its tax-exempt status.

What Happens After You File

After submitting IRS Form 990 for 2016, the IRS reviews the return to ensure every reported income, wage, and property entry aligns with federal filing requirements. The process may take several months, depending on the organization’s size, filing method, and level of detail provided. During this time, the IRS verifies schedules such as Schedule O and evaluates financial consistency across all sections.

If the IRS identifies missing or inconsistent data, it may send a letter requesting clarification of the information. Once accepted, the return becomes public for three years, confirming the organization’s compliance and reinforcing its accountability to donors, grantors, and the public.

Frequently Asked Questions

Who must file IRS Form 990 for 2016?

Every nonprofit organization with $200,000 or more in gross income or total assets exceeding $500,000 must file the full tax return. Smaller organizations may qualify for simplified forms, depending on their total income and property value for the year.

What happens if an organization files late?

The organization faces daily penalties until the IRS receives the complete tax return. Filing on time helps maintain compliance with IRS requirements and preserves tax-exempt status.

How do you file an amended form?

Organizations must complete a new Form 990 labeled “Amended Return” and include an explanation that clearly describes each correction. The amended return must correct all errors in reported income, wages, or Schedule O details.

What if an error affects reported income or taxes owed?

The organization must file an amended return immediately to correct the issue. Accurate reporting keeps the account compliant and helps prevent underpayment penalties.

Why is Schedule O required?

Schedule O allows organizations to provide detailed explanations of financial and governance information. It ensures that the IRS can verify each filing for completeness, accuracy, and transparency.