What IRS Form 990 Is For

IRS Form 990 (2023) is the required annual tax return for most nonprofit organizations. It helps maintain tax-exempt status and ensures transparency in financial activities. The form reports charitable contributions, executive compensation, gross receipts, grants, and conducted activities. It also provides valuable information about donor-advised funds, unrelated partnerships, and related organizations.

By filing, nonprofits demonstrate compliance with federal tax regulations and disclose detailed information about resources, transactions, and key officers. Filing Form 990 helps maintain public charity status and builds trust with donors, businesses, and other stakeholders.

When You’d Use IRS Form 990 (2023)

IRS Form 990 is required for most nonprofit organizations to report financial activities, including tax-deductible charitable contributions and gross receipts. Organizations meeting specific revenue thresholds or classified as public charities must file annually to maintain tax-exempt status. Filing ensures compliance with federal regulations and transparency.

Form 990 provides details about key employees, the highest compensated employees, fundraising events, and related organizations. It helps the IRS and the public understand how funds are used. Amended returns may be required to address discrepancies or missing information. Filing also supports audits, compliance, and public trust.

Key Rules or Details for IRS Form 990 (2023)

IRS Form 990 (2023) includes several key rules that every nonprofit organization must follow to remain compliant with IRS requirements. The form verifies an organization’s tax-exempt status and ensures accurate disclosure of financial details, gross receipts, and charitable contributions. Each organization must provide the necessary data for its fiscal year and file within the required period.

• Organizations are required to submit their Form 990 electronically through the IRS-approved system.
  
  
• Nonprofits are required to attach Schedule O for governance explanations and Schedule A for supporting organizations.
  
  
• Organizations must confirm that the activities conducted and related organizations are reported correctly.
  
  
• Filed forms must remain accessible to donors and the public.

Meeting these filing rules strengthens transparency, supports public confidence, and safeguards ongoing exemption eligibility.

Step-by-Step (High Level)

Filing IRS Form 990 requires careful preparation to ensure all required information is accurately reported. Start by gathering essential financial documents for the tax year, such as gross receipts, charitable contributions, and records of any fundraising events. Follow these steps to ensure proper filing.

• Step 1: Gather financial records, including detailed financial statements and tax receipts.
  
  
• Step 2: Complete Form 990 with accurate data, including details about key employees, net assets, and related organizations.
  
  
• Step 3: Attach required schedules, including Schedule O and other relevant schedules based on your organization’s activities.
  
  
• Step 4: E-file the form by submitting it electronically through the IRS-approved system.

These steps help ensure compliance and maintain the nonprofit's tax-exempt status. Timely and accurate filing also builds trust with donors and the public.

Common Mistakes and How to Avoid Them

Filing IRS Form 990 requires careful attention to detail. Many organizations make avoidable mistakes, leading to penalties or delays. Here's how to avoid common errors:

1. Using the Incorrect Version of the Form
   
   
   
   • How to Avoid: Always ensure you're using the correct version of Form 990 for the current year. Check the IRS website for updates.
     
     
2. Missing Signatures or Incomplete Schedule O
   
   
   
   • How to Avoid: Double-check for all required signatures and complete Schedule O, even if no additional information is reported.
     
     
3. Misreporting Financial Information
   
   
   
   • How to Avoid: Verify that income, charitable contributions, and expenses match supporting documents to avoid discrepancies.
     
     
4. Failing to Attach Required Schedules
   
   
   
   • How to Avoid: Attach all necessary schedules, such as Schedule O and Schedule B, to prevent incomplete filings.
     
     
5. Late Filing
   
   
   
   • How to Avoid: Submit Form 990 on time, or request an extension to avoid penalties.

Avoiding these mistakes ensures compliance and protects your nonprofit’s tax-exempt status.

What Happens After You File

After submitting IRS Form 990, the IRS will review the information to confirm compliance with reporting requirements. The review process typically takes between sixteen and twenty weeks, depending on the organization’s size and the accuracy of the filing. During this period, the IRS evaluates whether all required schedules, such as Schedule O, are complete and consistent with the organization’s stated activities conducted.

• The IRS may issue a notice requesting clarification or corrections if information appears incomplete or inconsistent.
  
  
• The organization may receive letters identifying missing data or unsigned sections that require an immediate response.
  
  
• Nonprofits must keep a complete copy of their annual information return, including attachments, available for public inspection for at least three years.
  
  
• The IRS database updates the filing record, allowing donors, government agencies, and the public to access verified information.

Timely responses and accurate filings protect a nonprofit’s credibility, ensure transparency, and maintain its tax-exempt status.

FAQs

What is the deadline to file IRS Form 990 in 2023?

Most nonprofit organizations must file IRS Form 990 by the 15th day of the fifth month after the end of their fiscal year. Organizations with a calendar year must file by May 15, 2024, for the 2023 tax year. Extensions can be requested using the instructions on the IRS page.

Who needs to file IRS Form 990?

Public charities, nonexempt charitable trusts, and private foundations must file Form 990 to maintain their tax-exempt status. Filing thresholds are based on revenue, and specific organizations may qualify to file Form 990-EZ or 990-N instead.

Can an IRS Form 990 be filed electronically?

Yes, most nonprofit organizations must e-file IRS Form 990 using an IRS-approved provider. This process ensures compliance and helps prevent delays in processing. The locked padlock icon signifies a secure submission.

Is the IRS Form 990 publicly available?

Yes, Form 990 is a public record and can be accessed through the IRS database. Donors, government agencies, and interested persons can review the financial details and activities of specific organizations.

What does it mean to amend a return?

Amending a return corrects errors or adds missing data from a prior filing. Amended returns must be clearly marked, providing information about the changes made to ensure accurate records for the IRS and the public.