Form 990-N 2016 Instructions for Small Nonprofits

Filing the IRS Form 990-N is one of the simplest but most important tasks. The electronic notice, called the e-Postcard, ensures your tax-exempt status remains active. This required form must be submitted accurately and on time to meet annual filing requirements for nonprofit organizations.

Form 990-N confirms that your organization continues to operate within its tax-exempt purpose. It communicates basic information such as the legal name, mailing address, organization’s website address, and annual gross receipts. By completing this process each tax year, exempt organizations help maintain transparency and compliance with the Internal Revenue Service.

This guide explains everything you need to know for small nonprofits—from verifying eligibility and determining your due date to how to file Form 990-N correctly. Understanding the process, avoiding penalties, and staying compliant are essential steps toward keeping your organization’s annual return current.

Form 990-N 2016 Instructions

Before filing, it helps to understand what Form 990-N represents and why it matters for tax-exempt organizations. This IRS form applies specifically to smaller entities that meet certain annual gross receipts limits.

What Is Form 990-N

Purpose: The form allows nonprofit organizations to meet annual reporting requirements without submitting a full financial statement.
Format: It must be submitted as an e-file form through the IRS website; no paper version exists.
Eligibility: Only exempt organizations with gross receipts of normally fifty thousand dollars or less qualify to use it.
Result: Successful submission updates your organization in the IRS database and confirms your filing status for that tax year.

Why 2016 Filers Should Still Understand These Rules

Historical context: The 2016 filing year marked the continued use of electronic systems for e-Postcard submissions across all tax-exempt organizations.
Record accuracy: Knowing earlier requirements ensures that older filings remain correct in the IRS system.
Compliance review: Many organizations reference these rules for accuracy in annual return records.

Exempt Organizations and Eligibility Requirements

Before filing Form 990-N, an organization must confirm that it qualifies under the IRS’s annual filing requirements. Eligibility depends on gross receipts, organizational type, and other criteria established for tax-exempt organizations.

Who Can File Form 990-N

Gross receipts limit: The organization’s annual gross receipts must normally be fifty thousand dollars or less based on a three-year average.
Eligible entities: Only exempt organizations described under section 501(a) that are not private foundations may use Form 990-N.
Organizational type: The entity must operate exclusively for charitable, educational, or similar purposes consistent with tax-exempt regulations.

Who Cannot File

Ineligible groups: Private foundations, supporting organizations, and certain section 509(a)(3) entities cannot use the e-Postcard.
High-revenue organizations: Groups with annual gross receipts exceeding fifty thousand dollars must file Form 990 or 990-EZ instead.
Complex entities: Organizations maintaining foreign operations or donor-advised funds must complete the full form to meet annual reporting requirements.

Annual Filing Requirements for Small Nonprofits

Even small tax-exempt organizations must meet annual filing requirements. Failing to submit the e-Postcard for three consecutive years can result in automatic revocation of tax-exempt status.

Filing Frequency and Required Form

Annual return rule: All nonprofits must file a yearly return—Form 990, 990-EZ, or 990-N—depending on their gross receipts and total assets.
Simplified requirement: Form 990-N is designed for small tax-exempt organizations with minimal financial activity throughout the year.
System process: The form must be completed through the IRS website using the e-file form system.

Failure to File Consequences

Automatic revocation: The IRS will revoke the organization's tax-exempt recognition if the e-Postcard is not filed for three consecutive years.
Reinstatement process: Revoked organizations must apply for reinstatement using Forms 1023 or 1024 and pay applicable costs.
Avoid penalties: Although no direct penalty exists for a late 990-N, losing the exemption can impact donors and future operations.

Filing Form 990-N: Key Information to Prepare

Before beginning an e-file submission, gather all required details. The IRS form requests limited but critical basic information to confirm the organization’s identity and activity.

Required Basic Information

Legal name: The organization must use the official legal name registered with the IRS exactly as it appears in previous filings.
Mailing address: The organization must provide a mailing address that matches the state and IRS records.
Other names: The organization must include any other names it uses, such as trade or program titles.
Principal officer: The organization must enter the principal officer's full name, title, and a valid website address, if applicable.
Tax year: The filer must accurately indicate its beginning and end dates.
Statement: To verify eligibility for the e-Postcard, the filer must confirm that gross receipts are normally fifty thousand dollars or less.

Confirming Data Accuracy

Reviewed entries: The filer must double-check all fields before submitting, since inconsistent data can cause system rejection.
Applicable information: The organization must include only relevant information for the annual return and exclude attachments or additional documentation.
Save confirmation: The organization must print or save its electronic confirmation after successful filing for future reference.

Step-by-Step Filing Process of Form 990-N E-Postcard

The Form 990-N e-Postcard is submitted entirely online. A clear process helps reduce errors and ensures that the IRS accepts the filing form quickly.

Step 1: Gather Information and Review Eligibility

Each organization must collect all tax year details before logging in. The filer should verify that annual gross receipts meet the threshold for small nonprofits eligible to file Form 990-N.

Step 2: Access the IRS Website

The filer must go to the official IRS website and locate the Form 990-N e-Postcard submission page. Only this system supports authorized e-file submissions for tax-exempt organizations.

Step 3: Create or Log In to Your Account

The filer must use Login.gov or ID.me credentials to access the filing system. The filer then selects the correct organization and confirms the Employer Identification Number.

Step 4: Enter Basic Organization Information

The filer must input the legal name, mailing address, other names, principal officer, website address, and tax year. Each entry must match the organization’s previous IRS records exactly.

Step 5: Review and Submit Your Filing

The filer must review all entries carefully and submit the completed form. Once the filing is approved, the system displays a pending status and changes it to accepted once processed. The filer should print the confirmation immediately.

Due Date and Filing Timeline

To remain compliant, each tax-exempt organization must submit its annual return by the correct due date. Missing the deadline may trigger automatic revocation after three consecutive years of filing failure.

When to File

Standard due date: Form 990-N is due on the fifteenth day of the fifth month after the organization’s tax year ends.
Fiscal filer note: A fiscal filer must calculate its due date based on the fiscal year’s end month.
Calendar example: Organizations with a December thirty-first year-end must file by May fifteenth of the following year.

Late Filing and Extensions

No extension available: The IRS does not provide an extension for the e-Postcard. It must be filed by the deadline each tax year.
Failure risk: A late submission can affect public data and filing status and cause automatic revocation after repeated noncompliance.
Early preparation: Each filer should prepare the form once its first tax year data is complete to avoid missing the due date.

E-File Form: Technical and System Requirements

Filing Form 990-N requires a secure, reliable electronic process. The IRS has established clear requirements for e-filing that ensure accurate submissions for all exempt organizations.

System Compatibility

Supported devices: The IRS system supports modern desktop or laptop computers and does not allow smartphone or tablet submissions.
Stable connection: The filer must maintain a stable internet connection to prevent incomplete data transmission during the filing process.
Browser requirements: The system functions best on Chrome, Firefox, Edge, or Safari web browsers.
Security standards: The filing system uses encrypted data to protect sensitive organizational and principal officer information.

Troubleshooting Common Errors

Character limits: Each text field must stay within thirty-five characters to ensure the system processes entries correctly.
Entry restrictions: The filer must use only letters, numbers, and hyphens in data fields to prevent rejection errors.
Rejected submissions: The organization must review error messages carefully and correct all required fields before resubmitting the form.
Technical assistance: Filers may contact the IRS customer service team at 877-829-5500 if issues persist after repeated attempts.

Filing Form: Reviewing and Saving Confirmation

After submission, each organization must confirm that the IRS system accepted the e-file form. Reviewing and storing this confirmation protects the organization’s compliance record.

Filing Status Verification

Pending status: The submission remains pending until the IRS system verifies and accepts the organization’s data.
Accepted filing: Once accepted, the organization must print or save the confirmation immediately since it cannot be reprinted later.
Rejected filing: A rejected filing requires immediate review and correction to ensure the data meets IRS standards.
Retain proof: Keeping a digital copy of the confirmation page supports compliance if questions arise during future tax years.

Importance of Record Retention

Legal documentation: The confirmation proves that the organization met its annual reporting requirements.
Audit preparation: Proper documentation simplifies responses to IRS inquiries or public information requests.
Operational continuity: Consistent recordkeeping ensures smooth transitions between new officers or board members.
Data integrity: Retaining accurate confirmations prevents confusion when reviewing a multi-year filing history.

Automatic Revocation and Reinstatement

Automatic revocation occurs when a tax-exempt organization fails to meet annual filing requirements for three consecutive years. Understanding the reinstatement process is essential for maintaining compliance.

How Revocation Occurs

Missed filings: The organization loses its tax-exempt status if it fails to file the required annual return for three consecutive years.
IRS database update: The IRS automatically lists revoked entities in its public database after the third year of noncompliance.
Loss of recognition: Once revoked, the organization becomes taxable and may owe income tax on future earnings.
Public impact: Donors cannot claim tax deductions for contributions made during the revoked period.

Reinstatement Process

Application requirement: Revoked organizations must submit Form 1023 or Form 1024 to request reinstatement of their tax-exempt status.
User fees: The filer must pay applicable reinstatement fees depending on the organization’s classification and size.
Retroactive reinstatement: The IRS may allow reinstatement to apply retroactively if filings are corrected promptly.
Compliance review: The organization must demonstrate that it has resolved prior issues and understands future filing responsibilities.

Annual Return Recordkeeping and Documentation

Maintaining accurate records supports legal compliance and ensures the organization can prove it met its annual reporting requirements. These records also assist future officers during transitions.

Record Retention Periods

Minimum retention: The IRS recommends that organizations keep all tax-related records for at least three years from the filing date.
Extended retention: Some organizations maintain records indefinitely for historical and accountability reasons.
State requirements: State laws may require longer retention periods for nonprofit entities.
Secure storage: Digital and physical copies must be stored securely to protect confidential data and maintain integrity.

Zero-Activity or Dormant Year Filing

Some exempt organizations experience years without revenue or activity. These entities must still file Form 990-N to avoid losing their tax-exempt status.

Defining Zero Activity

Inactive operations: The organization records no income, expenses, or programs during the tax year but remains legally recognized.
Minimal transactions: Some organizations maintain only a small balance for administrative costs without active fundraising.
Ongoing compliance: Even without activity, filing the e-Postcard confirms continued operation and prevents revocation.
Legal existence: The organization remains an official entity until formally dissolved with state and federal authorities.

Filing Requirements for Dormant Organizations

Active obligation: Each dormant organization must file Form 990-N annually to retain tax-exempt status.
Reporting accuracy: The filer must still report the legal name, mailing address, and statement confirming gross receipts are below the limit.
Termination indicator: Only organizations formally closing operations should mark the termination option on their final filing.
Future planning: Dormant organizations planning to resume programs must maintain accurate records to ensure proper reactivation.

Tips for First-Time Filers

Newly recognized tax-exempt organizations often file their first e-Postcard within one year of formation. Understanding how to prepare ensures the first filing is complete and accepted immediately.

Preparation Steps

IRS recognition: The organization must wait at least six weeks after receiving its Employer Identification Number before attempting to file.
Document review: The filer should confirm that the organization’s legal name, tax year, and gross receipts data match official IRS records.
Filing readiness: The organization must verify eligibility for Form 990-N and confirm that annual gross receipts fall below fifty thousand dollars.
Deadline planning: The filer must identify the due date and add calendar reminders to prevent missing future deadlines.

Maintaining a Reliable Filing Process

Consistency: The organization must use the same account credentials for each annual submission to ensure data consistency.
Accuracy: Each field entered in the system must reflect the organization’s verified details and prior filings.
Timeliness: Preparing the form early reduces the risk of rejection and provides time to correct potential data issues.
Future updates: Organizations must review and update principal officer information annually to ensure all contact data is current.

Costs and Related Considerations

Filing Form 990-N is free of charge. However, organizations must understand related costs, optional services, and risks connected to improper or late submissions.

Filing Costs and Services

Free submission: The IRS provides electronic filing for Form 990-N at no cost through its official online system.
Third-party fees: Some external filing services charge unnecessary fees even though organizations can complete the process directly on the IRS website.
Avoid hidden costs: Organizations should avoid private platforms that advertise “simplified filing” since they often charge for tasks available for free online.
Professional help: Some organizations may hire tax professionals if their filings have a complex history or reinstatement concerns.

Potential Financial Implications

Revocation consequences: Losing tax-exempt status can reduce donor confidence and lead to additional reinstatement expenses.
Reinstatement fees: Revoked organizations must pay between two hundred seventy-five and six hundred dollars to reapply for exemption, depending on filing type.
Administrative time: Late or incomplete filings require additional staff time to resolve, which can increase operating costs indirectly.
Preventative management: Annual filing reminders help organizations avoid future administrative costs tied to reinstatement or compliance reviews.

Penalties, Amendments, and Corrections

Although the IRS does not impose direct monetary penalties for late 990-N filings, serious administrative consequences may occur if errors or omissions persist over multiple tax years.

Common Mistakes and Corrections

Missed deadline: Failing to meet the due date for three consecutive years results in automatic revocation of tax-exempt status.
Incorrect information: Filers cannot amend a Form 990-N after submission, so accuracy before filing is critical.
Incorrect EIN: Entering an incorrect Employer Identification Number causes automatic rejection and delays processing.
Wrong tax year: Filers must always select the correct year or risk invalid filing and potential status confusion.

Preventing Future Filing Errors

Internal review: To confirm accuracy, organizations must review the completed e-Postcard internally before submission.
Staff training: Officers responsible for annual returns should receive updated IRS guidance annually to maintain compliance knowledge.
System checks: Filers must confirm browser compatibility and clear cache to reduce technical submission issues.
Ongoing updates: Each organization should update records promptly when a new principal officer or mailing address changes.

Legal and Operational Best Practices

Proper compliance protects organizations from operational risks and enhances donor confidence. Adopting consistent internal procedures simplifies future filings and record maintenance.

Key Practices for Compliance

Annual planning: The organization must include filing deadlines in its yearly calendar and review its status regularly with its board.
Accurate records: Maintaining consistent accounting and activity records ensures accurate gross receipts calculations for every tax year.
Leadership oversight: The board must verify that all annual reporting requirements are completed before the due date.
Transparency commitment: Each organization should publish its filing status publicly to demonstrate accountability to donors and community members.

Leveraging IRS Resources

Official website: The IRS offers detailed filing guides and system access for the e-Postcard.
Publication 557: This publication explains tax-exempt status rules and can help organizations confirm their eligibility and structure.
Help desk: IRS representatives can clarify common technical or eligibility questions by phone.
Training materials: The IRS provides webinars and articles for new filers to ensure accurate completion of the annual return.

Frequently Asked Questions

Who must file Form 990-N for the 2016 tax year?

Organizations that normally have annual gross receipts of fifty thousand dollars or less and are not private foundations must file Form 990-N. Filing this electronic notice through the IRS website allows small tax-exempt organizations to maintain active recognition and meet their annual filing requirements without preparing a lengthy or complex annual return.

Can a small nonprofit choose to file Form 990-EZ instead of Form 990-N?

Yes, all small nonprofit organizations that qualify for the e-Postcard may voluntarily file Form 990-EZ instead of Form 990-N. Some organizations prefer this option to provide additional public financial information. However, filing Form 990-N fully satisfies all annual reporting requirements for small tax-exempt organizations and ensures compliance with the IRS electronic filing process.

What happens if we miss the Form 990-N due date?

If an organization fails to file Form 990-N for three consecutive years, the IRS automatically revokes its tax-exempt status. Once revoked, the organization loses eligibility to receive deductible charitable donations. To reinstate tax-exempt status, an organization must file Form 1023 or Form 1024 and pay the required user fee to regain federal recognition and tax exemption privileges.

Can I amend Form 990-N after submission if I made an error?

No, once submitted, Form 990-N cannot be amended or corrected within the same tax year. Any mistakes must be addressed in the next annual filing. Organizations should review all data, including the legal name, mailing address, and tax year, carefully before submitting to ensure accuracy and compliance with annual filing requirements.

Where can I find my accepted filing or proof that the IRS received it?

After submission, the IRS system updates the filing status to “Accepted” once it has been processed successfully. The organization must print or save the confirmation page immediately, as it cannot be reprinted later. This confirmation serves as official proof of filing and must be retained with permanent records for verification or compliance review purposes in future years.

Checklist for Form 990-N 2016 Instructions for Small Nonprofits

Get Tax Help Now

Thank you for contacting ‍GetTaxReliefNow.com!

Form 990-N 2016 Instructions for Small Nonprofits