A nonprofit audit client usually files a full Form 990, but smaller clients, and clients whose size changes, raise the question each year. The form depends on gross receipts and total assets, the due date depends on the fiscal year end, and the consequence of ignoring the filing is loss of exemption. The CPA firm that reviews or audits the financial statements is often the first to notice a missed return.
The thresholds
The IRS filing chart sets the form by size:
- Gross receipts normally $50,000 or less: Form 990-N (e-Postcard). The organization may choose to file a full return instead.
- Gross receipts under $200,000 and total assets under $500,000: Form 990-EZ or Form 990.
- Gross receipts of $200,000 or more, or total assets of $500,000 or more: Form 990.
- Private foundation, regardless of financial status: Form 990-PF.
Section 6033(a)(3)(A) provides mandatory exceptions from filing for churches, their integrated auxiliaries and conventions or associations of churches, organizations other than private foundations with gross receipts normally not more than $5,000 in each year, and the exclusively religious activities of religious orders.
Test both measures. An organization with gross receipts of $185,000 and total assets of $520,000 files Form 990, not 990-EZ, because assets are $500,000 or more. One with $190,000 of receipts and $300,000 of assets may choose either form. Gross receipts are the total of all receipts before expenses, so a gala with $120,000 of ticket sales and $70,000 of costs counts at $120,000.
Due dates and extensions
Form 990, 990-EZ and 990-PF are due by the 15th day of the 5th month after the end of the accounting period. For a calendar-year organization the due date is May 15. The IRS states that Form 8868 requests an automatic 6-month extension. The 990-N due date cannot be extended.
For a fiscal year ended June 30, 2026, the fifth month after the year end is November, so the due date is November 15, 2026. That date is a Sunday, so under section 7503 the return is timely if filed on the next day that is not a Saturday, Sunday or legal holiday: Monday, November 16. A firm with June 30 clients should have Form 8868 requests filed, or returns ready, now.
What "normally" means for the 990-N
The 990-N test is gross receipts "normally" $50,000 or less. Gross receipts are all amounts received from all sources during the accounting period, without subtracting costs or expenses. The IRS sets the averaging by age:
- In existence one year or less: received or pledged $75,000 or less in the first tax year.
- In existence one to three years: averaged $60,000 or less during each of the first two tax years.
- At least three years old: averaged $50,000 or less over the three preceding tax years, including the year being tested.
Example: an organization five years old reports gross receipts of $62,000, $48,000 and $44,000 in the three latest years. The average is $154,000 divided by 3, or $51,333, which is above $50,000. It cannot file the 990-N and files the 990-EZ or 990, because receipts are under $200,000 and assets are under $500,000.
The 990-N is filed electronically and asks for the employer identification number, tax year, legal name and mailing address, any other names used, the name and address of a principal officer, the website address if one exists, and confirmation that receipts are $50,000 or less. It is due on the same 15th day of the 5th month, and it cannot be filed until the tax year ends.
A second due date example
A client with a September 30 year end counts five months to the 15th day of February, so the return is due February 15, 2027. That day is the Presidents Day holiday, so the return is timely on Tuesday, February 16. A Form 8868 filed by then adds six months and moves the due date to August 15, 2027, which is a Sunday, so the extended date falls on Monday, August 16.
Automatic revocation
Under section 6033(j)(1), an organization that fails to file an annual return or notice required under the section for 3 consecutive years has its section 501(a) exempt status considered revoked on and after the date set for filing the third annual return or notice. The Secretary maintains a public list of revoked organizations. Under paragraph (2), a revoked organization must apply to be reinstated, whether or not it originally had to apply. Paragraph (3) lets the Secretary reinstate exemption retroactively to the date of revocation if the organization shows reasonable cause for the failure.
The 990-N counts as a required notice. A late 990-N carries no penalty, which is why small clients let it slide, but three consecutive missed years still revoke exemption. Section 6033(j)(1)(A) calls for the IRS to notify the organization after two consecutive missed years, so a client that ignores that notice has no excuse.
Common errors
- Testing only gross receipts. Total assets of $500,000 or more require the full Form 990 even when receipts are low.
- Netting event costs against ticket sales when measuring gross receipts.
- Treating the 990-N as optional. An organization eligible for it may choose a full return, but it must file one or the other every year.
- Filing a Form 990 for a private foundation. A private foundation files Form 990-PF regardless of financial status.
- Assuming a church-affiliated client is exempt from filing. The exception covers churches, integrated auxiliaries and conventions or associations of churches, not every religious nonprofit.
What to do in the client file
- At acceptance and annually, document the form type with gross receipts and total assets for the year.
- Set the engagement scope against nonprofit audit requirements and the statement format in nonprofit financial statements under ASC 958.
- Obtain the prior three years' filing confirmations. If one is missing, raise it with the board before issuing the report, since loss of exempt status affects tax provisions, donor deductions and disclosures about income taxes.
- Calendar the extension and the due date, and track UBI filing separately on Form 990-T, covered in Form 990-T and unrelated business income.
- Reconcile the filed return to the audited statements, using the Form 990 reconciliation guide.
- Confirm the organization's status on the IRS revocation list if any filing history is unclear.
Sources
- Internal Revenue Service, Form 990 series, which forms do exempt organizations file: https://www.irs.gov/charities-non-profits/form-990-series-which-forms-do-exempt-organizations-file-filing-phase-in
- Internal Revenue Service, Form 990-N e-Postcard, normally $50,000 test and filing information: https://www.irs.gov/charities-non-profits/annual-electronic-filing-requirement-for-small-exempt-organizations-form-990-n-e-postcard
- Legal Information Institute, 26 U.S.C. 7503, Time for performance of acts where last day falls on Saturday, Sunday, or legal holiday: https://www.law.cornell.edu/uscode/text/26/7503
- Internal Revenue Service, Annual exempt organization return due date: https://www.irs.gov/charities-non-profits/annual-exempt-organization-return-due-date
- Legal Information Institute, 26 U.S.C. 6033, Returns by exempt organizations: https://www.law.cornell.edu/uscode/text/26/6033
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