How To Understand IRS 990-EZ Form

Unless you are a full-fledged worker of the IRS or a paid tax expert, it can be quite tough to comprehend the tax forms that you need to complete for your charity. And if you are working as a nonprofit, it is logical that you simply can’t afford to employ a tax specialist or take the courses to become one! And you certainly can not afford not to file!

So what can you do? You have turned to the ideal location. We went right to the origin — the IRS — and then examined their directions. Here, we will discuss what they must say with you in a simple question-and-answer format.

Who records the IRS 990-EZ Form?

The IRS provides a list of precisely who they hope to hear from using the IRS 990 EZ Form:

“Tax-exempt associations, nonexempt charitable trusts, and section 527 political organizations.”

Mainly, “Form 990-EZ can be submitted by organizations with gross receipts of less than $200,000 and total assets of less than $500,000 by the end of their tax year.”

Sounds pretty straightforward, right? However, not too fast…

The IRS also includes a list of people That Aren’t allowed to file IRS 990 EZ but should file another Form 990 instead:

  • sponsoring organizations of donor-advised funds;
  • private foundations required to file Form 990-PF;
  • those filing a group return.

Also, there’s a list of those who don’t need to deal with Form 990 or 990-EZ at all!

  • сertain religious organizations;
  • certain governmental organizations;
  • particular political organizations;
  • particular organizations with limited gross receipts.
  • specific organizations that file different Sorts of annual information returns.

Keyword,” detailed,” correct? But don’t feel bad; these”certain” associations are covered by additional IRS Forms designed just for them!

What’s the IRS 990-EZ Form?

The long name for its IRS 990 EZ Form is the “Short Return of Organization Exempt from Income Tax.” Essentially, the IRS 990 EZ Form is a briefer version of IRS 990.

What’s the Objective?

Straight from the horse’s mouth, the IRS informs us that the IRS 990 EZ Type is here” to provide the IRS with the information required by section 6033.”

Alright, but what’s part 6033?

Section 6033 is a part of the IRS’s code, or Internal Revenue Code, which generates guidelines and laws for how the American individuals, companies, and associations are taxed. Section 6033 must tell and report requirements that”certain tax-exempt organizations” must fulfill to keep compliant with US law.

In their directions, the IRS makes an important notice you shouldn’t only look over then dismiss. As a company, you need to understand that “members of the people rely on Form 990 or even 990-EZ as [a]…source of information about a specific organization.” In reality, remember that”the way the public perceives an organization in such cases could be determined by the information presented on its return.

When is your IRS 990-EZ Form registered?

The IRS says that you have to”file Type 990-EZ from the 15th day of the 5th month after the organization’s accounting period ends.”

What happens if I do not file?

In one word? Penalties. You are going to be fined. It is bad. Those penalties can become pretty steep, particularly for a company hoping to place all their cash toward doing great. The way the IRS breaks down the penalties:

Fines for your own company. A penalty of $20 – $100 per day could be implemented if a return is filed late or is either incorrect or incomplete.

Penalties for the accountable individual, Individual (s) failing to comply on time with requests from the IRS could be charged a penalty of $10 per day.

Revocation of standing If a company fails to file for three successive years, then its tax-exempt standing is automatically revoked.