Form 990 – Return of Organization Exempt From Income Tax

Form 990 is a critical tax document that nonprofit organizations in the United States must file annually with the Internal Revenue Service (IRS). The primary purpose of Form 990 is to provide the IRS and the public with financial information about the nonprofit, ensuring transparency, accountability, and compliance with tax laws.

Key Features or Components:

Form 990 collects details about the organization’s mission, programs, finances, governance, and activities. It includes sections for reporting revenue, expenses, assets, liabilities, executive compensation, and information about key personnel.

Relevant Filing or Compliance Requirements:

Nonprofit organizations that meet certain revenue thresholds are required to file Form 990 annually. The form varies based on the organization’s size and activities, with different versions such as Form 990-EZ and Form 990-N available for smaller nonprofits.

Penalties or Consequences for Non-Compliance:

Failure to file Form 990 or filing incomplete or inaccurate information can result in penalties, loss of tax-exempt status, and reputational damage. Nonprofits risk losing their tax-exempt status if they consistently fail to comply with the filing requirements.

Importance in Tax Resolution and Financial Compliance:

Form 990 plays a crucial role in maintaining transparency and accountability in the nonprofit sector. It helps donors, regulators, and the public assess an organization’s financial health, governance practices, and compliance with tax laws. By accurately completing and timely filing Form 990, nonprofits demonstrate their commitment to good governance and financial stewardship.