Form 990 is a public document which allows not-for-profit (NFP) organizations to demonstrate transparency and accountability to donors, grantors, the IRS and the general public. It includes information about the organization's mission, programs and finances. Given the type of information included and potential for high visibility, it's important for an NFP to get it right.
Having seen our fair share of Form 990 errors, we decided to compile the top five errors that NFP's should avoid.
Failure to File on Time
Filing with the IRS is very important because the penalties for not-for-profits can be very costly depending on how late the return is filed. As of Jan. 25, 2024, if an organization whose gross receipts are less than $1,208,500 for the tax year files their Form 990 after the due date without reasonable cause, there will be a penalty of $20/day for each day the return is late (with a maximum of $12,000 or 5 percent of the organization's gross receipts, whichever is less). This penalty increases to $120 per day and up to a maximum of $60,000 for an organization whose gross receipts exceed $1,208,500.
Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett (CSH).