We have found start up organizations often don’t understand what reports are required annually. When an organization is up and running there are three very important filings required annually to keep the organization in good order with the state and the Internal Revenue Service.
The first one is an annual report from the Illinois Secretary of State’s office. The report requires that you list directors and officers as well as the registered agent of the organization. If you do not list at least three directors they will reject it and send it back to you. If you do not file it on a timely basis the organization will be dissolved which means that it will no longer have the legal protections of a Corporation. You can keep the protection if you promptly correct the missing reports.
The second filing is form 990 with the Internal Revenue Service. The form is required to be filed 5 1/2 months after the close of your fiscal year. Your fiscal year could end either on December 31 or on the last day of some other month such as June 30. There are three different types of form 990 and which one you file is determined by your assets and income.
If you have annual receipts of less than $50,000 then you file a form 99-N, which is often referred to as the electronic postcard. It is a series of 8 to 10 questions which asking about your gross income business address and other basic items.
The next form is called form 990 EZ. You must file this form if you have more than $50,000 of annual gross income but less than $200,000 of annual gross income and less than $500,000 in assets. You will need an accountant experienced in working with nonprofit organizations to file this correctly.
The final form which is required of all organizations with more than $200,000 in gross income or more than $500,000 in assets is the full form 990. This is by far the most detailed form. It asks about assets, liabilities, income and expenses. You will again need an accountant experienced in the not-for-profit field in order to have it prepared correctly and filed.
You must file the forms 990 on an annual basis. If you do not file a required form 990 for three years in a row your tax-exempt status will be revoked and you will not be able to receive tax-exempt tax-deductible contributions. You will then need to start the process over of getting tax-exempt status reinstated.
The final form that is required is the annual report with the Illinois Atty. Gen.’s office. It is a summary of income and expenses and you must file either a financial statement or that your form 990 with the form. If you do not file they will revoke your registration with the state and you will not be able to solicit funds in Illinois until you have fixed it.
These administrative duties may require significant amounts time and therefore you must have records ready when the time comes to prepare the forms. If you need assistance, call us. We can help.