Running a nonprofit often feels like balancing mission work with a steady stream of rules and deadlines. Among those obligations, IRS Form 990 stands out. It is not just a tax document. It is a public snapshot of your organization’s purpose, leadership, finances, and impact. For many nonprofits, this single filing influences how donors, grantmakers, journalists, regulators, and the broader community understand the organization. The upside is that, when approached thoughtfully, Form 990 can strengthen trust and reinforce compliance under nonprofit law.
What IRS Form 990 Is and Why It Exists
IRS Form 990 is an annual information return that most tax-exempt organizations must file to keep their exempt status. The IRS uses it to confirm that the organization continues to operate for an exempt purpose, follows relevant rules, and reports its finances accurately. At the same time, the form is designed for public transparency. It lets the public see where the organization’s money comes from, how it is spent, and who governs it.
Unlike a for-profit tax return, Form 990 is not mainly about calculating how much tax is owed. Its core function is disclosure. That difference matters. A strong Form 990 is both compliance work and narrative work, because it explains your programs and financial decisions in a way outside readers can understand.
Which Version Do You Need to File?
The “Form 990 series” includes several versions, and nonprofit law compliance starts with picking the right one. The IRS bases the required form on receipts, assets, and entity type.
Common versions include:
- Form 990 (long form): Generally for larger organizations. A typical threshold is gross receipts of at least $200,000 or total assets of at least $500,000.
- Form 990-EZ: A shorter return for mid-sized organizations that fall below the long-form thresholds but above the smallest-organization range.
- Form 990-N (e-Postcard): For small organizations with gross receipts normally $50,000 or less, unless a special rule applies.
- Form 990-PF: For private foundations, regardless of size.
Some organizations are not permitted to file the e-Postcard, even if small, such as specific supporting organizations.
Public Disclosure: Assume Your Filing Will Be Read
Completed Forms 990 and 990-EZ are generally available for public inspection, and many organizations post them online. If you do not proactively share the return, the IRS or third-party databases will. In practice, this makes Form 990 a public-facing document.
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That reality changes how you should approach the narrative sections. Vague program descriptions, missing context for unusual expenses, or unexplained revenue swings can raise unnecessary questions. Clear explanations reduce misinterpretation and build confidence.
Deadlines, Penalties, and the Bigger Risk
Form 990 is due on the 15th day of the fifth month after the fiscal year ends. Extensions are available, but they must be requested properly. Electronic filing is now required for most organizations.
Failure to file has consequences:
- Late filing penalties can accumulate based on size and length of delay.
- Automatic revocation is the most serious risk. If a nonprofit fails to file a required Form 990, 990-EZ, or 990-N for three consecutive years, the IRS automatically revokes its tax-exempt status. Reinstatement is possible, but it is time-consuming and can undermine donor trust.
From a nonprofit law perspective, revocation can trigger state-level reporting issues, loss of fundraising eligibility, and board-level fiduciary concerns. Even when the IRS is the direct enforcer, the fallout is broader.
Practical Tips to Make Form 990 Work for You
Form 990 can be more than a compliance task when it is prepared with care and context. The practical steps below help present your finances and mission clearly, reduce avoidable red flags, and support stronger transparency year after year.
- Start with your story, then match the numbers. Draft Program Service descriptions early. Once your narrative is solid, review whether your expense allocations and revenue categories reinforce that story.
- Document governance decisions. If Part VI asks about board review or conflict-of-interest enforcement, you should have meeting minutes or policy records that support your answers.
- Check consistency with public materials. Your mission statement on Form 990 should align with your website and grant language. Inconsistencies can appear to be mission drift even when none exist.
- Treat the form as a miniature compliance audit. Many IRS examinations begin with a Form 990 review. Taking time to tie out schedules, verify related-party disclosures, and explain anomalies is a preventative move.
Ready to File With Confidence?
IRS Form 990 is both a legal requirement and a credibility tool. It demonstrates commitment to transparency, supports good governance under nonprofit law, and shapes how the public evaluates your mission. If you want guidance that keeps the filing accurate, clear, and aligned with your long-term goals, May Herr & Grosh can help you navigate the process and reduce risk. Contact May Herr & Grosh to discuss your next Form 990 filing and ensure your nonprofit stays compliant and trusted.
