![]() The obligation to file Form 990-T is in addition to the obligation to file the annual information return, Form 990-N, Form 990-EZ or Form 990. A Post must pay estimated tax if it expects its tax for the year to be $500 or more. A Post that has $1,000 or more of gross income from an unrelated business must file Form 990-T. For most organizations, unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the organization’s exemption. There is no penalty assessment for late filing the e-Postcard, but an organization that fails to file required e-Postcards (or information returns – Forms 990 or 990-EZ) for three consecutive years will automatically lose its tax-exempt status.Įven though The American Legion is recognized as tax exempt, the Post still may be liable for tax on its unrelated business income. For Posts required only to complete the e-Postcard (Form 990-N), if the Post does not file its e-Postcard on time, the IRS will send you a reminder notice. ![]() The penalty increases to $100 per day, up to a maximum of $50,000, for a Post whose gross receipts exceed $1,000,000. The maximum penalty is $10,000, or 5 percent of the Post’s gross receipts, whichever is less. If a Post files its Form 990 after the due date (including any extensions), and the Post does not provide reasonable cause for filing late, the Internal Revenue Service will impose a penalty of $20 per day for each day the return is late.Form 990-N, 990-EZ, and 990 must be filed by the 15th day of the 5th month after the end of the Post’s annual accounting period.See section later in this handout on UBIT. If the Post is subject to Unrelated Business Income Tax (UBIT), the tax-exempt organization must also submit the Form 900-T and pay the appropriate taxes.If gross receipts are greater than $200,000 or total assets are greater than $500,000, the Post must use the Form 990.Posts with gross receipts less than $200,000 and total assets less than $500,000 can use Form 990-EZ or Form 990.Beginning with the 2010 tax year, Posts with gross receipts normally less than $50,000 can now use the Form 990-N.The IRS offers free electronic submission of the e-Postcard. ![]() The first e-Postcards were due in calendar year 2008.
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