For Texas non-profit organizations with a December 31 fiscal year end, May 15 is one of the most important dates on the annual calendar: the deadline for filing IRS Form 990, the annual information return required of most tax-exempt organizations.
Failing to file Form 990 for three consecutive years results in automatic revocation of your organization’s tax-exempt status a devastating outcome that can take years and significant legal expense to reverse. With over 100,000 active non-profits in Texas, this compliance requirement affects organizations from small community charities to major Houston and Dallas foundations.
Despite being tax-exempt from federal income tax, most 501(c)(3) and other tax-exempt organizations are required to file an annual information return with the IRS. Form 990 provides transparency about the organization’s finances, governance, programs, and executive compensation.
Form 990 is a public document anyone can request a copy, and most organizations are required to post it on their website. It is used by donors, grant makers, charity watchdog organizations, and state regulators to evaluate your organization’s financial health and governance quality.
Organizations with gross receipts normally $50,000 or less file Form 990-N, a simple electronic postcard. While minimal in content, it must still be filed annually. Failure to file results in the same automatic revocation risk as larger organizations.
Organizations with gross receipts between $50,001 and $200,000 and total assets under $500,000 may file the abbreviated Form 990-EZ, which is shorter than the full Form 990 but still requires significant financial and programmatic information.
Organizations with gross receipts over $200,000 or total assets over $500,000 must file the full Form 990. This comprehensive return includes 12 core pages plus numerous schedules covering everything from compensation to program accomplishments to governance policies.
Private foundations file Form 990-PF regardless of size. This form includes additional disclosures about investment activities, grant distributions, and compliance with private foundation excise tax rules.
The IRS automatically revokes the tax-exempt status of any organization that fails to file a required annual return or notice for three consecutive years. As of the most recent IRS data, over 8,000 Texas non-profit organizations have had their exempt status revoked, many due to simple administrative failures.
Reinstating revoked exempt status requires filing a new application (Form 1023 or 1024), paying a user fee, and potentially losing donor deductibility for contributions made during the revoked period.
Check your organization’s current tax-exempt status on the IRS Tax Exempt Organization Search.
If you cannot complete Form 990 by May 15, you can request an automatic six-month extension by filing Form 8868. This extends your deadline to November 15. However, this is an extension to file not to pay. If your non-profit owes any unrelated business income tax (UBIT), that must still be estimated and paid by the original deadline.
Accurate non-profit accounting goes far beyond Form 990 compliance. Grant tracking maintaining separate accounting for restricted grant funds and meeting grantor reporting requirements is critical for non-profits that receive government or foundation grants.
Funders increasingly require audited financial statements as part of grant applications and reporting. Texas non-profits applying for grants over $750,000 in federal funding are subject to the Single Audit requirement under the Uniform Guidance.
At FAS Accounting Services, we provide specialized accounting services for Texas non-profit organizations including Form 990 preparation, monthly bookkeeping using fund accounting principles, grant tracking and reporting, internal control reviews, and audit support.
Our non-profit accounting team understands the unique requirements of tax-exempt organizations and helps Houston and Dallas nonprofits maintain their exempt status, satisfy grant requirements, and demonstrate financial accountability to donors and stakeholders.
For non-profits with a December 31 fiscal year end, Form 990 is due on May 15 of the following year. A six-month automatic extension to November 15 is available by filing Form 8868. Organizations with other fiscal year ends file on the 15th day of the 5th month after their fiscal year ends.
Non-profits that fail to file Form 990 for three consecutive years have their tax-exempt status automatically revoked by the IRS. This means donations are no longer tax-deductible, and the organization loses its exemption from federal income tax. Reinstatement requires filing a new exemption application.
Yes. Non-profits with gross receipts of $50,000 or less must file Form 990-N (the e-Postcard) annually. While it only takes a few minutes to complete online, failure to file for three consecutive years triggers automatic revocation of exempt status.
Yes. Form 990 is publicly available. The IRS requires that non-profits make copies available upon request, and most organizations post Form 990 on their website. It is also available through the IRS Tax Exempt Organization Search and through sites like ProPublica’s Nonprofit Explorer.
Grant tracking is the process of separately accounting for restricted grant funds to ensure they are spent in compliance with grantor requirements and reported accurately. Proper grant tracking is essential for maintaining funder relationships, satisfying audit requirements, and demonstrating financial stewardship to stakeholders.
