Voluntary Compliance Program Extends Filing Deadline for Small and Mid-Size Exempt Organizations

If your exempt organization missed the filing deadline for filing the 990-N or 990-EZ in May there is still time to get this done before the IRS pulls your exempt status.

The Voluntary Compliance Program (VCP) for small and mid-size Exempt Organizations allows organizations to file the appropriate 990 forms and preserve their exempt status.

Exempt organizations are required to file annual information returns with the IRS.  Very small organizations, entities with receipts of $25,000 or less ($50,000 or less in 2010) file Form 990-N, an electronic postcard. Qualified mid-sized organizations file form 990-EZ or Form 990.  Information returns are due the 15^th day of the 5^th month following the end of the fiscal year.  Under the Pension Protection Act of 2007, exempt organizations that fail to file the required returns for three consecutive years will automatically lose their exempt status. May 17, 2010 was the filing deadline before loss of exemption became effective.

The VCP is open to small and mid-size exempt organization that missed the May 17 filing deadline.   Mid-size organization who wish to participate in the VCP must:

·         Complete paper forms 990-EZ, or Forms 990 if they choose,  including all required schedules and attachments, for its 2007, 2008 and 2009 tax year by the extended due date of October 15, 2010.

·         Submit a signed checklist agreeing to the terms of the VCP: and

·         Pay a compliance fee. (Fee is based on 2009 gross receipts and range from $100 - $500.)

Small organizations have until October 15, 2010 to file the Form 990-N electronically.  There is no compliance fee for the Form 990-N filers.

If an organization’s exempt status is automatically revoked and it does not qualify for special relief, it must seek reinstatement. An organization can request to have its date of reinstatement effective retroactive to the date of revocation. The request will be granted only if the IRS determines that the organization had reasonable cause for not filing for three consecutive years and approves the organization’s exemption application.