In late January, the IRS released an updated Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, that helps tax-exempt organizations avoid common mistakes when filing their annual return. One out of three paper filers has an error on their form, according to the IRS and the new option was designed to help tax-exempt organizations navigate the form more easily.
The updated Form 990-EZ includes 29 “help” icons describing key information needed to complete many of the fields within the form. The icons also provide links to additional helpful information available on IRS.gov. These “pop-up” boxes share information to help small and mid-size exempt organizations avoid common mistakes when filling out the form and filing their return.
On the new Form 990-EZ, the help icons are marked in boxes with a blue question mark. The icons and underlying links work on any device with Adobe Acrobat Reader and Internet access. Once completed, filers can print Form 990-EZ and mail it to the IRS.
Although many large exempt organizations are required to file Form 990-series information returns electronically, the IRS encourages all exempt organizations to consider filing electronically.
In 2016, the error rate for electronically-filed 990-EZ returns was only one percent, compared to the 33 percent error rate in paper-filed returns. In 2016, the IRS processed over 263,000 Forms 990-EZ, with the majority of the filings–139,000–on paper.
Exempt organizations should keep in mind that the new help icons do not replace the Form 990-EZ instructions. Filers should review the Form’s instructions when completing a return and use the help icons as an additional tool.
Form 990-series returns are due on the 15th day of the fifth month after an organization’s tax year ends. Many exempt organizations use the calendar year as their tax year, making May 15, 2017, the deadline to file for tax year 2016.