The Center for Ethics, Governance, & Accountability

People with an interest in non-profit governance are aware that May 15, 2010 will be a sad day for thousands of non-profits who have forgotten to file their IRS Form 990 for the third straight year. (Actually, the problem date is May 17, 2010 since the 15^th falls on a Saturday this year.)

The purpose of this Non-Profit Tip is not to brief you on the details of the federal regulation that has resulted in this reality – you can do the research via the Internet – but, rather, the idea here is to give you a simple, easy-to-follow ‘fix’ that will keep you safe and sound – every year – on the filing deadline for your Form 990 filing.

Tip: use whatever ‘reminder’ mechanism you have at your disposal to make a note of the annual due date for the filing of the 990 for your non-profit.

If you use a pocket calendar, write it down! If you use Microsoft OUTLOOK, enter a reminder for the deadline! Calendars and reminder features come in so many forms that there is something out there for you, no matter what your technology preference. Even if your non-profit is large enough to have a staff member responsible for the 990 – or, even if you outsource the responsibility to a CPA – you must write it down! In the end, whether you are the executive director or the chair of the board, the ultimate responsibility for the filing of the ‘Number One Most Important IRS Document of the Year’ rests on YOUR shoulders!

The IRS guideline is simple and easy to remember, so you can quickly set your reminder notice: the 990 is due every year on the 15^th day of the 5^th month following the end of your fiscal year.

For calendar year-end accounting periods (December 31), the filing date is May 15 – the 5^th month (May) and the 15^th day (or the first business day after the 15^th if it falls on a weekend like this year). If your accounting period is June 30, then it’s still the same rule: 5^th month after the accounting period (November) and it’s still the 15^th day. This is very straight-forward. There are options for two extension periods, but both still require that you request the extension (i.e. take action) by the original filing date.

Because our organization – CEGA – believes in the importance of ethics, governance, and accountability as a proactive tool to enhance the image of non-profit organizations, let me offer a reminder of the importance of filing your 990 on time. Remember that your non-profit status (as a tax exempt, charitable organization serving your community) is a privilege granted by the IRS. In lieu of paying taxes and filing say, a Form 1040 (like you file for your personal income taxes), your non-profit is required to file, annually, a Form 990. It’s the law. And, it’s your responsibility. While everybody knows April 15^th is the magic deadline for your personal taxes, the non-profits have varying deadlines related to their year-end accounting periods, which makes forgetting all too easy.

The recent news stories tell us that thousands of non-profits will lose their status because they have forgotten to file their 990 for three years in a row. Three years?! Good grief!! I would submit that they deserve to lose that status: they failed to live up to their end of the bargain. And, again, in keeping with our recommendations at CEGA, wouldn’t you prefer that your non-profit be known as one who lived up to its responsibilities and did NOT forget to file? Doesn’t that say a lot about who you are?

Be proactive. Don’t trust your memory. Don’t rely on anybody else. Follow our tip: set a reminder – do it right now – for next year. I assure you that you – and your stakeholders – will be glad (and very proud) that you did.