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As the May 15 filing deadline approaches, the Internal Revenue Service (IRS) is urging tax-exempt organizations to review filing requirements and avoid common mistakes that could result in penalties or loss of tax-exempt status.

Why It Matters

Failure to comply with filing requirements can lead to significant consequences, including automatic revocation of tax-exempt status. The IRS noted that three consecutive years of missed filings will result in such a revocation. Organizations can mitigate these risks by utilizing authorized e-file providers and ensuring that all schedules and necessary documents are included.

The May 15 deadline serves as a critical checkpoint for nonprofits that operate on a calendar-year schedule, a majority of tax-exempt groups. Those who miss the filing deadline are subject to late penalties, and the IRS advises that submitting Form 8868 for a six-month extension can help organizations buy time to complete their returns properly.

What To Know

The IRS emphasized that the filing due date for exempt organizations is the 15th day of the fifth month after the end of the organization's accounting period. For most groups, that translates to a May 15 deadline.

Forms due include the Form 990 series (990, 990-EZ, 990-PF), Form 990-N for smaller organizations, Form 990-T for unrelated business income, and Form 4720 for certain excise taxes.

E-filing requirements have expanded, meaning that even smaller organizations that file a Form 990-N must submit their returns electronically through the IRS website. Larger organizations must use an IRS-authorized e-file provider to submit Forms 990, 990-EZ, 990-PF, and 990-T for the 2023 tax year.

The IRS also reminds filers that extending the filing date through Form 8868 does not delay any payments that may be due. Organizations with business income tax liabilities should make those payments on time to avoid accruing penalties and interest.

Common filing errors include submitting incomplete forms, failing to attach required schedules, and using the wrong forms altogether. In such cases, the IRS will reject the return, and organizations must resubmit promptly to avoid being classified as not filing at all.

What People Are Saying

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "One of the positive developments through the IRS in recent years is how the process for nonprofits having to file has become more online-friendly and easier to complete. Whether you file with a e-postcard or have to use one of the lengthier forms, May 15th is the deadline to make sure you meet. If you know your organization is going to fail to submit by that date, you need to make plans to file for an extension."

Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "All tax-exempt organizations must still file their returns by the 15th day of the 5th month after the close of their tax year. But beyond that, there could be major changes on the horizon."

"The current administration is closely examining how some organizations operate and there's growing concern that those involved in DEI initiatives could face scrutiny. While nothing has officially happened yet, we've already seen moves to challenge the tax-exempt status of private institutions like Harvard. This could signal a broader effort to reassess how certain organizations maintain their exempt status moving forward."

Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: "Everything has to be filed electronically now, which IMO is actually a blessing in disguise. Electronic filing is so much faster, and you get that little confirmation right away instead of wondering if your forms are sitting in some mail room somewhere."

What Happens Next

The IRS filing deadline for tax-exempt organizations is May 15. The IRS also offers a free virtual workshop for nonprofits at StayExempt.irs.gov.

"If you're feeling a little overwhelmed by all this and honestly, who isn't? The IRS actually has some decent free training resources," Ryan said. "I checked it out last year and it was surprisingly helpful."

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