Most tax-exempt nonprofits must file a
990 form with the Internal Revenue Service every year, typically in mid-May.
The 990 is purely informational. Nonprofits commit to serve an “
approved purpose” – such as fighting bigotry, protecting animal welfare or sheltering the homeless – and
meeting other eligibility rules. In exchange, they generally don’t pay taxes on the donations they receive or other sources of income. But they must file either this 12-page form or a shorter version of it, in which they report information about their finances, leadership and activities.
The IRS needs this information to verify that nonprofits should keep their tax-exempt status. It reviews 990s and
selects some to audit, just as it does for individuals and businesses.
The 990’s formal title is “Return of Organization Exempt from Income Tax.”
Since 1941, these forms have given the IRS an overview of nonprofit finances, including revenue, expenses, assets and liabilities. The form sums up the group’s mission, indicates who sits on its board of directors and states highest-paid employees’ pay.
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One large group of tax-exempt nonprofits isn’t required to file 990s: churches and other faith-based organizations engaged in worship.