Thursday, May 9, 2013

May 15th Filing Deadline Draws Close

As May 15th draws near next week, I want to remind our nonprofit organizations of two important deadlines. 

Forms 990, 990-EZ & 990-N
For calendar year returns, Forms 990 and 990-T need to be filed by the 15th or properly extended.  If an organization is extending Form 990-T, then it should deposit via EFTPS any tax that is due with the return to avoid late payment penalties and related interest. If the organization has less than $50,000 of gross income and less than $200,000 in fixed assets, it should file its Form 990-N by May 15th.

Form 5578
Another deadline often overlooked is the deadline for private schools that do not file Form 990 or Form 990-EZ to file Form 5578.  Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt from Federal Income Tax is also due by May 15th for schools with a calendar year end.  This return is generally required to be filed by churches that operate schools as a direct part of their activities or by church affiliated schools that do not have a Form 990 filing requirement. 

The Form 5578 certifies that the school (church) has satisfied the applicable nondiscrimination requirements as detailed in Revenue Procedure 75-50.  In general these requirements are:

  1. The governing documents contain the proper prohibition against discriminating as to admission or employment on any of the protected grounds other than based on religious discrimination;
  2. The school's handbook and other documents should also contain similar language;
  3. The school maintains records that indicate the racial make up of the student body, teaching faculty and administrative faculty; and
  4. The school/church has publicized its nondiscrimination policy using either the appropriate radio or televsion medium.  (Internet does not qualify to meet this requirement.)  There are some exceptions to this rule, but they are very narrow and do not apply to many church operated schools. 
Form 5578 may be downloaded from the IRS website at Failure to file can result in an IRS inquiry and failure to comply with Revenue Procedure 75-50 can result in revocation of the school's tax exempt status.