By Henry A. Hart, SHRM General Counsel
Those SHRM Chapters that were required to file IRS 990-Ns and failed to do so the past three years, must file their Form 990-N by October 15, 2010 in order to avoid forfeiting their exemption from federal income tax.
As indicated in previous SHRM communications to Chapters, the Pension Protection Act of 2006 required 501(c)(3) and 501(c)(6) tax-exempt organizations (which include most SHRM Chapters and State Councils), which were exempt from filing the annual IRS Form 990 because their annual gross receipts were normally less than $25,000, to file a very simple electronic filing with the IRS once a year. This filing is called the Form 990-N or the “e-Postcard.” (See article which ran in the April 2008 issue of LeadersEdge and the Form 990-N FAQs document posted to the SHRM Volunteer Leaders’ Resource Center http://www.shrm.org/Communities/VolunteerResources/ResourcesforChapters/Pages/990NFAQs.aspx. for a further discussion of the Form 990-N).
Failure to file the Form 990-N, when required, for three consecutive years will result in revocation of tax-exempt status. The Form 990-N requirement was effective for tax years beginning after December 31, 2006; and the filing is due the 15th day of the 5th month after the close of the tax year. So if a Chapter is on a calendar year and normally has gross receipts of less than $25,000, its first electronic Form 990-N was for calendar year 2007 and was due on or before May 15, 2008. If such a Chapter did not file for 2007, 2008, or 2009, then it was at risk of losing its tax-exempt status when it failed to make the 2009 filing by May 15, 2010.
However, the IRS recently announced a one-time extension to October 15, 2010 as the date by when organizations which have failed to file a required Form 990-N for three consecutive years may still file the Form 990-N. (see link below). http://www.irs.gov/newsroom/article/0,,id=225959,00.html
Chapters can do so by simply going to the IRS Web site at the link below and filling out and submitting this Form. This act will bring them into compliance. http://epostcard.form990.org/
Of course, SHRM cannot offer legal advice to our Chapters. However, it is most important that any Chapter which has any questions as to whether it should have filed a Form 990-N, contact its legal counsel or CPA prior to October 15, 2010, to discuss with them the need to make their Form 990-N electronic filing prior to that October 15, 2010 deadline.