IMPORTANT IRS INFORMATION – PLEASE READ CAREFULLY
DATE 2
January 2008
The Internal
Revenue Service (IRS) has advised National Headquarters that it has begun
mailing educational letters to all CWV echelons that were not previously
required to file IRS Form 990 (or 990-EZ), Return of Organization Exempt From
Income Tax, because their annual gross receipts were normally $25,000 or less. The purpose of the IRS
letter is to notify those echelons that because of legislative changes (Pension Protection Act of 2006) the filing
requirements for annual information returns have changed. To ensure continued
recognition of their tax-exempt status, we want to be sure that all affected
echelons are aware of the new IRS filing provisions.
Commencing in
2008, echelons that were not previously required to file Form 990 or 990 EZ,
because their annual gross receipts were normally $25.000 or less, will be
required to electronically submit a Form 990-N with the IRS annually. The name
of the new IRS form is Form 990-N, Electronic Notice (e-Postcard) for
Tax Exempt Organizations Not Required to File Form 990 or 990-EZ. Since there will be no paper form, Form
990-N must be submitted electronically to the IRS. The IRS is calling this new
information form an “e-Postcard” since supposedly, it will be easy to complete
and may be submitted to the IRS free of charge.
Echelons that
are required to submit a Form 990-N must do so by the 15th day of
the fifth month after the close of their annual accounting period. Since the
accounting period for most echelons ends on 31 December of each year,
the first form Form 990-N Electronic Notice (E-Postcard) must be submitted no
later than May 15, 2008. According to the IRS, the e-Postcard will
require the echelon to provide basic information such as the echelon’s name and
mailing address, Echelon’s taxpayer identification number, Echelon’s Internet
website address (if any), name and address of a principle Echelon officer,
Echelon’s annual accounting period and a statement confirming that the
Echelon’s annual gross receipts for that accounting period were less that
$25,000. Also, if the Echelon is no
longer in existence, the IRS must be so advised. The IRS has further advised
that, like other information returns, Form 990-N is subject to the public
disclosure and inspection rules generally applicable to tax-exempt
organizations.
This new law
requires the IRS to revoke the tax-exempt status of any organization that fails
to satisfy this annual reporting requirement for three (3) consecutive years.
Consequently a Echelon that does not file a required Form 99-N will have its
tax-exempt status revoked by the IRS, as of the filing date of the third year.
Should this occur, the Echelon will be required to apply to the IRS for
tax-exempt and pay the appropriate user fee, in order to have its tax-exempt
status reinstated. Reinstatement of the Echelon’s tax-exempt status may be
retroactive, provided it is shown to the satisfaction of the IRS that the
Echelons has a reasonable cause for not filing any required annual Form 990-N.
The IRS has
further advised us that it is in the process of developing an electronic filing
system for the new Form 990N. Filing procedures will be publicized on the IRS
website at www.irs.gov/eo when the system
is complete and ready for use. The IRS is also encouraging CWV subordinate
units to sign up for EO Update, Exempt Organization’s free email
newsletter. Subscribers will automatically receive the latest information about
the e-Postcard. You can subscribe at www.irs.gov/eo.
IRS also has a toll-free telephone number at (877) 829-5500.
Please bear
in mind that these new legislative changes do not affect a Echelon’s obligation
under present law to file IRS information returns (Form 990 or 990-EZ) if their
annual gross receipts exceed $25,000. Therefore under the new law, all
Echelons will be required to annually file individual
information returns with the IRS, whether it is Form 990, 990- EZ or the new
form 990-N Electronic Notice (e-Postcard).
To serve as a
reminder of your annual IRS filing requirement, please be sure to keep a copy
of this memo for your Echelon’s records and provide a copy to future officers.
JOSE M. GARCIA
National Executive Director