2008 IRS Annual Electronic Notice Filing Requirement

The Internal Revenue Service (IRS) has advised National Headquarters that it has begun mailing educational letters to AWIS Chapters 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 letters is to notify those Chapters 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 AWIS Chapters are aware of the new IRS filing provisions.

Commencing in 2008, Chapters 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.

Chapters 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 AWIS Chapters ends on June 30th of each year, the first Form 990-N Electronic Notice (e-Postcard) from Chapters must be submitted to the IRS by no later than November 15, 2008.

According to the IRS, the e-Postcard will require the Chapter to provide basic information such as the Chapter’s name and mailing address, Chapter’s taxpayer identification number, Chapter’s Internet website address (if any), name and address of a principal Chapter officer, Chapter’s annual accounting period and a statement confirming that the Chapter’s annual gross receipts for that accounting period were less than $25,000. Also, if the Chapter 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 AWIS Chapter that does not file a required Form 990-N will have its tax-exempt status revoked by the IRS, as of the filing due date of the third year. Should this occur, the Chapter will be required to apply to the IRS for tax-exempt status and pay the appropriate user fee, in order to have its tax-exempt status reinstated. Reinstatement of the Chapter’s tax-exempt status may be retroactive, provided it is shown to the satisfaction of the IRS that the Chapter had 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 990-N. Filing procedures will be publicized on the IRS website at www.irs.gov/eo when the system is completed and ready for use. The IRS is also encouraging AWIS 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 to EO Update at www.irs.gov/eo. IRS also has a toll-free number at (877) 829-5500.

Please bear in mind that these new legislative changes do not affect a Chapter’s obligation under present law to file IRS information returns (Form 990 or 990-EZ) if their annual gross receipts exceed $25,000.  Although the AWIS National Organization annually files a Form 990 information return with the IRS, it is important to know that Chapters are not included in National’s annual return (although Chapters are included in our group exemption from Federal income tax under Section 501 (c) (4) of the Internal Revenue Code). Therefore, under the new law, all Chapters 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 Chapter’s and/or Department’s records and provide a copy to your future officers.