The IRS has added 29 “help icons” to Form 990-EZ, Short Form Return of Organization Exempt From Income Tax, to assist tax-exempt organizations in avoiding the most common mistakes when filing their annual returns.
Nonexempt charitable trusts and Code Section 527 political organizations also use this form to provide the IRS with information required by Section 6033.
Users can click on the blue icons, which are question marks, on the form to get a description of the information that’s needed to complete a particular field. The icons also include links to other information available on the IRS’s website.
The icons and underlying links work on any device with Adobe Acrobat Reader and Internet access. When completed, filers can print Form 990-EZ and mail it to the IRS.
“We’ve been reviewing the areas of the form where exempt organizations encounter the most trouble,” IRS Commissioner John Koskinen said in a prepared statement on Jan. 31. “One out of three paper filers has an error on their form. After reviewing these trouble spots, we developed this new option to help groups navigate the form. This common-sense approach is designed to make it easier for exempt organizations to avoid problems up front – and avoid getting a follow-up contact from the IRS.”
The IRS makes a point of noting that the icons don’t replace the instructions for Form 990-EZ. The icons are considered an added tool to the instructions.
Tax-exempt organizations with less than $200,000 of gross receipts and less than $500,000 in assets at the end of the year are required to file Form 990-EZ.
Form 990-series returns are due on the 15th day of the fifth month after an organization’s tax year ends. According to the IRS, many organizations use the calendar year as their tax year. So, May 15 is the deadline for tax year 2016.
The IRS also is reminding exempt organizations that the agency prefers electronically filed returns. While large exempt groups must e-file Form 990-series returns, the IRS wants everyone to do it.
In 2016, the error rate for e-filed 990-EZ returns was only 1 percent, compared to the 33 percent error rate for paper returns, according to the IRS. Last year, more than half (139,000 of more than 263,000 forms) of Forms 990-EZ were filed on paper.
Providers that help with e-filing can be found on the IRS’s website.
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.