IRS raises nonprofit threshold for e-Postcard filing

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Paperwork just got easier for a lot of small nonprofits.

The Internal Revenue Service has raised the financial threshold for tax-exempt organizations.

Instead of a $25,000 threshold, as of the Jan. 1, 2010 tax year, nonprofits with annual receipts of up to $50,000 can file the e-Postcard, or Form 990-N.

This means that many more of the smaller tax-exempt organizations can transition to the simpler Form 990-N for their 2010 annual information reporting.

This is welcome news for many nonprofits because the smaller organizations tend to be run by one or two people.

Filing long reports for the IRS can be time-consuming, which takes away resources from the clients they serve.

Supporting organizations of any size, however, must still file the standard Form 990 or, if eligible, Form 990-EZ.

A word of caution: Nonprofits that don’t file for three consecutive years will automatically lose their federal tax-exempt status. If that happens, it must reapply with the IRS to regain its tax-exempt status. And any income received between the revocation date and the renewed exemption may be taxable.

For more information about which form to file, visit