24d ago in General discussion
When “Filing on Time” Is Actually Filing Late
More background information to support today's email newsletter (https://46989368.hs-sites.com/non-profit-money-minute-when-filing-on-time-is-actually-filing-late?ecid=&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-8uh0ES80JC3sV9cjCy3cIqxOogwpepThlopu3_SM1IBbyAa_O_KbVOjOfpa-oKEUblHWdl):
While the IRS provides extended deadlines for filing Form 990, nonprofits seeking grant funding should prioritize early filing to ensure their tax-exempt status is updated in Publication 78, a critical resource for funders.
Key Ideas and Facts:
- Publication 78 Delay: The IRS typically takes 3-5 months to update Publication 78 after receiving a Form 990. Filing close to the extended deadline (November 15) can result in delayed visibility until the next year.
- "Waiting until the November deadline can delay your visibility in Publication 78 until next year—potentially putting grant eligibility at risk."
- Funder Reliance on Publication 78: Many grantmakers rely on Publication 78 to verify an organization's tax-exempt status before awarding funds. An outdated status jeopardizes grant eligibility.
- "Funders rely on the IRS's Publication 78 to verify your tax-exempt status..."
- Benefits of Early Filing: Filing Form 990 early ensures visibility and eligibility for funding opportunities throughout the year.
- "Staying ahead of this timeline can keep you visible and competitive in grant cycles"
- Proactive Communication: If there are delays in Publication 78 updates, nonprofits should proactively communicate with funders and confirm their active tax-exempt status using their determination letter.
- Impact on Reputation: Some funders may perceive delayed filings negatively, impacting an organization's reputation for transparency and efficiency.
- "Some funders view delayed filings as a lack of transparency, which can impact your organization’s reputation."
Recommendations:
- File Early: Submit Form 990 as soon as possible after the fiscal year ends.
- Prepare Ahead: Gather all necessary documents before the fiscal year-end to avoid delays.
- Communicate with Funders: If Publication 78 updates are delayed, proactively communicate with funders about active tax-exempt status.
- Utilize Tools for Tracking: Leverage tools like the IRS Tax-Exempt Organization Search (TEOS) or Guidestar to track your nonprofit's status in Publication 78.
Conclusion:
"On-time" for the IRS is not necessarily "on-time" for grant funders. Nonprofits must proactively prioritize early filing and stay ahead of the Publication 78 update timeline to maintain visibility and competitiveness in securing grant funding.
3
3 comments
When “Filing on Time” Is Actually Filing Late
skool.com/non-profit-accounting-tax-2309
Expert guidance for Non-Profits on financial management, tax compliance, & sustainable growth to enhance your organization’s impact & mission success.
powered by