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COMMON ERRORS IN COMPLETING IRS FORM 990

Nonprofits in the United States are required to file an information return each year to the Internal Revenue Service (IRS). In addition to understanding which form to file, it’s important to note some of the common errors that nonprofits make when completing their return. Not only will the IRS assess a penalty for filing a wrong return, it will also assess a penalty if a form is materially incomplete. In addition, organizations with gross receipts less than US$1 million during the fiscal year that submit an information return after the due date (including any extensions) without providing a reasonable cause for the late filing will be assessed a penalty of US$20 per day for each day that the return is late up to a maximum penalty of US$10,000 or 5% of the organization’s gross receipts, whichever is less. For organizations with gross receipts of US$1 million or more, the penalty is US$100 per day for each day that the return is late up to a maximum of US$50,000.

  1. Inaccurate tax ID (employer identification number); 
  2. Failing to complete all parts of the return;
  3. Completing all required checklists with “yes” or “no” (or N/A if available);
  4. Entering totals on all applicable lines, including a zero, wherever appropriate;
  5. Completing all applicable schedules, and, for organizations required to complete Form 990-PF, completing Schedule B or certifying it is not required by checking the box in Part I, Line 2;
  6. For organizations required to complete Form 990-PF, completing columns A, B, and C on Part II if total assets are US$5,000 or more at any time during the year as well as completing Part XV.  If assets are less than US$5,000, completing all of columns A and B on Part II but only line 16 of column C; and
  7. Signing the return.


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