The new annual notice is based on the Pension Protection Act of 2006, and pertains to small nonprofits that are currently not required to file Form 990 or 990-EZ.

"Although the IRS says the process to file the e-Postcard will be painless, many small tax-exempt organizations are not accustomed to filing information returns," explains Karen A. Gries, CPA and nonprofit tax manager with LarsonAllen. "Organizations will lose their tax-exempt status if they fail to meet this reporting requirement for three consecutive years."

To educate organizations on this new requirement, the IRS began sending letters in July and will stagger the mailings through December 2007. They expect to notify more than 650,000 small tax-exempt organizations throughout the country.

Exceptions to the new requirement include:

• Organizations that are included in a group return
• Private foundations required to file Form 990-PF
• Section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ

How to submit the e-Postcard
As the e-Postcard name suggests, Form 990-N can only be filed electronically. A free electronic reporting system is under development. When it becomes available, the e-Postcard will be available in the charities and nonprofits section of IRS Web site.

The e-Postcard will require the following:

• Organization's name, mailing address, and Web address (if applicable)
• Any other names your organization uses
• Organization's employer identification number (EIN)
• Name and address of a principal officer of your organization
• Organization's annual tax period
• A statement that your organization's annual gross receipts are normally $25,000 or less
• Statement that your organization is going out of business (if applicable)

If you have questions, please contact us.

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