E-Postcard Requirement for Small Nonprofits Is Serious Tax Business

By now, if you are a small, tax-exempt nonprofit (less than $25,000 gross receipts), you have gotten a letter from the IRS about its new e-Postcard.

With the enactment of the Pension Protection Act of 2006 (PPA), the majority of small tax-exempt organizations are now required to submit the e-Postcard. Previously, tax-exempt organizations with gross receipts of $25,000 or less were not required to submit information returns such as the Form 990. The first e-Postcards are due in calendar year 2008.

The IRS calls the new form an e-Postcard because it is short, easy and electronic,” Lois G. Lerner, director of the IRS Exempt Organizations division said. “And organizations will be able to submit it free of charge.”

The e-Postcard requires small organizations to provide a legal name and mailing address, any other names used, a Web address if one exists, the name and address of a principal officer and a statement confirming the organization’s annual gross receipts are normally $25,000 or less.

The IRS is making the e-Postcard as easy as possible but also warns that it is a requirement. Organizations that don't file risk losing their tax-exempt status.

The IRS intends to have an option available for free electronic submission of the e-Postcard, but this is not in place yet. Watch for an announcement about it.

Further details, including frequently asked questions and a copy of the educational letter, are available in the charities and non-profits section of IRS.gov.