Nonprofit - File 990? Filed Exemption, not received yet

[bbrownatl]

Ok, this is my first go around with a Non Profit. A good friend just established an entity (C-Corp) in last 2009 and has applied for 501(c)(3) tax exempt status but it is not finalized yet. My question is what do we need to file for 2009. File as regular C-Corp (1120) or file a 990-EZ. For 2009, the activity was very minimal but I assume that we still need to file one or the other. Any insight appreciated.

Thanks,
Brian

[Uncle Sam]

NonProfit Filing

Since you just recently filed the 1023 application - I would not file ANY form yet.
If you were to file a corporate return, then find out your application was approved as a non-profit then you would be complicating entity filings with IRS.

Sometimes it could take months before IRS assigns a case worker to review the application. I had one case where IRS didn't assign the application to a case worker until NINE months later.

So long as you have a record of when the corporation was formed, how soon afterwards the application was filed, then that's your proof for documenting down the road why there should be no penalties for late filing.

I have gone through enough of these cases to know - it's better not to file any form until you get the letter accepting or rejecting.

[MRTAX4EA]

Check Box C

Do you think the entity will have 990 status? Most entities I encounter are private foundations and file Form 990-PF.

There is a check box "C" at the top of the form to indicate the application is pending. This would avoid paying taxes except for the 2% excise tax.

[CarolToppCPA]

Small NFP need not file 990 or 990EZ

[QUOTE=bbrownatl;93951] For 2009, the activity was very minimal but I assume that we still need to file one or the other.

If gross revenues were under $25,000 in 2009, no 990 or 990EZ is required. Only the new 990N electronic postcard is required. I would recommend a new small nonprofit should wait until they receive the IRS determination letter before filing (i.e logging into IRS system) the 990N.

A larger NFP (gross rev > $25K) should file 990 or 990EZ while waiting determination letter. Check the box Application pending.

[bbrownatl]

One more question

Now another twist, several individuals made $1,000+ donations to this entity in 2009 for the purposes of initial startup activities. As mentioned, this entity has filed for the 501(c)(3) status but has not received it yet. Wouldn't this entity need to send a donation confirmation to the donors? However, technically, it is not a 501(c)(3) organization yet? Do you still send a donation statement to the donor for 2009 donations?

Again, thanks for all the insight.

Brian