November 1, 2007 | Read Time: 1 minute
An Internal Revenue Service official is urging the tax agency to increase the threshold that determines which nonprofit groups must file the Form 990 informational tax return.
Nina E. Olson — who serves as the national taxpayer advocate at the IRS — has told the tax agency that only charities with revenue of $50,000 or more should be required to file the form. Currently groups with at least $25,000 in revenue are required to do so.
Ms. Olson also recommends that the threshold be indexed to inflation. The threshold has been static for 25 years. Meanwhile, the Consumer Price Index, which measures inflation, has increased by more than 109 percent during the same period.
Ms. Olson, who operates independently of other IRS offices and reports to Congress, made the recommendation as part of her comments about proposed changes in the Form 990. She says changing the budget ceiling would eliminate administrative burdens faced by small charities.
Beginning in 2008, organizations that generate less than $25,000 in revenue will have to file annual statements with the IRS, though the filing — the Form 990-N — will be much less complex than what larger charities must complete on the Form 990.
If the IRS were to raise the minimum standard for groups that file the Form 990, charities with $25,000 to $50,000 in revenue would be probably be required to file the Form 990-N.
