How to file a none profit not exempt tax return?

[Liliana]

Hi, my friend opened a none profit organization for the community in December last year (2019). They are not tax exempt yet. The only thing they have is EIN and UBI number. They had a little donations and expenses, under $50,000. How do they file their tax return? Do they file 990n form for not exempt tax?

Thank you

[qbteachmt]

Did they file for exemption and that is pending, or did they not even file?

The IRS has great resources:

https://www.irs.gov/charities-non-profits/charitable-organizations/contributions-to-organization-wit...

https://www.irs.gov/charities-non-profits/other-non-profits/irs-processing-of-exemption-applications

[Liliana]

they did not applied, they plan to do it this year, but they want to file tax for the organization

thank you

[abctax55]

An *exempt* without IRS acceptance of non-profit status is a 'C" Corp and needs to file F 1120 plus the appropriate State Corporate return.

[Liliana]

even they are LLC?

[qbteachmt]

They might be operating Not For Profit, but that doesn't make them a charitable purpose in the eyes of the IRS, since they didn't file for exemption. That means they file a tax form for what they are, such as 1065 or 1120S or 1120 or Sched C. And until they have the letter of determination, or at least an accepted application, that's what they keep filing. They might not get their approval the first attempt, either.

In the future, you should recommend they file for an Advance ruling:

https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-organizations-rulings-and-...

[qbteachmt]

If you review the facts and circumstances, you might be able to list their activity in such a way on the 1040 that there is no tax consequence. Examples:

Donated to a School

Raised funds for the local Food Bank

Raised funds to buy PPE and turned these over to the local hospital

[Liliana]

can you explain more how i can do on 1040 for an organization? i am little confused.

Thanks

[qbteachmt · Accepted solution]

"how i can do on 1040 for an organization"

There is no Organization, unless you want to describe that this is a C Corp.

Otherwise, based on this: "my friend opened a none profit organization for the community"

You have an Individual trying to do something kind. That might mean it falls under their own 1040 activities. But you have to evaluate what they did, and that is called Facts and Circumstances.

Details will always be helpful.

[Just-Lisa-Now-]

I think your friend needs to find a tax professional that is more experienced in this type of situation.