Church-affiliated groups: who files a Form 990-N or 990-EZ

Churches do not file the Form 990 series

The IRS keeps a list of organizations that are not required to file an annual return. A church, an interchurch organization of local units of a church, and a convention or association of churches do not file Form 990, Form 990-EZ or Form 990-N. The same list includes:

• An integrated auxiliary of a church (see below)
• A church-affiliated organization that only manages funds or maintains retirement programs
• A school below college level affiliated with a church or operated by a religious order
• A church-affiliated mission society, if more than half of its activities are conducted in, or directed at persons in, foreign countries
• An exclusively religious activity of a religious order

In IRS Publication 1828, "church" is used in a general sense and includes other places of worship, such as mosques and synagogues.

Integrated auxiliaries

An integrated auxiliary is an organization related to a church that is not a church itself. Under Treasury Regulations section 1.6033-2(h), it must be:

1. Described in section 501(c)(3) and be a public charity under section 509(a)(1), (2) or (3)
2. Affiliated with a church or a convention or association of churches
3. Internally supported

Men's and women's organizations, seminaries, mission societies and youth groups that meet the first two tests are integrated auxiliaries whether or not they meet the third.

For other affiliated groups, the third test decides. An organization is internally supported unless it both offers admissions, goods, services or facilities for sale to the general public (other than incidentally, or at a nominal charge) and normally receives more than 50% of its support from a combination of government sources, public solicitation of contributions, and receipts from those sales. A church-affiliated thrift store, food pantry or community program that sells to the public and is funded mostly by grants and public donations may fail this test, and then it files like any other nonprofit.

Because the first test requires section 501(c)(3), an affiliated organization exempt under another section, such as a fraternal society or social club, is not an integrated auxiliary.

Groups that are part of the church

Many church groups are not separate organizations at all. A choir, Bible study, youth ministry or mission committee that uses the church's EIN and bank account is part of the church. It has no annual return of its own, because the church has none.

Church-related groups that do file

A church-related organization with its own EIN and exemption that does not fit any exception files the same returns as any other nonprofit:

• Gross receipts normally $50,000 or less: Form 990-N, the e-Postcard.
• Gross receipts under $200,000 and total assets under $500,000 at year end: Form 990-EZ (or the full Form 990).
• Above either limit: Form 990. 990.tax does not file the full Form 990.

Gross receipts are the total amounts received from all sources, without subtracting costs. The return is due on the 15th day of the 5th month after the tax year ends (May 15 for a calendar year). Form 8868 extends a 990-EZ by six months; the 990-N has no extension. A required filer that files nothing for three consecutive years loses its exemption automatically. See automatic revocation and reinstatement.

Unrelated business income

Even a church that files no annual return files Form 990-T if it has gross income of $1,000 or more from an unrelated trade or business, according to Publication 1828. 990.tax does not file Form 990-T.