© 2018 North Carolina Center for Nonprofit Organizations, Inc. | Legal Compliance Checklist 2
Have you Who has to do it How and when to do it
connued
Filed Form 990,
990-EZ, or 990-N
(e-Postcard) and
made your forms for
the past three years
publicly available?
• Nonprots with annual gross receipts under
$200,000 and total assets under $500,000 can le
Form 990-EZ.
• All supporting or controlling organizations must le
Form 990 or 990-EZ.
• Nonprots that fail to le their 990, 990-EZ, or
990-N for three consecutive years will automati-
cally lose their tax-exempt status.
• Churches, their integrated auxiliaries, and conven-
tions or associations of churches don’t have to le.
• Get forms at www.irs.gov/charities-non-prots/current-
form-990-series-forms-and-instructions and www.irs.gov/
charities-non-prots/annual-electronic-ling-requirement-
for-small-exempt-organizations-form-990-n-e-postcard.
• You must make your forms available for review by any-
one who requests them. You must provide immediately
for in-person requests or within 30 days for written
requests. You may charge a reasonable copying fee and
postage, if any. Alternately, post your three most recent
forms on your website or GuideStar.
• For what to le, see www.irs.gov/charities-non-prots/
form-990-series-which-forms-do-exempt-organizations-
le-ling-phase-in.
• Ask the IRS (877-829-5500) or your CPA for details.
• State law now requires nonprots that receive $5,000
or more in federal, state, or local grants or loans to
make their Forms 990, 990-EZ, or 990-N available to
the public. Comply by posting it on your website or
GuideStar. These nonprots must also give anyone who
asks a basic statement about the amount of public funds
received and how they were used.
Adopted and adhered
to policies on con-
icts of interest, gift
acceptance, Form
990 review, whistle-
blower protection,
and document reten-
tion and destruction?
• Most nonprots.
• On Part VI of Form 990, nonprots may be required
to indicate whether they have these policies in
place.
• On Part VI of Form 990, nonprots are also asked
whether ofcers, directors, trustees, and key em-
ployees are required to disclose annually interests
that could give rise to conicts.
• See the Center’s website for sample policies on conicts
of interest (www.ncnonprots.org/resources/sample-
conict-interest-policy), gift acceptance (www.ncnonprof
its.org/resources/gift-acceptance-policies), whistleblower
protection (www.ncnonprots.org/resources/sample-
whistleblower-policy), and document retention and
destruction (www.ncnonprots.org/resources/document-
retention-and-destruction-policy).
Used comparability
data to determine
executive compensa-
tion?
• Nonprots with paid employees.
• On Form 990, nonprots are required to indicate
whether they used comparability data to determine
salaries and benets.
• The Center will release a new report on salaries and
benets in NC nonprots this fall.
Reported and paid
tax on Unrelated
Business Income
(UBIT) and made
your Form 990-T for
the past three years
publicly available?
• Any nonprot with unrelated business income of
$1,000 or more.
• Effective January 1, 2018, tax-exempt nonprots
are also required to pay UBIT on the expenses they
incur to pay for employees’ parking or mass transit
expenses. Note that nonprots are not required to
pay North Carolina corporate income tax on these
parking or transportation expenses.
• See IRS Publication 598, Tax on Unrelated Busi-
ness Income of Exempt Organizations (www.irs.gov/
pub/irs-pdf/p598.pdf). Ask the IRS (877-829-5500,
www.irs.gov/charities-non-prots/unrelated-business-
income-dened) or your CPA for details.
• File IRS Form 990-T (www.irs.gov/pub/irs-pdf/f990t.pdf)
each year by the 15
th
day of the 5
th
month after your
scal year ends (e.g., Nov. 15 if your year ends June 30).
• File Form CD-405 with the NC Department of Revenue
by the 15
th
day of the 5
th
month after your scal year
ends and pay any applicable state corporate income tax.
• The Center and other nonprots have asked the IRS to
delay implementation of the new UBIT on parking and
transportation benets until the IRS issues clear guid-
ance addressing several unanswered questions about
this new tax.
• See www.ncnonprots.org/content/new-tax-transportation-
and-parking-benets-problematic-nonprots.
Stayed nonpartisan?
• Under federal tax law, all 501(c)(3) nonprots are
prohibited from supporting or opposing candidates
for ofce or political parties. This means that non-
prots can’t endorse candidates, contribute money
in partisan elections, or coordinate activities with
political campaigns.
• Note: Despite media coverage about efforts by
Congress and the President to repeal or weaken the
so-called Johnson Amendment, the law on nonprot
nonpartisanship has not changed this year. Regardless
of potential changes to the law – or changes that
prevent the IRS from enforcing it – the best practice
for all 501(c)(3) nonprots is to steer clear of parti-
san politics. The Center will provide nonprots with
any information about changes to the law regarding
nonprot nonpartisanship.
• Be certain your staff and board understand that they
may not suggest or imply that they are speaking on
behalf of your nonprot when they engage in personal
political activities.
• Nonprots can (and should) engage in a wide range of
nonpartisan election-related activities, including voter
registration, voter education, and get-out-the-vote ef-
forts (www.nonprotvote.org).
• For more on what nonprots can and can’t do during an
election year, see https://bit.ly/2vTCjPW.
• For more on the nonpartisanship requirement and why
it matters for charitable nonprots, see www.ncnonprof
its.org/public-policy/why-weakening-johnson-amendment-
would-be-devastating-nonprots.