It happens more often than people think: a treasurer moves away, a volunteer board loses track, a founder assumes the accountant filed. The good news is that a nonprofit that is behind can almost always get current. The order you do things in decides how much it costs.
Step 1: Check whether you've already been revoked
Search your EIN in the IRS Tax Exempt Organization Search and look at the Auto-Revocation List. Also look for a CP-120A letter in your mail, along with any other IRS letters; IRS notices for nonprofits explains the common ones.
- If you've been revoked, filing old returns won't restore your exemption. You need to apply for reinstatement, and the first 15 months after the notice or listing are when the best options are available. Go to automatic revocation and reinstatement.
- If you haven't, keep going. Your goal is to make sure a third consecutive missed year never happens.
Step 2: Build an inventory of what's missing
Before filing anything, make a simple table: each tax year, the return it required, its due date, whether an extension was filed, and what you have on record.
| What to gather | Where to find it |
|---|---|
| Prior returns actually filed | Your files, your former preparer, or Tax Exempt Organization Search |
| Gross receipts and year-end assets for each year | Bank statements, bookkeeping files, audit or review reports |
| Officer and board lists | Minutes, state annual reports |
| IRS and state letters | Mail, email, the organization's address of record |
The required return can change from year to year with your size, so check each year separately using which Form 990 to file.
Step 3: File the missing years, most urgent first
- File the year that is closest to becoming the third miss. Any accepted return breaks a run of consecutive non-filing years.
- File the remaining years. Returns for the current tax year and the two prior tax periods must be e-filed. Older returns can't be e-filed and are filed on paper, marked at the top of page 1 that the IRS no longer accepts e-file for that year. The window moves forward each year, so a return that can be e-filed today may need paper in a few months. See e-filing Form 990.
- File current-year returns on time, with a Form 8868 extension if needed, so the problem doesn't repeat.
For small organizations that only needed a 990-N, this is quick: there is no penalty for a late e-Postcard. Just file it.
A literacy nonprofit with about $120,000 of gross receipts a year. It is October 2026. The organization never filed its 2023 or 2024 Form 990-EZ, but a volunteer did file Form 8868 for 2025, so that return is due Monday, November 16, 2026.
- Most urgent: the 2025 return. If it isn't filed by November 16, 2026, that is a third consecutive miss, and exemption is revoked effective May 15, 2026, the original due date. The board files it first, on time.
- Then 2023 and 2024, filed November 2, 2026. The 2023 return was due May 15, 2024, so it is 901 days late: 901 × $25 = $22,525, capped at 5% of $120,000 = $6,000. The 2024 return, due May 15, 2025, is 536 days late: 536 × $25 = $13,400, also capped at $6,000.
- Exposure before relief: $12,000, and a reasonable-cause request goes in when the penalty notices arrive.
Step 4: Deal with the penalties
Late Forms 990, 990-EZ and 990-PF carry a daily penalty. For returns required to be filed in 2026 it is $25 a day up to the lesser of $13,000 or 5% of gross receipts, or $130 a day up to $65,000 for organizations with gross receipts over $1,309,500. Earlier years have slightly lower maximums. The IRS usually sends a notice after the late return is processed. See late-filing penalties for the full table.
Requesting relief for reasonable cause
The penalty isn't imposed if the organization shows the failure was due to reasonable cause. You can include a reasonable-cause explanation with the late return itself, as the Form 990 instructions direct, and respond again to any notice. A good request:
- is signed by an officer and responds to the notice by its deadline;
- explains what happened, with dates, and why it prevented the organization from filing on time;
- shows the organization acted responsibly: what it did once it knew, and how quickly it filed;
- describes what has changed so it won't happen again;
- includes documentation where available (medical records, disaster declarations, correspondence).
Circumstances outside the organization's control, like the serious illness or death of the person responsible, a natural disaster or the loss of records, are the strongest grounds. Simply forgetting, or relying on someone else to file, usually isn't enough on its own.
Don't hold back a late return while you write the perfect relief letter. Penalties keep running until the return is filed. File first, and send the explanation with it or as soon after as you can.
Step 5: Set up so it doesn't happen again
- Put the due date and extension date on two people's calendars.
- Keep IRS e-Postcard logins and e-file records with the organization, not with an individual.
- Ask the board to confirm each year that the return was filed. Part VI of the Form 990 asks whether the board received a copy before filing.
- Check your state registrations too; many states suspend a charity whose annual report is late.
Common mistakes
- Filing the oldest year first when a more recent year is about to become the third miss.
- Filing a 990-N for a year that needed a 990-EZ. The IRS treats it as not filed.
- Waiting for the IRS to write before acting.
- Mailing a paper return for a year that must be e-filed.
Frequently asked questions
Should we wait for the IRS to contact us?
No. Penalties for the 990, 990-EZ and 990-PF run daily until the return is filed, and the three-year revocation rule doesn't wait for a letter. Filing sooner is almost always cheaper.
We lost our old records. Can we still file?
Yes. Rebuild what you can from bank statements, donor records and minutes, and document how you reconstructed the figures. A complete, good-faith return is far better than no return.
Is the penalty relief request a separate form?
Usually it is a written statement, signed by an officer, sent with the late return or in response to the IRS penalty notice.
How far back do we need to go?
At a minimum, every year that required a return and wasn't filed, including years old enough to go on paper. Start with the years that protect your exemption, then work backward.
Do we also owe our state?
Possibly. States set their own late fees and can suspend a charity's registration. See state charity filings.
Sources
- IRS: 2025 Instructions for Form 990, sections E and H. irs.gov
- IRS: Automatic revocation of exemption. irs.gov
- IRS: Annual filing and forms. irs.gov
- IRS: Rev. Proc. 2014-11. irs.gov
- IRS: Rev. Proc. 2024-40. irs.gov
- IRS: Instructions for Form 8868 (Rev. January 2026). irs.gov
IRS figures change; inflation-adjusted amounts are updated each year. We review this page when the IRS publishes new instructions.
990IRS.com is a private company, not the IRS. This page is general information, not legal or tax advice for your organization. Example organizations and figures are hypothetical.
