Pro Bono Partnership Pundit: Sorting through the dreaded 501c3 reporting obligations

Paperwork. Reporting requirements.

I know. This isn’t a very captivating topic. But many tasks that nonprofits need to attend to aren’t captivating.

But this is an important topic, one that if ignored could put your nonprofit at significant risk of losing its charitable status and the rights that flow from that status.

In this post, I review five of the most common reports/registrations New Jersey 501(c)(3) public charities might need to file periodically and a few of the consequences for failing to do so. I also offer an easy solution for avoiding these consequences.

Reporting/Registration Obligations

1. Internal Revenue Service Annual Return of Organization Exempt From Income Tax

Every 501(c)(3) nonprofit must file an annual informational return with the IRS, using one of three different forms (Form 990, Form 990-EZ, or Form 990-N), by no later than the fifteenth day of the fifth month after the close of the nonprofit’s tax year. For more details, see Pro Bono Partnership’s Tax and Filing Considerations for Small New Jersey Nonprofits.

2. New Jersey Division of Revenue Annual Report

Every New Jersey corporation must file online an annual report with the New Jersey Division of Revenue by no later than the last day of the anniversary month of the nonprofit’s incorporation or registration to do business in New Jersey (a/k/a foreign registration). To learn more about this, see www.state.nj.us/treasury/revenue/dcr/programs/ann_rpt.shtml.

If you don’t know in what month your nonprofit was formed or registered, go to www.njportal.com/DOR/businessrecords, select “Business Entity Documents” and then “Business Name.” Enter the first one or two words of the name of your nonprofit and then click “Continue.” If you entered the name as recorded by the Division of Revenue, information about your nonprofit should appear. For example, among the organizations that I found when I searched for “Geraldine” is:

Business Name	Entity ID	City	Type	Original Filing Date
GERALDINE R. DODGE FOUNDATION, INCORPORATED	0900022790	MORRISTOWN	NP	10/1974

The Geraldine R. Dodge Foundation was incorporated in New Jersey in October 1974, so its annual report must be filed by October 31 each year.

Pro Bono Partnership is incorporated in Connecticut and is registered to do business in New Jersey. This is how the Division of Revenue lists the Partnership:

Business Name	Entity ID	City	Type	Original Filing Date
PRO BONO PARTNERSHIP, INC.	0100834618	PARSIPPANY	NF	11/2000

“NF” stands for “Foreign Non-Profit Corporation.” A chart listing the different codes is at www.njportal.com/DOR/businessrecords/Help.aspx#q45.

3. New Jersey Charities Registration and Investigation Section Annual Renewal Registration

Every nonprofit that is registered with the Charities Registration and Investigation Section of the New Jersey Division of Consumer Affairs must file an annual renewal registration within six months after the close of its fiscal year.

If your nonprofit received contributions in New Jersey, and the total gross amount of contributions received nationwide by your nonprofit exceeded $10,000 during the fiscal year, then your nonprofit should have been registered with the Section. To learn more about charities registration in New Jersey and in other states, see the following two publications on the Partnership’s website:

• Charitable Registration in New Jersey 

• Summary Survey of State Charity Registration Requirements – overviews the registration requirements in Puerto Rico and the 43 states that require registration by organizations that engage in charitable solicitations in those jurisdictions

If you aren’t sure whether your nonprofit is registered with the Section, you can do a search at https://njconsumeraffairs.state.nj.us/public-charity-search-results. For nonprofits that are up-to-date with their filing obligations, the search result will look as follows, with additional columns showing the street address, zip code, and phone number:

NJ Reg. #	Federal EIN	Charity Name	City	State	File Standing
CH1796400	061264823	PRO BONO PARTNERSHIP	WHITE PLAINS	NY	Compliant

4. New Jersey Legalized Games of Chance Control Commission Biennial Registration

Nonprofits that conduct games of chance must renew their registrations with the New Jersey Legalized Games of Chance Control Commission biennially and must file reports of operations by no later than the 15th day of the calendar month following the month in which a game of chance was conducted, except that reports relating to special door raffles need to be filed annually.

5. Triennial Municipal Property Tax Exemption Application

If a nonprofit obtains a declaration from a municipality that its property is exempt from real estate taxes, then every three years after the year in which the initial application for exemption was approved, by no later than Nov. 1, it must file with the municipality a Further Statement that reaffirms that the exemption, granted for past years, should remain in effect. Municipal tax assessors normally mail a blank Further Statement to nonprofits in advance of the filing deadline.

6. Other Reporting Obligations

There are other periodic reports that nonprofits must file, depending on the nature of their activities. For example, these might include:

• If a nonprofit has employees, various reports relating to employment wages and taxes will need to be filed. See the IRS’s Employment Taxes and the New Jersey Division of Taxation’s NJ Income Tax – Withholding Information and NJ Income Tax – Reporting and Remitting.

• If a nonprofit engages in lobbying, reporting might be required under federal law (see the Lobbying Disclosure Act Guidance) and state law (see the New Jersey Election Law Enforcement Commission’s Lobbying Overview & Training).

• If a nonprofit operates in a highly-regulated field, such as healthcare, governing regulations might require periodic reporting for certain events, such as is the case under the New Jersey Health Care Professional Responsibility and Reporting Enhancement Act (a/k/a the Cullen Act).

• If a nonprofit has entered into government contracts, periodic reporting is often a condition of such contracts.

Consequences for Not Filing

In addition to potentially having to pay late filing fees and/or penalties, failing to timely file required reports/registrations might have other, more significant consequences.

For example, if a 501(c)(3) nonprofit fails to file one of the Form 990 returns for three consecutive years, it will automatically lose its tax-exempt status as of the original filing due date of the third annual return.

See the IRS’s Revoked? Reinstated? Learn More. Donors thereafter will lose their charitable contribution deduction on their Form 1040, which might result in the nonprofit losing donors. And the nonprofit might also lose its sales tax exemption. See the New Jersey Division of Taxation’s Exempt Organization Certificate Form ST-5.

Similarly, pursuant to a provision of the New Jersey Nonprofit Corporation Act (see N.J.S.A. 15A:4-5(c)), a corporation that fails to file its annual report with the New Jersey Division of Revenue for two consecutive years is subject to having its Certificate of Incorporation or Certificate of Authority to do business in New Jersey revoked.

If a nonprofit’s corporate status is revoked, it will lose its entitlement to any property tax exemption it might have obtained. See Section 412.18 of the New Jersey Division of Taxation’s Handbook for New Jersey Assessors. In addition, it is conceivable that a court could hold that the nonprofit and its volunteers (including trustees) are no longer eligible to claim in litigation that they are entitled to immunity under the New Jersey Charitable Immunity Act, N.J.S.A. 2A:53A-7 et seq.

What Should Nonprofits Do?

To help avoid missing filing deadlines, a nonprofit’s executive director should appoint a senior manager to be primarily responsible for ensuring that all required registrations and reports are filed on a timely basis. A second senior manager should be selected as a backup. The executive director and these two managers should enter on their calendars the filing due dates and advance reminders of forthcoming deadlines. If one of these three people leaves the nonprofit, a replacement should be designated.

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Christine Michelle Duffy is a senior staff attorney with Pro Bono Partnership.  Christine is editor-in-chief and contributing author ofGender Identity and Sexual Orientation Discrimination in the Workplace: A Practical Guide, and a contributor to the treatise New Jersey Employment Law.  To learn more about Pro Bono Partnership, or to donate, please visit www.probonopartner.org or call (973) 240-6955.