Recurring IRS penalties for late or incomplete Form 990 filings

$7,300–$63,500 per late/incomplete Form 990 (penalty of $20–$125/day × number of days late; max $12,000–$63,500 depending on org size); additional risk of automatic tax-exemption revocation after 3 consecutive years of non-filing, destroying donor trust and ability to operate • $7,300–$63,500 per late/incomplete return in year one; cumulative revocation risk year three = loss of tax-exempt status + unpaid corporate income taxes + donor base erosion (20–40% drop when revocation is public) • For larger organizations, each late or incomplete Form 990 can incur $120–$125 per day in penalties up to $60,000–$63,500 per return, and repeated failures risk full loss of 501(c)(3) status and associated tax‑exemption, potentially jeopardizing millions in deductible donations and grant eligibility. A typical mid‑sized fundraiser may see $7,300–$63,500 per incident in direct penalties plus tens of thousands in lost or delayed major gifts, matching gifts, and grants when donors lose confidence.

Fundraisers maintain donor data in disconnected Excel spreadsheets, email chains, WhatsApp messages, and paper pledge cards; Finance manually consolidates incomplete data; missing donor names, gift amounts, or substantiation triggers either late filing or incomplete returns • Manual Excel reconciliation, email chains to Database Administrators and Event Fundraising Managers requesting historical donor records, memory-based recall of cash transactions, exported CSV files from multiple systems patched together • Marketing/communications and board liaison staff manually track 990 status, deadlines, and required schedules in ad hoc spreadsheets and email threads, rely on reminders in personal calendars and memory, and scramble with last‑minute calls/Zooms between finance, outside CPA, and leadership when they realize a deadline or IRS correction letter is about to hit.