The IRS may give certain tax privileges to non-profit groups but these groups are still required to file tax forms each year. Called informational forms, these filing requirements are more like summaries of what’s going on financially with a nonprofit group rather than a calculation of income tax. So, an organization may be tax-exempt, but it’s not exempt from having to file IRS forms each year and, in some cases, each quarter.
One commonly required reporting duty of any tax-exempt organization is IRS Form 1096. This is called Annual Summary and Transmittal of US Information Returns. It doesn’t actually contain any real information about the organization because it’s a “form for forms”. What does this mean? Well take a look at the actual IRS Form 1096 here on the IRS website. It’s simply a checklist of boxes with other IRS forms listed. The idea here is to inform the IRS of how many of each of those forms you are transmitting to them. It’s a form about other forms.
But tax-exempt organizations aren’t the only tax entities required to file IRS Form 1096. Anyone who files a 1099-Div or 1099 INT or some other forms on a short list, has to file the 1096 as well. These include 1097, 1098, 1099, 3921, 3922, 5498, or W-2G.
Filing Information Returns With the IRS
The instructions on IRS Form 1096 are classic IRS confusing. One on hand it stated that all information returns must be transmitted electronically. That means no paper forms submitted. This is because the IRS wants to scan the information, saving time and money.
But in the very next paragraph it states that you should use IRS Form 1096 to transmit paper versions of the very same information returns listed in the paragraph above, which were only supposed to be transmitted electronically. So, if you are mailing the following forms to the IRS, use IRS Form 1096 as a sort of “cover sheet”, so to speak.
- IRS Form 1098
- IRS Form 1099
- IRS Form 3921
- IRS Form 3922
- IRS form 5498
If you file these forms electronically, there is no need for the 1096 “cover sheet”.
Filling Out Multiple Form 1096s
For each of the forms on the list above, you have to fill out another Form 1096. What a joy! These are due at the end of February of each year.
Oh, and guess what you can’t simply download IRS Form 1096 from the IRS website and send it in. It has to be a scannable form, which means you have to order it directly from the IRS or buy them at an office supply store.
Want to avoid some of this? Use IRS Form 4419, Application for Filing Information Returns Electronically. On the other hand, you can also apply for a waiver, allowing yourself to file paper forms. The waiver is only good for a year. Use IRS Form 8508 Request for Waiver From Filing Information Returns Electronically.