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Running a nonprofit comes with a strong focus on purpose, but compliance quietly plays an equally important role in keeping everything on track. Many organizations assume that once their annual filing is done, there is nothing more to worry about.
Then a notice arrives from the IRS, and it immediately raises concern.
In most cases, these notices are not as serious as they appear. They are part of the IRS’s routine process to ensure that filings, especially Form 990, are complete, timely, and accurate.
When you understand what each notice is trying to communicate, it becomes much easier to handle them with confidence.
For nonprofits, IRS notices usually arise from either missed filings or issues in filed returns.
Common IRS notices due to missed filing
These notices are issued when required forms are not filed or filing obligations are not met.
- CP259A – Missing Form 990 Series Return
What it means: When an organization does not file its required Form 990, Form 990-EZ, or Form 990-N, the IRS sends this notice as a reminder. It indicates that the expected return has not been received.
What to do: The organization must file the return as soon as possible and submit any required response. Delay in filing may lead to further notices. - CP259B – Missing Form 990-PF for Private Foundations
What it means: When a private foundation or a Section 4947(a)(1) trust fails to file Form 990-PF, the IRS sends this notice. It indicates that the required return has not been received.
What to do: The organization must file Form 990-PF and submit any required response or payment as instructed to remain compliant and avoid further notices. - CP259D – Missing Form 990-T (Unrelated Business Income Tax Return)
What it means: When an organization does not file its required Form 990-T, the IRS sends this notice based on its records. It indicates that the return for unrelated business income has not been received.
What to do: The organization must file the return immediately or respond if it has already been filed or is not required. Ignoring it may lead to further follow-ups. - CP299 – Missing Form 990-N (e-Postcard)
What it means: When an organization does not file its required Form 990-N (e-Postcard), the IRS sends this notice as a reminder. It indicates that the annual electronic notice has not been received.
What to do: The organization must file Form 990-N as soon as possible to remain compliant and avoid future notices. - CP120A – Revocation of Tax-Exempt Status (Form 990 Series Non-Filing)
What it means: When an organization fails to file its required Form 990 series returns for three consecutive years, the IRS revokes its tax-exempt status. This means the organization is no longer treated as tax-exempt and may need to file returns like Form 1120 or Form 1041.
What to do: To regain status, the organization must reapply for tax exemption and meet reinstatement requirements. See how - CP259H – Missing Form 990/990-EZ Return for Tax-Exempt Political Organizations
What it means: When a tax-exempt political organization does not file its required Form 990 or Form 990-EZ, the IRS sends this notice as a reminder. It indicates that the return has not been received.
What to do: The organization must either file the return or respond if it has already been filed or is not required. Ignoring it may lead to further follow-ups.
Common IRS notices due to incorrect / incomplete reporting
These notices are issued when filed returns have missing details, inconsistencies, or status-related issues.
- Letter 2694C – Form 990 Returned (Missing Information)
What it means: When an organization files Form 990 with missing or incomplete information, the IRS returns the filing and issues this letter.
What to do: Review the missing or incomplete sections, update all required details, ensure the return is properly signed, and resubmit the corrected return. - Letter 2695C – Form 990-EZ Returned (Missing Information)
What it means: When Form 990-EZ is submitted with incomplete or missing information, the IRS issues this letter and returns the filing for correction.
What to do: Complete all missing fields, attach any required schedules, verify accuracy, and resubmit the corrected return with the IRS letter promptly. - Letter 2696C – Request for Missing Information
What it means: When additional details or clarification are required to process your return, the IRS sends this letter requesting specific information.
What to do: Provide the requested information and supporting documentation, if applicable, and respond within the timeline mentioned in the letter to avoid delays or further notices. - CP120B – Removal from Group Tax-Exempt Status
What it means: When an organization is no longer recognized under a group exemption, the IRS issues this notice. It indicates that the organization is no longer covered under the parent’s tax-exempt status.
What to do: The organization must apply for its own tax-exempt status using Form 1023, 1023-EZ, or Form 1024/1024-A, if eligible. Otherwise, it should continue to meet its required annual filing obligations. - CP255 – Information Required for Termination of Private Foundation Status
What it means: When additional information is needed to complete the termination of a private foundation’s status, the IRS issues this notice. It indicates that the process cannot be finalized without further details.
What to do: The organization must submit Form 8940 along with the required user fee through Pay.gov within the specified timeframe to proceed with termination. - CP120 – Tax-Exempt Status Not Recognized
What it means: When an organization files a tax-exempt return, but IRS records do not show it as tax-exempt, this notice is issued. It indicates a mismatch between the filing and IRS records.
What to do: The organization must provide proof of tax-exempt status or apply for exemption using the appropriate form and fee. If not eligible, it should file the applicable taxable return.
Handle IRS Notices with confidence, not uncertainty
When you file with Tax990, you’re not just completing a requirement—you’re backed by an added layer of support through our partnership with Protection Plus.
Every Form 990 filed with Tax990 includes:
- Professional tax resolution support up to $1 million for up to 3 years after IRS acceptance
- Guidance for IRS notices, audits, and related issues
- No additional charges for this support
This means if a notice shows up, you’re not figuring it out alone.
Because compliance isn’t just about getting it right today. It’s about being prepared for what comes next.
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