Tax Exempt Organizations Required to E-File Under New Law
On July 1st, Congress enacted the Taxpayer First Act, which requires certain tax exempt organizations to file information returns and related forms electronically. The new law went into effect this year, so taxpayers who believe that its terms could apply to them this tax season, should be careful to review the law and if necessary, speak with an experienced Florida tax return preparation lawyer about their filing options.
Forms that Fall Under the E-Filing Requirement
Prior to the passage of the Taxpayer First Act, tax exempt organizations were required to file their returns in paper form. However, under the terms of the new law, taxpayers who must complete Forms 990, 990-PF, 8872, or 1065 will need to file those forms electronically starting next year.
The IRS recently announced that it will no longer be accepting paper versions of Forms 8872 from tax exempt organizations after 2019. Instead, 8872 forms that contain information for periods beginning on or after January of 2020 will need to be submitted electronically. This mandate applies specifically to Section 527 organizations, which includes:
- Charitable organizations;
- Churches and other religious groups;
- Private foundations; and
- Political organizations, such as political parties, political action committees, and campaign committees for candidates for local, state, or federal office.
These groups are required to file semiannual, quarterly, or monthly reports on 8872 forms. However, in order to file Forms 8872 online, the organization in question must use the username and password that it receives from the IRS.
In most cases, charities and other tax exempt groups that are required to file Form 990 or 990-PF must do so by the 15th day of the fifth month after the end of the tax year. Forms 990 with tax years ending July 31, 2020 and later must, however, be filed electronically. while Form 990 filings for tax years occurring prior to June 2020 can still be submitted on paper. Similarly, in the case of a short tax year, the IRS will continue to accept paper submissions.
When it comes to the new law and small tax exempt organizations, the Taxpayer First Act allows for a postponement or transitional relief in certain cases, primarily for organizations with:
- Annual gross receipts of less than $200,000; and
- Total assets at the end of the tax year of less than $500,000.
This means that for tax years ending before July 2021, the IRS will continue to accept either paper or electronic filings of Form 990-EZ from organizations that satisfy these requirements. For tax years ending July 31, 2021 or later, however, 990-EZ forms must be filed electronically with the IRS.
Forms 990-T and 4720
Finally, the IRS will continue to accept paper versions of Forms 990-T and 4720 while conversion into electronic format is pending. According to the IRS, these forms should be ready for e-filing in 2021.
Call Our Office for Help with Your Case
If you have questions about your own obligations when it comes to e-filing a return for a tax exempt organization, please call 386-490-9949 today to consult with dedicated tax return preparation lawyer Ronald Cutler, P.A. about your concerns.