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16383: 990 - e-Filing Requirements


990 Tax Exempt

Is there an e-filing requirement for a 990, 990-PF, 990-EZ, or 990-T return?

 

Yes, for an exempt organization with a tax year beginning on or after July 1, 2019, Public Law 116-25, Section 3101 requires that returns be filed electronically. This requirement will apply to Forms 990, 990-PF, 990-EZ, and 990-T. For calendar year filers, the requirement will take place for tax-exempt organizations starting in tax year 2020.

e-Filing for Form 990-T is not available in Drake19 and prior. Starting with Drake20, Form 990-T will be eligible for e-file and there will be an e-filing requirement. At this time (January 2021), 990-T e-file is not yet enabled, however, Drake20 will be updated to allow e-filing at a later date. 

There are several listed consequences to not e-filing or filing a return. If there is an e-filing requirement for the organization and the return is paper-filed, the instructions state that "...the organization is considered not to have filed its return..." In addition, "if an organization does not file as required for three consecutive years, it automatically loses its tax-exempt status." See the 990 Instructions and IRS Annual Filing and Forms page for details. 

If you are filing a 2020 Form 990 or 990-PF, you are required to file electronically.

For small exempt organizations, the legislation specifically allows a postponement (“transitional relief”). For tax years ending before July 31, 2021, the IRS will accept either paper or electronic filing of Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. For tax years ending July 31, 2021, and later, Forms 990-EZ must be filed electronically.

For taxable years beginning before 2020, there are some listed e-filing exceptions, copied below. This applies to Forms 990, 990-PF, and 990-EZ.  

"If you are filing a 20YY Form 990 for a tax year beginning on or after July 2, 20YY, you are required to file electronically unless one or more of the following exceptions apply.

  1. The name of the organization has changed, the new name is entered on Form 990-EZ, and the “Name change” box is checked in Item B.
  2. Form 990-EZ is for a short period because of an accounting period change. This does not apply if (a) the short period is an initial return and the “Initial return” box is checked in Item B; or (b) the short period is for a final return, and the “Final return/terminated” box is checked in Item B. 
  3. An application for exemption is pending, and the “Application pending” box is checked in Item B.
  4. Form 990-EZ is being filed before the end of the tax year. This does not apply if the return is a final return, and the “Final return/terminated” box is checked in Item B.
  5. You attempted to file Form 990-EZ electronically, but the return was rejected (even after you contacted your e-file provider). For exceptions 1 through 4 above, file a paper Form 990-EZ.
    • For exception 5, file a paper Form 990-EZ as prescribed in section 5.7 of Pub. 4163, Modernized e-File (MeF) Information for Authorized IRS e-File Providers for Business Returns.

The IRS may waive the requirements to file electronically in cases of undue hardship. For more information on filing a waiver, see Notice 2010-13, 2010-4 I.R.B. 327, available at IRS.gov/irb/2010-04_IRB. Acceptance of returns filed on paper. Although electronic filing of Form 990-EZ is required as described above, the IRS will continue to accept Forms 990-EZ filed on paper for tax years beginning before July 2, 20YY."

For more information, see the IRS website

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