Form 990 Electronic Filing Requirements Expanded

Presenters/Authors
Tax planning and consulting services

The Taxpayer First Act of 2019, H.R. 3151 (Act), signed into law on July 1, 2019, revised various IRS operating and enforcement requirements. One provision of the Act extended the electronic filing requirement to all tax-exempt organizations required to file returns in the Form 990 series.

Previously, the e-filing requirement applied only to the following tax-exempt organizations:

  • Organizations with assets of $10 million or more that file at least 250 returns during a calendar year
  • Private foundations and charitable trusts, regardless of asset size, that file at least 250 returns during a calendar year
  • Organizations that normally have gross receipts of less than $50,000 (file an abbreviated electronic Form 990-N)

In determining whether the 250-return threshold is met, income tax, information, excise tax and employment tax returns filed within one calendar year are counted. In addition, the Act now requires all tax-exempt organizations to e-file their returns, including Form 990-T, regardless of gross receipts. The requirement is effective for taxable years beginning after July 1, 2019.

Transition relief is provided to certain small organizations for which the Secretary of the Treasury determines that application of the e-filing requirement would constitute an undue hardship. These organizations must begin e-filing their returns no later than taxable years beginning on or after July 1, 2021. For this purpose, a small organization is defined as any organization with 1) gross receipts less than $200,000 for the taxable year and 2) gross assets less than $500,000 at the end of the taxable year. The Act grants the IRS the discretion to grant the same transition relief period to Form 990-T filers.

An additional Act provision requires the IRS to issue a notice to a tax-exempt organization prior to revoking its tax-exempt status for failure to file a return. The notice must be issued after an organization has failed to file returns for two consecutive years. An organization that fails to file a return for three consecutive years may have its tax-exempt status automatically revoked.

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