New Law Requires e-Filing for Tax-Exempt Organizations

Organizations that are tax exempt under section 501(a) must begin filing their annual tax forms electronically, according to The Taxpayer First Act of 2019 signed into law last summer. In December, the IRS announced that the new law affects tax-exempt organizations in tax years beginning after July 1, 2019. The following tax forms are included in the mandate and must be filed electronically: 

• Form 990: Return of Organization Exempt from Income Tax (for taxable years beginning after July 1, 2019)

• Form 990-PF: Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation (for taxable years beginning after July 1, 2019)

• Form 8872: Political Organization Report of Contributions and Expenditures (for taxable years beginning after July 1, 2019)

• Form 1065: U.S. Return of Partnership Income (if filed by a Section 501(d) apostolic organization) (for taxable years beginning after July 1, 2019)

• Form 990-EZ: Short Form Return of Organization Exempt From Income Tax (for taxable years beginning after July 1, 2021)

• Form 990-T: Exempt Organization Business Income Tax Return (for taxable years beginning in 2020)

• Form 4720: Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code (for taxable years beginning in 2020)

What Does This Mean for Your Nonprofit?

If your organization files its tax returns the old fashioned way (on paper), you’ll no longer have that option for the forms listed above and will receive a notice of this change from the IRS. Some organizations may be exempt from this new electronic filing requirement. To determine if your nonprofit is exempt, check the instructions on each of the forms you are responsible for submitting here.

As of the publication of this blog post, the e-filing mandate is in effect for forms 990, 990-PF, and 8872. For help finding e-file provider companies that have passed certain IRS requirements, visit the IRS’s Exempt Organizations Modernized e-File (MeF) Providers page. Be sure to read the information carefully as every provider listed may not meet all the needs of your organization.

Baker Tilly has a great breakdown of how the rules may affect you here.

Let Us Help You

At Resilia, we ensure our clients always have the latest information and regulatory changes that can affect their organization. Changes like this new electronic tax form filing mandate are complicated—but that’s why we’re here. Contact us to learn how we can help you keep your nonprofit compliant so you can stay focused on your mission.

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Photo cred: The Miami Foundation, Miami Herald