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IRS Form 990-T Penalties

In this article we will cover the following points:


The IRS Mandates
E-File of Form 990-T

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Form 990-T late filing penalties for Tax-Exempt Organizations

- Updated April 21, 2023 - 10.00 AM - Admin, ExpressTaxExempt

The IRS penalizes exempt organizations for missing their Form 990-T deadline, unless they provide a reasonable explanation for the filing delay.

1. Reasons for IRS penalties

Here are the reasons that the IRS usually penalizes organizations:

  • Late filing or not applying for an extension
  • Not paying the due tax amount on time
  • Incorrect filing
  • Incomplete or missing information on Form 990-T
  • Failure to attach required schedules
  • Missing signature
  • Not filing on proper media (For instance, not filing electronically when e-filing is mandatory)

The IRS may waive penalties for late filed forms if the organization can provide a reasonable explanation for the delay.

2. What is the penalty for late filing Form 990-T?

The IRS penalizes tax-exempt organizations for filing Form 990-T late or paying their taxes late.

a) Penalties for late filing Form 990-T

Organizations that fail to file their IRS Form 990-T on time (including extended deadlines) are penalized 5% of the unpaid tax for each month or part of a month that the return is late. The maximum penalty is 25% of the unpaid tax. If your return is more than 60 days late, the maximum penalty is $435.

The only way to avoid penalties on a
late Form 990-T is to provide a reasonable explanation to the IRS.

b) Penalties for late tax payments

The penalty for paying taxes late is usually half of 1% of the unpaid tax for each month or part of a month that the tax is unpaid. Penalties cannot exceed 25% of the unpaid tax amount.

3. IRS penalty relief

Under certain circumstances, such as natural disasters, fires, inability to record, death, or severe illness, the IRS provides penalty relief for late or incorrect filing.

Also, if your organization receives a notice from the IRS and solves the issue within the stipulated time, penalties may not be imposed.

Penalties eligible for relief include:

  • Failure to file a tax return
  • Failure to pay the due tax amount on time
  • Failure to deposit certain taxes as required
  • Other penalties as applicable

4. Avoid Late Filing Penalties by E-filing your Form 990-T with ExpressTaxExempt

To file your Form 990-T on time and avoid late filing penalties, choose an IRS authorized e-file service provider like ExpressTaxExempt!

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