IRS Mandates Electronic filing of Form 990 for
Tax-Exempt Organizations – New rules under the Taxpayer First Act
Electronic Filing Requirements of Form 990 for Nonprofits and Tax Exempt Organizations- Updated April 21, 2023 - 11.00 AM Admin, ExpressTaxExempt
IRS Announced the New mandatory filing requirement for Tax-Exempt Organizations.
On July 1, 2019, The Taxpayer First Act of 2019 was signed into law, which focuses on broadly redesigning the Internal Revenue Service rules to be more friendly for every taxpayer.
In addition, The IRS plans to meet these act requirements by
- Developing comprehensive customer service
- Modernizing its technology
- Enhancing its cybersecurity
1. Taxpayer First Act of 2019 - Filing Requirements for Tax-exempt organization
The Act now mandates that the following forms need to be electronically filed as of the first taxable year beginning after July 1, 2019:
- Form 990, Return of Organization Exempt for Income Tax
- Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as a Private Foundation
- Form 8872, Political Organization Report of Contributions and Expenditures
- Form 1065, U.S. Return of Partnership Income (if filed by a section 501(d) apostolic organization)
2. Form 990, and 990-PF E-filing
For the tax years ending on or before June 30, 2020, forms can be still filed as a paper format. However, the IRS recommends tax-exempt organizations to file 990 Forms electronically for quicker processing and instant approval.
In the case of a short tax year or certain other circumstances detailed in the 990, or 990-PF Instructions, the IRS will continue to accept paper filing as their systems are not yet able to receive the forms electronically.
3. Form 990-EZ Transition Relief
Small exempt organizations filing Form 990-EZ have been specifically allowed with a postponement (Transitional relief). Under this relief, the IRS will accept either the paper format or electronic filing of the Form 990-EZ, Short Form Return of Organization Exempt from Income Tax filed by organizations with a tax year ending before July 31, 2020. However, for organizations with a tax year ending July 31, 2021, and later, the 990-EZ return by filed electronically.
Form 990-EZ is generally filed by organizations with annual gross receipts less than $200,000 and total assets less than $500,000 at the end of the tax year.
4. Existing e-filing requirements for Tax-Exempt Organizations
The IRS has already mandated the 990 electronic filing requirements for the following tax-exempt organizations:
- Small Tax-Exempt Organizations whose gross receipts less than $50,000, must file their 990-N electronically.
- An organization with more than 250 returns to file for the calendar year: including income tax, employment tax, and information returns
(e.g. Forms 1099 and W-2).
- Organizations having total assets of $10 million or more at the end of the
Choose the IRS Authorized e-file providers like ExpressTaxExempt to file 990 Forms accurately and securely.
Benefits of filing 990 Forms Electronically
- Faster Processing
- Less time to create your returns
- Greater Accuracy
- More secured transition
- No Paper Works
- Avoid manual errors
- Avoid the time-consuming process
- No need to wait in a long queue
5. Choose ExpressTaxExempt to file your 990 tax returns electronically
To file 990 Forms electronically, you can get started with the IRS authorized e-file providers like ExpressTaxExempt.com.
Our Software will make the filing process simple for you with step by step interview-style filing process and generate the required 990 schedules automatically for you based on the information that you provide.
If you have to correct already filed Form 990 with the IRS, you can correct the information and file the amended return to the IRS.
Even if the IRS rejects your returns for any reason, you can fix and retransmit it for Free. By filing electronically with our software, you get to know the status of your submitted forms instantly.
6. Other Requirements under the Taxpayer First act of 2019
The paper filed Form 8872 reported after 2019 by an organization will no longer be accepted by the IRS.
The information that needs to be reported on Form 8872 for the period starting on or after January 2020 must be reported electronically by Section 527 organizations. These include political parties, political action committees, and campaign committees of candidates for federal, state, or local office.
Paper Filing Requirements for 990-T and 4720
In the year 2020, Form 990-T, Exempt Organization Business Income Tax Return, and Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the IRC Code which awaits for pending conversion into electronic format will be now accepted as a paper form by the IRS.
Once the forms are reported for the tax year (2021), the IRS plans to have them ready for the e-filing process in 2022.