Not-For-Profit Information Center

Tax Exempt Organization Update: New Electronic Filing Requirements and Penalties

The Internal Revenue Service has updated its mandatory electronic filing requirements. After the phase-in date(s) outlined in this update, paper filed returns will be returned to the organization unless:

  • It is filed as part of re-instatement or a penalty abatement request.
  • There is a change in tax period, i.e., from calendar to fiscal.
  • The filing year is outside of the IRS 3-year period.

The electronic filing requirements are as follows:

  • Form 990-PF – Tax Years ending July 31, 2020 and later
  • Form 990 – Tax Years ending July 31, 2020 and later
  • Form 990-EZ – Tax Years ending July 31, 2021 and later
  • Form 990-T – Effective for 2020 returns due April 15, 2021 or later
  • Form 4720 – Effective for 2020 forms due July 15, 2021 or later
  • Form 1023 – Effective February 1, 2020
  • Form 1024-A – Effective January 6, 2021

There have been changes to penalties in 2022 for failure to file as well.  Those are as follows:

  • Form 990-T – Lesser of $450 or 100% of the amount of tax
  • Forms 990, 990-EZ or 990-PF – $20 per day not to exceed $11,000 or 5% of gross receipts (for organizations with gross receipts less than $1,129,000)
  • Forms 990, 990-EZ or 990-PF – $110 per day not to exceed $56,000 (for organizations with gross receipts greater than $1,129,000)

With regards to changes at the state level, as a result of the U.S. Supreme Court’s decision in Americans for Prosperity Foundation v. Bonta, the New Jersey Division of Consumer Affairs Charities Section and New York State Attorney General’s Office Charities Bureau have suspended their requirement for a completed schedule to be attached to the submission.

Sax’s Not-for-Profit Practice will continue to keep you updated on changes as they emerge.  For any questions relating to the new filing requirements, feel free to reach out to your advisor.

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