Close
Close

Taxpayer First Act brings filing changes for tax-exempts

RFP
Tax Hot Topics newsletter The Taxpayer First Act (H.R. 3151), signed into law on July 1, 2019, will soon require all tax-exempt organizations to electronically file their annual Forms 990, 990-PF, 990-EZ, and 990-T. Section 527 organizations will also have to e-file their Forms 8872 (periodic contribution and expenditure reports)

Currently, organizations which 1) have $10 million in assets and 2) file 250 or more forms annually with the IRS must e-file their Form 990. That minimum threshold is now eliminated so smaller organizations which paper-file their Forms 990 will need to change their process.

The effective date for this requirement is for organizations with a calendar year beginning on or after Jan. 1, 2020 (returns due May 15, 2021), and for fiscal-year filers with a tax year beginning after July 2, 2019. For example, an organization which has a fiscal-year end Aug. 31, 2020, will have to e-file their Form 990 by Jan. 15, 2021. Paper filing will be discontinued by 2022.

Organizations which file the Form 990EZ (gross receipts less than $200,000 and assets less than $500,000) may receive transitional relief from IRS for up to two years, but the IRS has not yet acted to extend such relief.

Forms 990T must also be e-filed, but the IRS does not currently have a mechanism to accept Forms 990-T electronically. The IRS is expected to hasten the development of that process in light of the new law.

Churches and other organizations exempt from filing Forms 990 are not affected by the law.

The Taxpayer First Act also requires the IRS to contact organizations before automatically revoking tax-exempt status for organizations that have not filed a Form 990 for three years. Organizations should make sure their contact information is correct in IRS records so they would receive such notification.

Finally, the Taxpayer First Act mandates the IRS to make Form 990 readily available to the public “as soon as practicable in a machine readable format.” The IRS has already taken large strides in the digitization of the information through the use Amazon Web Services, but this law seeks to extend the availability of this information to the public, charity watchdog groups, the media and other interested persons.

Contacts
Mary Torretta
Senior Manager
Arlington Office 
T +1 703 847 7659

Frank Giardini
National Tax Leader, Life Sciences
Philadelphia Office  
T +1 215 656 3060

Tax professional standards statement 
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.