Recently, the Department of the Treasury published final regulations, “Electronic-Filing Requirements for Specified Returns and Other Documents,” implementing the reduced electronic threshold under Section 2301 of the Taxpayer First Act of 2019 (TFA). Under the regulations found in T.D. 9972 (PDF), taxpayers who are required to file at least 10 returns of any type during the calendar year must file electronically. Generally, the regulation applies after 2023. See the regulations for detailed dates of applicability to specific returns.

Among others, the regulations apply to the following forms:

Exempt Organizations

5227, Split-Interest Trust Information Return
4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the IRC (if filed by other than a private foundation)
1120-POL, U.S. Income Tax Return for Certain Political Organizations

Employee Plans

8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits
5500-EZ, Annual Return of A One-Participant (Owners/Partners and Their Spouses) Retirement Plan or A Foreign Plan
5330, Return of Excise Taxes Related to Employee Benefit Plans

Government Entities

8596, Information Return for Federal Contracts
8038-CP, Return for Credit Payments to Issuers of Qualified Bonds

Under Internal Revenue Code Section 6011(e)(2)(B), the regulations take into account the ability of the taxpayer to e-file at reasonable cost. On a year-by-year and form-by-form basis, the IRS may waive the requirement to file electronically in cases of undue hardship. In certain circumstances, a filer may be administratively exempt from the requirement to file electronically. The instructions to each form will set forth details on the waiver. In general, the filer should maintain documentation supporting the undue hardship or other applicable reason for not filing electronically.

Additionally, Section 3101 of the TFA sets forth “mandatory e-filing by exempt organizations,” which is already in effect. This applies to the following forms:

4720 (if filed by a private foundation)
990, Return of Organization Exempt from Income Tax
990-EZ, Short Form Return of Organization Exempt from Income Tax
990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation
990-T, Exempt Organization Business Income Tax Return

Reminder to Tax-Exempt Organizations: May 15 Filing Deadline

The Internal Revenue Service reminds tax-exempt organizations that many have a filing deadline of May 15, 2023. Those that operate on a calendar-year basis have certain annual information and tax returns they file with the IRS. These returns are:

Form 990-series annual information returns (Forms 990, 990-EZ, 990-PF)
Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ
Form 990-T, Exempt Organization Business Income Tax Return (other than certain trusts)
Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code

Extension of Time to File

Tax-exempt organizations that need additional time to file beyond the May 15 deadline can request a 6-month automatic extension by filing Form 8868, Application for Extension of Time To File an Exempt Organization Return (PDF). In situations where tax is due, extending the time for filing a return does not extend the time for paying tax. The IRS encourages organizations requesting an extension to electronically file Form 8868.

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