Attention FAE Customers:
Please be aware that NASBA credits are awarded based on whether the events are webcast or in-person, as well as on the number of CPE credits.
Please check the event registration page to see if NASBA credits are being awarded for the programs you select.

IRS: Some Tax-Exempt Organizations Cannot E-File Until March Due to IRS Systems Upgrades

S.J. Steinhardt
Published Date:
Jan 19, 2024

A limited number of tax-exempt organizations have been told by the IRS that they will not be able to file two forms electronically until March 17, due to IRS systems upgrades, the agency announced.

The affected forms, Form 990-T, Exempt Organization Business Income Tax Return and Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations (including returns on extension) with due dates from Jan. 15 to March 15, 2024, are currently unavailable.

With regard to Form 990-T, the IRS said that organizations subject to unrelated business income tax (UBIT) are required by law to file that form electronically. It stated, "An organization with a Form 990-T due from Jan.15, to March 15, 2024, should request an automatic six-month extension of time to file by submitting Form 8868, Application for Extension of Time To File an Exempt Organization Return, by the due date of the return. The IRS estimates only about 2,000 of the 200,000 Form 990-T filers have a due date in this time period and are affected by this. Any balance due must be submitted with Form 8868 to avoid interest and penalties. Beginning March 17, 2024, organizations will be able to timely e-file Form 990-T by the extended due date."

With regard to Form 1120-POL, the IRS said that organizations filing a form that is due from Jan. 15 to March 15, 2024, (including returns on extension) may file on paper. It stated, "An organization that wishes to e-file a return with an original due date during that period may request an automatic six-month extension of time to file Form 1120-POL by submitting Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, and paying the full balance due with that form to avoid interest and penalties. As noted earlier, only a handful of these groups typically file electronically in the affected time period."

Taxpayers with due dates on April 15, 2024, and later will be able to e-file Forms 990-T and Forms 1120-POL on time.

The IRS said that previous filing data showed that only about 2,000 Forms 990-T and 1120-POL were electronically filed between Jan. 15 and March 15,, with the vast majority of those involving 990-T.

The IRS added that the electronic filing delay won't affect the ability of government entities and Indian tribal governments—that aren't subject to unrelated business income tax (UBIT)—to file Form 990-T in a timely fashion to make an elective payment election (EPE) for Clean Energy Tax Credits. An EPE is available for tax years beginning in 2023; therefore the returns won't be due until after March 17.

The IRS added that, under the law, an entity can't receive the elective payment amount before the original due date of the return.

Click here to see more of the latest news from the NYSSCPA.