IRS Experiencing Delays: Exempt Organizations are Encouraged to e-file Forms 8868 and 990-ez

The Internal Revenue Service (IRS) recently announced that it is experiencing delays in processing paper-filed returns.

The IRS emphasized that organizations that filed and continue to paper file Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, and Form 8868, Application for Extension of Time to File an Exempt Organization Return, may potentially be at risk of receiving premature notices for failing to file the required returns.  Paper filing may also cause a delay in receiving the IRS extension approval confirmation letter. Therefore, organizations are strongly advised to file these forms electronically.

However, it should be noted if such forms had already been paper filed, no further actions should be taken.  The IRS has indicated that organizations should not submit a copy of the originally filed return.  The IRS is also requesting that organizations not contact its offices to question the status.

The Taxpayer’s First Act, enacted in July of 2019, requires tax-exempt organizations to electronically file information returns.  The new law affects tax-exempt organizations in tax years beginning after July 1, 2019.   For small tax-exempt organizations, the legislation specifically allowed for a transitional period. For tax years ending before July 31, 2021, the IRS will accept either paper or electronic filing of Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. For tax years ending July 31, 2021, and later, Forms 990-EZ must be filed electronically.