Changes in 990-EZ E-Filing Requirements: What Non-Profits Need to Know

In recent years, significant changes have been made to the e-filing requirements for Form 990-EZ, which may impact many non-profit organizations. These changes are part of the Taxpayer First Act, enacted on July 1, 2019, and they bring a critical shift in how tax-exempt organizations file their information returns. Understanding these changes is essential for non-profits to ensure compliance and avoid potential penalties.

Overview of the Taxpayer First Act

The Taxpayer First Act mandates that tax-exempt organizations electronically file information returns and related forms starting from tax years beginning after July 1, 2019. This move towards digital submission aims to streamline the filing process, improve accuracy, and enhance the IRS's ability to process returns efficiently.

Transitional Relief for Small Exempt Organizations

Recognizing that smaller non-profits might need additional time to adapt to these changes, the legislation provided transitional relief. For tax years ending before July 31, 2021, the IRS accepted both paper and electronic filings of Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. This transition period allowed organizations to gradually shift to the electronic filing system without immediate disruption.

Mandatory E-Filing for Tax Years Ending July 31, 2021, and Later

However, this transitional relief was temporary. For tax years ending July 31, 2021, and onwards, the IRS now requires all Forms 990-EZ to be filed electronically. This means that any hard copies of Form 990-EZ sent to the IRS for the tax years 2021 and 2022 were likely not processed. Non-profits that continued to send paper copies need to take immediate action to comply with the e-filing requirements.

Potential Impacts on Non-Profits

The shift to mandatory e-filing can significantly impact non-profits that were accustomed to submitting paper returns. Here are a few potential issues and steps to address them:

1. Unprocessed Returns: Paper copies of Form 990-EZ sent for tax years ending July 31, 2021, and later may not have been processed. This could affect your organization's compliance status and result in penalties.

2. Tax Exemption Status: Failure to comply with the e-filing requirements might jeopardize your organization's tax exemption status. It's crucial to verify the status of your prior years' tax returns and ensure all future filings are done electronically.

3. IRS Contact: To clarify the status of previous tax returns and confirm your current tax exemption status, contact the IRS Tax Exempt Account Services at 877-829-5500 (toll-free).

How to Comply with the New E-Filing Requirements

To comply with the new e-filing requirements for Form 990-EZ, non-profits should:

• Adopt an E-Filing Solution: Utilize IRS-authorized e-filing services like 990.tax that are designed to simplify the filing process for non-profits.
• Stay Informed: Regularly check the IRS website for updates and additional guidance on e-filing for charities and non-profits.
• Seek Professional Assistance: If needed, consult with a tax professional or service that specializes in non-profit tax filings to ensure compliance.

Conclusion

The changes in 990-EZ e-filing requirements represent a significant shift for non-profits, emphasizing the importance of adapting to electronic submission methods. By understanding these changes and taking proactive steps to comply, non-profit organizations can avoid potential issues and continue to benefit from their tax-exempt status. Stay informed, utilize reliable e-filing services, and ensure your filings are timely and accurate.

For more information on e-filing requirements and assistance with your 990-EZ filings, visit the . IRS E-file for Charities and Non-Profits page.