IRS Extends Form 990s and 5500s Tax Filing Relief to July 15, 2020

In response to the COVID-19 pandemic, the IRS has offered tax payment and filing extension to a variety of taxpayers and businesses. Until now, many nonprofits, including labor unions and multiemployer VEBAS wondered if an extension to file the Form 990 series of returns would be granted. Good news for tax-exempt organizations came on April 9, 2020, when the IRS expanded its relief efforts to allow Form 990 filers the opportunity to extend May 15, 2020, filings two months out to July 15, 2020.

On April 9, 2020, the IRS issued Notice 2020-23, which amplifies Notice 2020-18, 2020-15 IRB 590 (April 6, 2020) and Notice 2020-20, 2020-16 IRB 660 (April 13, 2020). This new notice provides additional relief to affected taxpayers with a federal tax payment obligation or federal tax return or other form filing obligation, which is due to be performed (originally or pursuant to a valid extension that ends) on or after April 1, 2020, and before July 15, 2020, an automatic postponement to file and/or pay to July 15, 2020.

Qualifying Tax-Exempt Time-Sensitive Actions

The Notice also granted relief to a variety of time-sensitive actions, including those listed in Rev. Proc. 2018-58. Section 10 of Rev. Proc. 2018-58 covers certain tax-exempt entities assuming they qualify as an affected taxpayer. Affected taxpayers are defined in the Notice as any person or organization performing a “time-sensitive action” between April 1, 2020, and before July 15, 2020. Time-sensitive actions relevant to nonprofits and foundations include:

• The filing of Form 990 series annual returns.
• The filing of Form 1023, Application for Recognition of Exemption under 501(c)(3).
• Tax-exempt hospital organizations conducting a community health needs assessment.

Forms 990, 990T and 990-PF Extension Rules

Form 990s with a previous six-month extension to file must file on or before July 15, 2020. If the original due date of Form 990 is May 15, 2020, the organization may either:

• File an extension of time through November 15, 2020, on or before May 15, 2020.
• File an extension of time to file on or before July 15, 2020, extending the final due date to November 15, 2020.
• The notice provided an expansive list of federal returns and payments applicable to tax-exempt organizations with an original due date of May 15, 2020. Those qualifying under this postponement include:
  • Form 990, Return of Organization Exempt From Income Tax.
  • Form 990-T, Exempt Organization Business Income Tax Return.
  • Form 990-PF, Return of Private Foundation.
  • Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code.

This relief is automatic; affected taxpayers do not have to call the IRS, file any extension forms or send letters or other documents to receive this relief. However, affected taxpayers who need additional time to file may choose to file the appropriate extension form by July 15, 2020, to obtain the extension. All filings may not go beyond the original statutory or regulatory extension date.

Form 5500

Forms 5500 with June 30, 2019 – August 31, 2019 year ends receive additional time to file under Notice 2020-23 to July 15, 2020.

Form 990 Series Tax Filing Extension Conclusion

Under the Notice, calendar year Forms 990, 990-PF and Form 990-T returns due May 15, 2020, are now due on or before July 15, 2020. Form 8868, Application for Automatic Extension of Time to File an Exempt Organization Return, may be filed to request an additional extension of time to file to November 15, 2020. Note that taxes owed with Form 990-PF and Form 990-T are due at the time of the filing of the extension, July 15. An organization, with a fiscal year ended June 30, 2019, which has previously extended the filing of its 2018 Form 990, Form 990-PF and or Form 990-T must file its 2018 return on or before July 15, 2020.

For additional insights on how we can help you and your organization during this challenging time, visit our COVID-19 Resource Center.

Authors: Richard Ruvelson | rruvelson@withum.com and Kevin Margiatto | kmargiatto@withum.com