On March 15, 2021, the IRS announced in an e-News Update for Charities & Nonprofits that mandatory electronic filing of 2020 Forms 990-T has commenced.

The Taxpayer First Act of 2019 (Pub. L. 116-25) mandated electronic filing for Form 990-T among other things for tax years beginning after July 1, 2019. However, the IRS was delayed in converting their eservices to be able to accept Forms 990-T filed electronically. Because of this, the IRS continued to accept paper returns filed on the 2019 version of the form.

Beginning March 16, 2021, all 2020 Forms 990-T must be electronically filed. The IRS instructions have been updated to reflect the mandatory e-filing requirement for 2020 returns with due dates on or after April 15, 2021. The IRS will accept completed 2020 Forms 990-T in paper format that were postmarked on or before March 15, 2021. Although the instructions suggest that limited exceptions apply to the electronic filing mandate, they do not detail what those exceptions might be.

We have already seen the IRS issue 990-T rejection letters for paper-filed returns. The IRS rejection letters note that the Taxpayer First Act requires tax-exempt organizations to electronically file information returns and related forms on or after July 1, 2020. The IRS has even been rejecting 2019 year Forms 990-T in contradiction to the IRS e-News Update noted above.

Be advised that all Forms 990-T must now be electronically filed to the IRS.

If your exempt organization needs assistance with filing your Form 990-T electronically, contact PBMares’ Not-for-Profit Team.