IRS Provides Limited Coronavirus Pandemic Tax Filing and Income Tax Relief to Tax-Exempt Organizations
Tax-Exempt Organizations 03/30/20 Norah L. Jones, Jodi P. Patt, Zeljko Popovic
On March 18, 2020, the IRS released Notice 2020-17 in response to President Trump’s March 17, 2020 “Emergency Declaration” under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Notice 2020-17 drew widespread criticism from tax practitioners and lawmakers, and was superseded just two days later with the release of Notice 2020-18. Notice 2020-18 (the “Notice”) took the unprecedented action of officially pushing back the federal income tax return filing and income tax payment deadlines to July 15, 2020. Subsequently, the IRS released additional guidance relating to the Notice, available here.
While the Notice is welcome news for most taxpayers, it offers only limited relief to most tax-exempt organizations. The Notice specifically states that it does not apply to federal information returns. Accordingly, the Form 990 series information returns (e.g., Form 990, Form 990-EZ, Form 990-PF) are not within the scope of the filing and payment relief. Absent further guidance, this means that all Form 990 series returns are due on their original or extended deadlines: For example, a Form 990-PF for a May 31, 2019, fiscal year-end private foundation that has filed the standard extension request will continue to be due on April 15, 2020.
Further, the relief granted in the Notice does not apply to any excise tax liability. This means that excise tax payments required under any of 4958, 4959, the donor advised fund excise tax regime, or the private foundation excise tax regimes continue to be due on their regular dates.
The limited good news for certain tax-exempt organizations contained in the Notice is that the filing and payment relief applies to certain unrelated business taxable income filings and payments that would otherwise be due on April 15, 2020. Forms 990-T and any unrelated business income tax for the 2019 tax year that are due to be filed and paid on April 15, 2020, may be deferred until July 15, 2020. It is important to emphasize that this deferment applies only to Forms 990-T due on April 15, 2020. No postponement of the deadlines for filing Forms 990-T or payments of unrelated business tax that are due on any date other than April 15, 2020, is currently available; accordingly, all filings and payments due on dates other than April 15, 2020, will continue to be due on their original dates unless and until further notice.
Officials at all levels of government are reacting as the Covid-19 situation as it unfolds. We remain hopeful that further guidance will be issued that address these (and other) issues for the nonprofit sector, and we will continue to provide updates if any is released. Additionally, please check our COVID19 Guidance for Clients or with your Quarles & Brady attorney for any future developments or guidance from the IRS or anticipated federal Covid-19 stimulus package and its effect on your business.
This update is intended as a general summary of legal matters and not as specific advice to any particular client. If you have any questions concerning the subject matter of this update, please contact your Quarles & Brady attorney or: