Additional Filing Extensions for Tax-Exempt Organizations
Tax-Exempt Organizations Alert 04/14/20 Norah L. Jones, Jodi P. Patt, Corbin J. Morris, Zeljko Popovic
A recent Client Alert (available here), reported on Internal Revenue Service (“IRS”) Notice 2020-18 and the extensions it provided for certain tax return filing and income tax payment deadlines in response to the ongoing COVID-19 pandemic. However, the only relief the IRS provided at that time to tax-exempt organizations was to postpone until July 15, 2020, the deadlines for unrelated business taxable income filings (Form 990-T) and payments originally due on April 15, 2020. No other exempt organization return or payment deadlines were extended at that time.
Fortunately, on April 9, 2020, the IRS issued additional guidance in the form of Notice 2020-23 (the “Notice”), which effectively delays the filing and payment deadlines for a number of federal filings, including all Forms 990, 990-EZ, 990-PF, and 990-T, that would have been due on or after April 1, 2020, and before July 15, 2020. The new deadline for these filings and related payments is July 15, 2020.
Exempt Organization Filings Impacted
The Notice specifically provides that the following forms (and corresponding tax payments) that were due (either originally or via a valid extension) at any time between April 1 and July 14, 2020, are now due on July 15, 2020:
- Form 990-PF (Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation),
- Form 4720 (Return of Certain Excise Taxes Under Chapters 41 and 42),
- Form 990-T (Exempt Organization Business Income Tax Return), and
- Form 990-W (Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations).
Although the Notice does not mention other key exempt organization filings by name, it effectively extends the deadlines for such filings by providing relief to taxpayers and filers performing certain “time sensitive actions” referred to in other IRS guidance, including Revenue Procedure 2018-58. Such time sensitive actions include the filing of:
- Form 990 (Return of Organization Exempt from Income Tax) and the others in that series (i.e., Form 990-EZ and Form 990-N),
- Form 1023 (Application for Recognition of Exemption under Section 501(c)(3)) and Form 1023-EZ (both of which typically must be filed within 27 months of the organization’s date of incorporation),
- Form 8976 (Notice of Intent to Operate Under Section 501(c)(4)), and
- Form 5768 (also known as the “501(h) election”).
Accordingly, any of these filings that were due (either originally or via a valid extension) at any time between April 1 and July 14, 2020, are now due on July 15, 2020, as well.
No Extension Requests Required
The relief granted as a result of the Notice is automatic; the deadlines for filing the forms and making any corresponding tax payments have been automatically extended to July 15, 2020, without any further action required by any taxpayer or filer. Tax-exempt organizations need not file any additional forms (e.g., Form 8868) to benefit from the due date relief resulting from the Notice.
Estimated Tax Payments
One oversight of Notice 2020-18 was that it pushed back the first quarter estimated tax payment deadline from April 15, 2020, to July 15, 2020, but left the second quarter estimated tax payment due on June 15, 2020. This created an illogical scenario of the second quarter estimated tax payment being due before the first quarter estimated tax payment. The Notice fixes this by providing that any estimated tax payment that would have been due on or after April 1, 2020, and prior to July 15, 2020, will now be due on July 15, 2020.
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