WASHINGTON, D.C. — A recent announcement from the Internal Revenue Service (IRS) has revealed that a particular group of tax exempt organizations will face delays regarding the electronic filing of their Form 990-T and Form 1120-POL. This deferment, set until March 17, 2024, is due to necessary system updates and will impact organizations with due dates ranging from January 15 to March 15, 2024. The affected group, consisting of only an estimated 2,000 organizations, is relatively small.
Form 990-T, known as the Exempt Organization Business Income Tax Return, and Form 1120-POL, or the U.S. Income Tax Return for Certain Political Organizations, are essential documents for organizations subject to the unrelated business income tax (UBIT). To avoid falling behind under these circumstances, the IRS is urging the impacted organizations to request an automatic six-month extension for filing. This can be achieved by submitting Form 8868 for Form 990-T, or Form 7004 for Form 1120-POL.
However, this delay does not mean organizations can postpone their tax payments. The IRS has pointed out that any balance due must accompany the extension form to stave off interest and penalties. Come March 17, 2024, organizations will regain the ability to e-file their forms by the newly extended deadline.
For organizations required to file Form 1120-POL, paper filing is an option during this period if their original due date falls within the delay window. It’s worth noting that typically only a limited number of these organizations opt for electronic filing during this specific timeframe.
Worth noting is that this delay is not applicable to government entities and Indian tribal governments, provided they are not subject to UBIT. Such entities remain capable of timely filing Form 990-T to facilitate an elective payment election (EPE) for the Clean Energy Tax Credits. The EPE comes into effect for the tax years commencing in 2023, with returns not due until after the electronic filing system is back up and running.
Even though the electronic filing requirement has been eliminated for the government entities and Indian tribal governments, the IRS still encourages all taxpayers to e-file their returns. This delay underscores the importance of tax exempt organizations staying current with their tax compliance and keeping themselves regularly informed about IRS updates and stipulations.
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