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The Taxpayer First Act

On July 1, 2019 President Donald Trump signed the Taxpayer First Act, which requires tax-exempt organizations to file all Form 990 series returns electronically, which constitutes a significant departure from previous requirements.

Historically, only certain tax-exempt organizations were mandated to file annual returns electronically, specifically:

  • Large organizations with assets of $10 million or more and file at least 250 returns annually;
  • Private foundations and Section 4947(a)(1) trusts that file at least 250 returns annually; and
  • Small organizations electing to file a 990-N.

The Taxpayer First Act is effective for tax years beginning after July 1, 2019. In an attempt to assist with the transition, a provision will allow the Secretary of Treasury to provide relief for up to two years. Those eligible for transitional relief are:

  • Form 990-T filers;
  • Organizations with gross receipts less than $200,000, and gross assets less than $500,000; and
  • Any organization which includes information under subsection (e) of section 6033

If a Form 990 series return has not been filed in three years, the organization will lose its tax-exempt status. Previously, notification would not be issued until after the infraction forcing the organization to reapply for tax-exempt status. However, under the new provision, the IRS will notify the organization after the second year of non-filing, providing them the opportunity to file and keep their tax-exempt status.

Please contact us with any questions or concerns regarding this new process.