03/05/2020

IRS Announces Numerous Changes

Under TFA, nonprofits must file their 990 informational returns electronically

Online filings with the Internal Revenue Service (IRS) will become "the norm" for the nation’s charities thanks to Congressional action last year aimed at increasing the transparency of operations within the charitable sector. The Taxpayer First Act, House Resolution 3151, is hoped to reduce fraud and open data for researchers, charitable leaders and others interested in the valuable nonprofit data handled by the IRS.
 
Under the law, charitable organizations must file their 990 informational returns electronically and the IRS must make that information available to the public in a machine-readable, searchable format. Previously, charities could elect whether to file electronically or by paper. Additionally, the IRS announced that all Form 1023s, which are used to request tax exemption from the IRS, must be filed electronically. User fees can be paid electronically from a bank account or by credit or debit card.
 
It is expected that access to the data will help charitable leaders in making decisions about gaps in services in a region, comparing operations with other similar organizations, and other planning efforts. Researchers will have more robust data to examine trends in the sector, and regulators will be able to use the information to identify potential fraud issues.
 
In other IRS news, there has been a retroactive repeal of provisions related to Unrelated Business Taxable (UBIT) Income that affected parking benefits. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 removed the so-called parking lot tax that had been adopted in 2017. The new action repeals the former provision and charitable organizations are invited to seek refunds or credits for UBTI taxes previously paid under the old provision.
 
The IRS has also announced a new mailing address for exempt organization submissions which should be sent to:
 
Internal Revenue Service
P.O. Box 12192
TE/GE Stop 31A Team 105
Covington, KY  41012-0192
 
For additional details on IRS issues affecting the charitable sector, talk to your tax preparer or visit www.irs.gov.