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IRS Clarifies 990-T Extensions

December 16, 2003

The Internal Revenue Service changed the rules on requests for extensions for filing the Form 990 series information returns by exempt organizations last June, but the instructions for the form used to request an extension have not been updated, causing confusion.

Previously, Form 990 filers generally were eligible for a three-month automatic extension of the filing deadline, but organizations filing Form 990-T, “Exempt Organization Business Income Tax Return,” were eligible for an automatic six-month extension of the due date. Exempt organizations needed to file Form 8868, Application for Extension of Time To File an Exempt Organization Return, by the due date of the 990 along with payment of any estimated taxes due.

Under the new temporary rules issued on June 11, 2003, filers of all 990s, including the 990-T, have the same options for extensions. A three-month automatic extension is available by filing Form 8868 without a signature or explanation necessary. An additional three-month extension is possible but requires submission of another Form 8868 that includes a detailed explanation as to why more time is needed and a signature. The IRS must approve the second extension.

Because Form 8868 still refers to an automatic six-month extension for 990-T,interim guidance on the IRS Web site clarifies how it will treat applications for extension of time to file that form. If the applicant files the 8868 in accordance with its instructions, including full remittance of estimated taxes due and a signature, the IRS will treat it as a request for a six-month extension. If Form 8868 is unsigned, it will be treated as a request for an automatic three-month extension and a second form will have to be filed to request a second three-month extension if needed.