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Consistent with changes made in the Taxpayer First Act (TFA), the Department of the Treasury and IRS have released a notice of proposed rulemaking (NPRM) focused on expanded electronic filing. 

The TFA, enacted in 2019, was aimed at reducing the amount of paper returns filed and manually processed by the IRS. Under the law, tax-exempt organizations, including colleges and universities, are required to electronically file information returns and related forms for tax years beginning after July 1, 2019.  This includes an institution’s withholding tax returns (Form W-2), tax deposits (Form 941), unrelated business income (Form 990-T), and information returns such as the Form 1098-T, among others.     

The proposed rules impose new e-filing requirement for certain forms, including

  • Excise tax returns (Form 4720)
  • Bond tax credit (Form 1097)
  • Return of excise taxes related to employee benefit plans (Form 5330)
  • Report of cash payments over $10,000 (Form 8300)
  • Withholding tax returns of U.S. source income of foreign persons (Form 1042).

The proposed rules are set to become effective following adoption and publication of final regulations in the Federal Register.

A Note About Form 990-T

The IRS stated on March 15 that it would accept the 2019 tax-year versions of Form 990-T on paper, and it will continue to do so. The 2020 Form 990-T and its instructions have been updated for e-filing of returns with due dates on or after April 15, 2021. Any 2020 Form 990-T with a due date on or after April 15, 2021, must be filed electronically. A narrow exception applies for 2020 Form 990-T returns submitted on paper that bear a postmark date on or before March 15, 2021.

Additional e-filing resources and information are available here.

Contact

Mary Bachinger

Director, Tax Policy

202.861.2581


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