IRS Annual Returns
The Taxpayer First Act, enacted July 1, 2019, requires tax-exempt organizations to electronically file information returns and related forms with the Internal Revenue Service. The new law affects tax-exempt organizations in tax years beginning on or after July 1, 2019.
Several tax forms are included in the mandate, including:
- Form 990, Return of Organization Exempt from Income Tax.
- Form 990-PF, Return of Private Foundation.
- Form 8872, Political Organization Report of Contributions and Expenditures.
- Form 1065, U.S. Return of Partnership Income (if filed by a Section 501(d) apostolic organization).
Organizations that file Form 990-EZ (annual gross receipts less than $200,000 and total assets less than $500,000) have “transitional relief” from the mandate. These organizations are required to file electronically starting in tax years ending August 31, 2020. Of course, organizations with gross receipts under $50,000 already file electronically by using the Form 990-N postcard. Although Forms 990-T and 4720 will come under the e-filing requirement in 2020, the IRS will continue to accept these forms on paper pending conversion to electronic format.
IRS Initial Application for Exemption
As of January 31, 2020, the IRS requires that Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, be completed and submitted electronically through Pay.gov. There is a 90-day grace period during which the IRS will continue to accept paper versions of Form 1023.
CA Attorney General
Effective February 1, 2020, California Attorney General’s Registry of Charitable Trusts requires charities and professional fundraisers to use new and amended forms.
Significant changes include:
New Form CT-TR-1 – The annual RRF-1 filing includes a requirement that an organization include a copy of the Form 990. Charities with revenue under $50,000 file the 990-N postcard, so they don’t have a requirement to send the 990 to the Attorney General. Because the AG wants additional information on an organization’s revenue and expenses, this new form was created and implemented.
Revised Form RRF-1 – This annual RRF-1 form has been revised to include a required report of noncash donations.
Revised Form CT-1 – The initial registration form now requires a lot of additional information about a newly-registering organization. New information requested includes DBAs used by the organization, a list of other states in which the organization solicits charitable donations, whether the organization in under common control with any other nonprofit or for-profit organization, whether the organization has ever been suspended or revoked by the FTB or SOS, whether any officers, directors, trustees, or employees of the organization are related by blood or marriage, and whether any of the organization’s officers, directors, or trustees have been convicted of any crime involving the misuse or misappropriation of funds or any crime involving deception in the operation of a charity.
One thing to keep in mind is that all of these documents are publicly posted on the AG’s Registry website.
If you have questions regarding which forms to file for your charitable organization, and how to file the forms with the IRS, FTB, or California Attorney General, please contact us.