by Tony Pandiscia
In guidance released in January, 2017, the Internal Revenue Service [“IRS”] announced a new extension procedure for organizations required to file Form 990, “Return of Organization Exempt from Income Tax”. Tax Exempt Organizations seeking an extension will now file a “single” Form 8868 to request an automatic 6 month maximum extension of time to file the annual tax return. Previously Tax Exempt Organizations intending to avail themselves of the full statutory extension period would be required to file 2 consecutive 3 month extensions, provide a valid reason for the extension request and sign the extension “under penalty of perjury”. The new Form 8868 filing procedure will also apply to filers of other annual returns such as Form 990EZ [“Short Form Return of Organization Exempt from Income Tax”], Form 990PF [“Return of Private Foundation”], and Form 5227 [“Split Interest Trust Information Return” used by Charitable Trusts]. Note that Form 990-T [“Exempt Organization Business Income Tax Return”] that is required for Tax Exempt Organizations who generate Unrelated Business Income Tax [“UBIT”] has always been subject to a 6 month extension and will continue to do so under the new Form 8868 process.
The new extension form will apply commencing with the filing of “2016 tax returns” during calendar year 2017 [i.e. fiscal years with a “beginning date” in 2016] and must be filed prior to the due date for filing of the respective tax return. As a reminder, a Form 990 is initially due 4 ½ months following the organization’s fiscal year end. For “control or affiliate groups,” a separate extension form must be filed for each respective organization or affiliate that has an annual filing requirement. Payments required (i.e. such as for “UBIT”) should accompany the extension form. The Form 8868 may at the discretion of the filer be submitted via regular mail to the Ogden, UT IRS Service Center or electronically filed using any approved “EFILE” processing system. Finally, note that this revised extension procedure applies to annual Federal Form 990 (and similar) filings for a Tax Exempt Organization and does not directly affect any State-mandated annual filing requirements.
We will be discussing with our respective clients the new extension procedures during the next few months, however anyone may contact Langdon & Company LLP should you have any questions.
Tony ([email protected]) is the Tax Partner with Langdon & Company LLP. He is a CPA and also an attorney, advocating for clients on many levels-including with the State and the IRS.